author: Emery, Y. C.

text:
    The New York Life Insurance Company v. Patrick H. Gilhooly.
    [Filed November 19th, 1900.]
    1. A purchaser in resisting a claim for specific performance of a contract for the purchase of land, is entitled to show by parol evidence or otherwise, circumstances making it unconscionable or unjust to grant this relief which is purely equitable and which entitles him to insist that the vendor must be left to his remedy at law 6n the contract.
    2. Where no title whatever can be given, a court of equity does not consider itself obliged to give to a vendor the equitable relief of specific performance, merely because of the express stipulation of the purchaser that there would be no objection to the title. The control of the court over one of its own special and peculiar remedies upon a contract cannot be thus restricted by a mere agreement of parties.
    Heard on bill, answer, replication and proofs taken orally.

      Mr. John J. Subbell, for the complainant.

      Mr. Frank Bergen, for the defendant.
   Emery, Y. C.

This is a bill filed by the vendor for specific performance of a written agreement for the purchase of lands. The lands are situate in the city of Elizabeth, and the agreement originally embraced three lots, two of which have been conveyed to the defendant and paid for, and the present controversy arises in reference to the third lot. This lot is described in the agreement as fronting sixty-five feet eight inches on Westfield avenue, and about one hundred and ninety-five feet in depth, and as running toward the east to a lane which constitutes the easterly boundary.

Westfield avenue is a public highway, laid out about 1869. Defendant sets up in his answer, and the proofs in the case sufficiently show, that the complainant has not a good title to the front portion of this lot for a distance of about twenty feet south from the southerly line of Westfield avenue, and that the title to this front is in other persons. This front portion of the lot was sold on August 4th, 1883, to one Jonathan EL Crane, by the sheriff of Union county, under an execution in foreclosure proceedings, in which the complainant and others were defendants, and the deed made upon this sale under execution and decree, in a cause to which complainant was a party, and the recitals therein that all of the complainant’s interest in the tract was sold, is sufficient prima facie evidence under the statute {Gen. Stat. p. 2982 § 14), that the complainant has no valid title to the front of the lot.

Its interest in this portion, if it has any, is by a possession which has not yet ripened into a title. The want of title to the front of the lot was not denied at the argument, nor a further inquiry as to the title applied for, neither is it contended that the defect in title is so immaterial that specific performance could be granted, if the defendant was, under the provisions of the agreement, entitled to require a good title to this part of the lot. The position of the complainant is that under the agreement, notwithstanding this defect in title to the front of the lot, it is entitled to specific performance by reason of the express provisions in the agreement as to its title to this portion. The agreement dated March 5th, 1897 (set out in full in the bill), for the sum of $4,500,, agrees to convey the three lots, particularly describing them as

“beginning at a'point in the southerly line of Westfield avenue three hundred and thirty-five feet six inches easterly from the easterly line of Cherry street, thence along the said line of Westfield avenue sixty-five feet eight inches to a lane,”

and thence along the westerly side of the lane, by two courses, together about two hundred feet, the rear of the lot being one hundred feet in width.

At the end of the description occurs the clause

“Excepting and reserving from the last-mentioned piece all that portion of the said lot which has been or is to be appropriated in the changes made in the widening or otherwise changing the lines of Golden Lane or street. It being particularly stipulated and agreed by and between the parties hereto, that this contract is entered into with the perfect knowledge of the party of the second part affecting the interests of the party of the first part, of, in and to the gore, piece or plot now constituting the front of the said lot, and as to that the said -party of the first part contracts merely for the conveyance of all its right, title and interest.”

By the further provisions of the agreement, however, the deed was to be a proper deed with the covenants only against the grantor’s acts for conveying the fee-simple of the premises, free from all encumbrances except taxes, &c., and the following important provision occurs subsequently and at the end of the agreement:

“In case any valid defect to the title is found and the same is rejected therefor by the purchaser, then this contract shall become void and the said sum of $100 (the deposit paid) shall be returned with interest.”

This subsequent provision of the agreement was not called to my attention at the hearing or by the briefs, but I think it has a decisive importance in the case.

At the time of the execution of the agreement it was known .to the complainant and to the purchaser (a Mr. Isham, who was using defendant’s name in the transaction by his consent), that there was a discrepancy of about seven or eight feet between the frontage on Westfield avenue, as described in the deed (sixty-five feet eight inches), and the actual frontage as shown on the ground, which was about fifty-eight feet. G-olden street or Mill Lane, as it was called, at this point extended at Westfield avenue apparently seven or eight feet over the easterly line of the lot as described. This lane at this point (as appears by the evidence) had been used as a highway, from the time of the laying out of Westfield avenue (before 1810) and a gore of the lot in question fronting seven or eight feet on the avenue and running back about ninety feet and marked on its westerly side by an old fence or the remains thereof, had thus been apparently thrown into or taken for a public street. Mr. Isham, in negotiating for the lot, knew of this gore or discrepancy in the frontage and made his oiler to purchase, as he says, on this basis. The dealings were carried on by a Mr. Noyes, a real estate agent who had received from the complainant a list of its property in Elizabeth, for sale with prices, for the purpose of submitting offers to the complainant. Noyes also says in the dealings that he knew of no other defect than this discrepancy 'in the frontage. Noyes went to New York with the $100 deposit which he received from Isham, and there signed the agreement, in defendant’s name, without having previously submitted it to him or Isham, and Noyes says that he was not informed by the complainant of any other defect and knew of none. When the agreement thus signed by Noyes, without previous submission, was presented to Isham, he inquired of Noyes as to the meaning of the clause relating to the third lot, and was told by Noyes that it was added to show that there was'a discrepancy in the frontage.

Both Isham and Noyes swear positively that they knew nothing about any other defect or trouble in the title, and their evidence is confirmed by Noyes’ letter to the complainant, dated March 4th, 1897, in which he offers $4,500 for the properties and adds “and I take this with the knowledge of a discrepancy existing in the Westfield avenue property.” Upon the whole evidence I am satisfied that the purchaser, at the time of executing this agreement, or to speak more accurately, at the time of adopting its execution by Noyes as his agent, did not in fact know of the defedt in title to the entire frontage and did not contract with this in view. If, therefore, the present controversy is to be decided upon the status of the parties based merely on the rights resulting from the execution of the original agreement, the vendor would not, I think, be entitled to a specific performance. The failure of title to the front of the lot would render the specific performance of the contract inequitable. A purchaser in resisting a claim for specific performance of the contract is entitled to show, by parol evidence or otherwise, circumstances making it unconscionable or unjust to grant this relief, which is purely equitable, and which entitle Mm to insist that the vendor must be left to his remedy at law on the contract. The question in the case as to the complainant’s right to specific performance arises, however, from the subsequent dealings between the purchaser and complainant after the purchaser had ascertained the defect in title to the frontage.

On April 5th, 1897, the day appointed for the execution of the contract, Mr. Isham requested a postponement until April 12th, 1897, for the purpose of completing his searches, and the execution was thus postponed at his request, and on his paying $1,000. Mr. Isham signed this extension in defendant’s name and as his attorney. By April 12th Isham had been informed of the defective title to the whole frontage and then called the-attention of complainant’s officers to it, and also informed them that a Mr. Potter had secured from the owner of the frontage-an option to purchase it, running for six months. Isham at that time offered to carry out the purchase of the other two lots at the sum of $2,000, which was the amount both parties seem to have fixed for these two lots in the negotiations preceding the-written contract. On April 15th Mr. Isham and complainant’s officer, Mr. Randall, did agree upon a delivery of the deed for these two properties for $2,000, and Mr. Randall then presented to Mr. Isham for signature an agreement as to the purchase of the third lot. This agreement contained the same terms as the original agreement in reference to the reservations and title and expressly superseded the original agreement. Mr. Isham declined to sign this draft, but offered to sign an extension of the original agreement, and this was finally signed by him in the-following terms, endorsed on the agreement:

“At my request, and in consideration of the sum of $100, by me paid' to the New York Life Insurance Company, they have consented to an adjournment of the closing of the title to premises situate in the southerly line of Westfield avenue three hundred and thirty-five feet six inches east of Cherry street, described in a contract for sale of the said premises, with other property, bearing date the fifth day of March, 1897, made by the New York Life Insurance Company to Charles W. Noyes, of Elizabeth, New Jersey, agent of Patrick H. Gilhooly, to Tuesday, October 12th, 1897, at the same time and place; all stipulations and agreements-in the said contract contained to remain in full force and effect; and I-hereby signify my consent thereto. Dated New York, April 12th, 1897.
“PATRICK H. GILHOOLY,
“By lí. H. Isham, Atty.”

Mr. Isham says that at this interview he declined to take the third lot unless the company would secure the title to the front of the lot, and that the extension of six months was made in order that they might obtain the title, it being supposed or suggested that Potter would not exercise his option. In reference to executing an extension of the old contract as to the third lot rather than executing a new contract, Mr. Isham says, that looking at the new contract and seeing that it contained the same clause in regard to the front, as shown on the old contract, he refused to execute it, saying,

“I would not execute any new contract. The old contract might be extended upon the same terms and conditions and with the same understanding that I had in regard to the frontage when I agreed to buy it.”

Again he says, when asked what took place at this request to sign another contract,

“I simply declined to do it. I said that I would continue the original contract with the understanding I had at the time I accepted it, and no other, and that was settled before I took the deed as to the first two pieces.”

This conversation was with Mr. Randall and Mr McCall, t neither of whom were examined in reference to the conversation as given by Mr. Isham. The entire evidence as to the situation of the parties to the agreement at the time of the execution of the extension which is the agreemnt now sought to be enforced, shows the situation to be this: The purchaser, at the time of signing the extension, had knowledge of the defect of title to the frontage but supposed that by signing an extension of the original contract, he still had the benefit of any objection to carrying out the contract that he would have had originally, and that this extension, after knowledge of defects, did not deprive him of this right under the contract which was adopted without this knowledge.

This view of his rights, under the extension as signed, so far at least as those rights depend upon the construction of the extension as signed, was not, in my judgment, a correct one. The extension, as signed on April 12th, should, I think, be construed as adopting the stipulations on that date, as if they were then inserted, and as the purchaser then did in fact know of the defect in title and then made the extension in view of this knowledge, his equitable situation, in this respect, would be essentially changed from that occupied at the signing of the first agreement. If this construction is correct, defendant has then lost the right to resist specific performance, so far as it is based on ignorance of defective title. But the decision of the ease will not be rested upon this point, as there are in the case other features which I think clearly lead to a denial of the right to specific performance. The -first is that the contract itself does not clearly deprive the defendant of the right to refuse to take conveyance, if the title is defective. On the contrary, the last clause of the agreement expressly provides that in case any valid defect to the title is found, and the same is rejected therefor by the purchaser, then this contract shall become void, &c. The exercise of this right is not qualified of restricted in any manner or to any portion of the third lot, and inasmuch as the clause at the end of the description does not in terms declare that the company has no title to the front, it cannot of itself, and as a mere matter of the construction of a written document, have the effect of limiting the operation of the third clause to the front of the lot. In equity at least, and so far as relates to the equitable relief of specific performance, the two provisions admit of a construction together which is not repugnant. The reservation clause would prevent the purchaser, if he asked specific performance, from requiring a conveyance in fee of the reserved portion or a conveyance of any more than the company’s interest therein, or from asking compensation from the agreed price, because of defective title to the frontage. This, as it seems to me, is the full extent and effect of the words which have been used on this reservation, and inasmuch as this clause does not clearly override the absolute right of rejection subsequently given in the agreement, I conclude that the agreement to accept an invalid title is not so clearly apparent from the agreement that a court of equity can say it should be enforced. The general rule is that such stipulations' excluding the vendee from his right to have a good title must do so by clear and explicit words. In re Banister, 12 Ch. Div. 131 (Court of Appeals, 1879), Fry, J. (at p. 136). That has not been done in my judgment by the written agreement in this case, and if resort can be had to the parol evidence as to what took place at the execution of the extension, the evidence of the purchaser, which is uncontradicted, shows that the company consented to the extension in order that they might perfect the title.

This parol evidence, so far as it goes or is competent on this hearing, confirms the view of the construction of the instrument, which I draw from the paper itself.

The second reason for denying relief is that I am satisfied upon the entire evidence, that on the part of the purchaser, at least, the agreement to pay $2,500 for the third lot was based on his expectation of getting a title to the portion of the third lot which fronted on the street, and that the failure of title to the front renders the specific performance of the contract inequitable, and complainant must be left to its remedy at law.

Where no title whatever can be given, a court of equity does not consider itself obliged to give to a vendor the equitable relief of specific performance, merely because of the express stipulation of the purchaser that there should be no objection to the title.

The control of the court over one of its own special and peculiar remedies upon a contract cannot be thus restricted or hampered by a mere agreement of parties. In a late leading case in the court of appeal, In re Scott and Alvarez Contracts, 2 Ch. 603 (1895), the purchaser bought under a strict condition of sale that he should not make any objection to a certain part of the title. A vital defect was afterwards discovered in this part of the title, against which the purchaser, if he took possession, would have no defence. The court of appeal held that the contract was effective at law and prevented the recovery of the deposit money, biit that the court of equity would not force on a purchaser a title so defective that he could not hold possession, even though he had stipulated not to object to the title, and would in. such inequitable conditions leave the vendor to his remedy at law on the contract. The defective title in the present case does not, it is true, extend to the whole lot, but without the frontage on the street, the value of the entire lot is so seriously affected that, in my judgment, the contract should not be enforced and the complainant must be left to its remedy at law.

A decree dismissing the bill will be advised.


source: Caselaw Access Project

author: Emery, V. C.

license: Public Domain

text:
    Adolph Wimpfheimer et al. v. John J. Perrine et al.
    [Filed December 10th, 1900.]
    1. Right to set aside mortgages as void under the Ohattel Mortgage act (Gen. Stat. p. 2113 § 1¡. et seq.) for failure to record immediately, does not pass to the mortgagor’s assignee for the benefit of creditors to the exclusion of subsequent execution creditors.
    2. The right of a creditor, under Gen. Stat. p. 2113 ¶ 52, to avoid an unrecorded chattel mortgage of his debtor, passes to his assigns on the assignment of the debt.
    3. The rights obtained by a judgment creditor on the issuance and delivery of an execution pass on an assignment of the judgment thereafter, and may bo enforced by the assignee for the purpose of avoiding unrecorded chattel mortgages of the judgment debtor.
    Heard on bill, supplemental bill, answers, replication and proofs.

      Mr. James E. Iiowell, for the complainants.

      Mr. Edward M. Colie and Mr. William Bead Howe, for the defendants Lindslay.

      Mr. Thomas A. Davis, for the defendant assignee of Perrine.
   Emery, V. C.

Complainants are judgment and execution creditors of the defendant Perrine, and file their bill and supplemental bill to establish, as creditors, under four executions, a lien upon personal property in the possession of the defendant Stagg, as assignee of Perrine, under the Assignment act for the benefit of creditors. The assignment was made previous to the issuing of execution on any of complainants’ judgments, and previous to the recovery of all of the four judgments, except one for $167, which was recovered on the same day the assignment was made. Previous to the execution of the assignment, defendant Perrine had executed and delivered to the defendants Lindslay three chattel mortgages on the tangible personal property assigned, the dates and amounts of the mortgages being respectively October 17th, 1896, for $3,000; February 10th, 1898, for $1,200, and February 14th, 1898, for $8,500. Neither of these mortgages was recorded until March 25th, 1898, the day of the execution of the assignment.

Subsequent to the filing of the bill the mortgaged property was sold by consent of the parties, the liens being transferred to the proceeds, and the assignee defendant now holds the pro-needs of sale, about $4,700 (being less than the amount due on the mortgages to the defendants Lindslay), subject to ihe order •of the court.

All the debts upon which complainants’ judgments were recovered were incurred by the debtor previous to the recording ■of the mortgages, some of the claims, however, being debts due to others than the complainants, to whom they were assigned before recovery of judgment thereon, and one of the four judgments was assigned to the complainants after recovery. Some of the claims proved under the assignment are upon debts incurred by the insolvent debtor before the recording of the mortgage.

It is not disputed that, but for the assignment and its effect ■on their rights, the complainants (at least as to all of their judgments based on their own claims against the mortgagors) would be entitled to have the mortgages declared void under the Chattel Mortgage act (Gen. Stat. p. 2118 § U et seq.) because of the failure to record immediately. Roe v. Meding, 8 Dick. Ch. Rep. 350 (Errors and Appeals, 1895).

The first question is whether, in view of the assignment, the complainants have the right to set aside the mortgages, or whether this right passed to the assignee, under this assignment, to the exclusion of subsequent execution creditors. Complainants claim that the right does not pass to the assignee, relying on the decision in Shaw v. Glen, 10 Stew. Eq. 32 (Chancellor Bunyon, 1888). It was held in this ease that such assignee could not attack a chattel mortgage for failure to record it as required. In the previous decision, in Pillsbury v. Kingon, 6 Stew. Eq. 287 (Errors and Appeals, 1880), it was held that an assignee could attack a conveyance by the assignee if fraudulent against creditors, but Chancellor Eunyon, in Shaw v. Glen, held that the principle settled in Pillsbury v. Kingon,did not apply to conveyances unaffected by fraud, and that in such cases the assignee was bound by the equities to which the property assigned was liable when it came to his hands from the assignor. In the subsequent case in chancery (Graham Button Co. v. Spielmann, 5 Dick. Ch. Rep. 120 (1892) Vice-Chancellor Van Eleet held that a receiver of an insolvent corporation, as representing creditors, could set aside a chattel mortgage, void for failure to comply with the registry laws. He considered (see pp. 127, 128) that the principle applied (in Pillsbury v. Kingon) was the rule that a deed void as against creditors is void also against those who represent creditors, and that the assignee, by the statute, becomes the representative of the creditors of the assignor and stands invested with their rights, and may avoid any instrument which creditors might avoid. Upon this view of Pillsbury v. Kingon the vice-chancellor declared his opinion to be that the rule therein declared against fraudulent conveyances was also to be applied to conveyances declared void by statute against creditors for failure to record, and he also stated that the rule applied in Shaw v. Glen could not be reconciled with this view of the effect of decision in Pillsbury v. Kingon. This decision in Graham Button Co. v. Spielman was affirmed on appeal, for the reasons given by the vice-chancellor. 5 Dick. Ch. Rep. 796 (1898). In a later case, in the supreme court (Knowles Loom Works v. Vacher, 28 Vr. 490 (1895), a question arose on the statute which avoided unrecorded conditional sales of personal property “as against subsequent purchasers and mortgagees in good faith,” and the question was whether a subsequent mortgagee, to secure a pre-existing debt, was a mortgagee in good faith under the statute. It was held that he was such mortgagee in good faith.

Mr. Justice Van Syckel, who delivered the opinion of the court, considered the question of the right of an assignee to attack an unrecorded mortgage as having a bearing on The question in hand, and in the course of his decision (see pp. 498, 499) treated the decision in Shaw v. Glen as not overruled by either Pillsbury v. Kingon or Graham Button Co. v. Spielmann, notwithstanding the opinion of Vice-Chancellor Van Fleet, and he approved the principle declared in Shaw v. Glenn, distinguishing between the effect of involuntary and voluntary assignments in cases where there was no fraud. The court of errors and appeals affirmed the judgment in Knowles Loom Works Case, on writ of error, for the reasons given by the supreme court. 30 Vr. 586 (1896).

The question which I have now to decide is: What is the status and binding force of the decision in Shaw v. Glen, made expressly upon the point now involved, in view of the subsequent comments on that decision?

In reaching a conclusion on this point it must be observed that in neither of the subsequent cases was the question directly involved of the right of an assignee, as representing creditors, to attack -a mortgage void against creditors under the registry laws.

The subsequent expressions of disapproval of the decision in Shaiv v. Glen made by the judges of lower or co-ordinate tribunals, in cases which did not expressly require a ruling upon it, cannot therefore be taken as affecting its binding authority. Eor did the affirmance by the appellate court of the judgment and decree of the lower tribunals in the subsequent cases have the effect of extending the binding authority of the opinions in the lower tribunals to the points which were not directly involved in the decision of the case either below or on appeal. As to these points not involved, the final appellate court must, notwithstanding the general affirmance of a judgment or decree, for the reasons given in the court below, necessarily retain the power to decide such new points when they come up directly for decision and review.

- I think, further, that by the comments of Mr. Justice Van Syckel, in the latter case, upon Shaw v. Glen, and by the adoption of his opinion as the reason for afSrming the judgment, the court of errors and appeals has indicated that it took this view of the effect of the Button Company v. Spielman Case upon Shaw v. Glen, and considers the question of the correctness of the latter decision as open for review when directly involved on appeal. If this view as to the effect of the later cases is correct, then Shaw v. Glen, until overruled when directly called in question, still stands as a decision of this court made expressly upon the point, and therefore binding on me. I shall so treat it for the purpose of this decision, and hold that the right to attack the mortgages did not pass to the assignee,- and in his hands the property remains subject to the mortgages in question, which were given to secure honest debts or liabilities. But inasmuch as the assignee holds subject to the unrecorded mortgages, the creditors as against whom these mortgages are void must, necessarily, be entitled to enforce their liens on the property thus held by the assignee. Otherwise the provision of the statute declaring the mortgages void, as against them, is rendered entirely ineffective, and by the method of a voluntary assignment these provisions of the registry law can be nullified as to creditors. The assignee is not a purchaser for value, and as to so much of the property in his hands as is represented by a mortgage invalid as to a creditor, such creditor is entitled to enforce his lien in preference to the mortgagee. Complainants, therefore, are entitled to so much of the fund represented by the mortgaged property as is sufficient to satisfy those claims held by them, as to which the mortgages are void under the statute.

The second question is: Does the protection of the statute extend to all of the complainants'’ claims? Complainants hold four judgments—the first, recovered on March 25th, 1898, for '$167 and costs, upon a promissory note given by Perrine, the debtor, to them on June 3d, 1897, for money loaned; the second, recovered April 16th, 1898, by Albert Courier, for $165.76, upon a debt due to Courter. before the recording of the- chattel mortgage, which judgment was assigned to complainants on April 26th, 1898, and after the assignment; the third, recovered April 19th, 1898, for $5,277.21, upon a debt due from the debtor to the complainants, for $1,259.35, with interest, and the balance being upon notes originally given by the. debtor to Martin Bates & Company, before the recording, and by them assigned to the complainants after they were due and after the assignment; the fourth judgment was obtained May 3d, 1898, for $318.79 and costs, upon an obligation incurred by the debtor to the complainants before the recording. The question is whether, as to so much of the complainants’ claims as is based on the debts assigned, and not on debts originally due to them personally, as creditors of Perrine, before the recording of the mortgage, the chattel mortgage is void under the statute.

The Chattel Mortgage act (Crew. Stat. p. 2113 52) makes an unrecorded mortgage “absolutely void as against the creditors of the mortgagor, and as against the subsequent purchasers and mortgagees in good faith.” It is contended that the effect of this provision is to confer a personal statutory privilege or lien upon the creditors, as to whom the mortgages are void, and that this privilege or lien is not assignable and does not follow an assignment or transfer of the debt. It is further contended that it has been settled by the decision in Roe v. Meding, supra, that under the statute, chattel mortgages which are void-as to creditors who became such before the mortgages are recorded, are valid as to the creditors who become such after the recording, and that as to the assigned claims, the complainants are such subsequent creditors.

No decisions upon the precise point have been referred to, but several decisions relating to the enforcement by an assignee of statutory liens, such as mechanics’ liens, are relied on, as are also decisions adverse to the enforcement of special equitable liens, such as vendors’ liens, by an assignee of the debt. These decisions do not seem to me to be applicable. The Chattel Mortgage act was not intended, and does not profess, to give creditors of the mortgagor, as such, liens on personal property, or to define who shall be creditors. The creditors’ lien on personal property of his debtor is derived solely from the issuing of an execution upon a judgment and its delivery to the sheriff. Hall v. Nash, 13 Dick. Ch. Rep. 554 (Errors and Appeals, 1899); Gen. Stat. p. 1418 18. And, as is entirely settled, the recovery of such judgment and the issuing of execution entitling the judgment creditor to a lien upon personal property of the debtor is necessary in order to put a creditor in a position to attack the validity of an unrecorded mortgage. This principle was restated in both the Graham Button Co. and Knowles Loom Work Cases. It must follow, therefore, as it seems to me, that for the purpose of determining whether any person has such status as a lien creditor entitled under the chattel mortgage to question the lien created by the mortgage, the judgment must be conclusive that he is such creditor and has such capacity and status. As was said by Mr. Justice Dixon, in Minzesheimer v. Doolittle, 15 Dick. Ch. Rep. 394 (Errors and, Appeals, 1900), a case where complainant’s status as a judgment creditor was involved : “The judgment, of course, fixes against all the world the ■status of the complainant, as a judgment creditor of the defendant.” The status of a judgment creditor having a right to question the mortgage as void against the lien of his execution being thus conclusively fixed by the judgment, the judgment creditor must have, as it seems to me, -the right, under the Chattel Mortgage act, as construed in Roe v. Meding, to avoid the mortgage as to all those claims included in his judgment which were incurred by the debtor before the recording of the mortgage, whether the claims were incurred originally in his own favor, or in favor of others whose rights were legally assigned to him, and upon which assignment he became, under the law, the legal creditor. Receiver v. Spielman and Roe v. Meding both put the right of 'the receiver to challenge the validity of an unrecorded mortgage expressly upon the lien on the insolvent debtor’s property obtained by the appointment. Roe v. Meding further decides that as to the creditors who have proved claims before the receiver, in whose favor he, as representing creditors, may avoid the mortgage, the statute of 1885 makes a distinction between creditors of the mortgagor before the recording of the mortgage and creditors who became such after recording, and avoids the mortgage only so far as may be necessary for the receiver to pay the creditors whose claims arose before the recording. But Roe v. Meding does not touch the question now presented, whether on a claim which was incurred by the mortgagee before the recording and assigned by the creditor after the recording, the assignee is a creditor whose claim was incurred before recording. In my judgment, he must be so considered.

' The general rule undoubtedly is, that on the assignment of a debt, which is assignable at law and is evidenced by a writing which is actually delivered to the assignee, the right to any remedy which the assignor had as a creditor passes to the assignee. To hold that the remedy for the recovery of the debt was impaired merely by the assignment, would necessarily lessen the value of the debt in the creditors’ hands, and it would be so opposed to the general rules and policy applied to the rights of the assignors and assignees of the property that a legislative act claimed to have this effect must disclose such intention clearly. In the present statute there is certainly no express or clear declaration in the statute itself that the remedy or advantage given to the creditor for the recovery of the debt is personal to the creditor, to whom the debt was incurred, and the contention that the additional remedy for recovery of the debt given by the statute is personal and does not follow as a right belonging to the owner of the debt is rested upon expressions in the opinion in Roe v. Meding, which are claimed to indicate that the protection of the statute was personal to the creditor to* whom the debt was incurred, and did not follow the assignment of his debt. This question was neither involved nor touched on in the case, nor do I think the expressions relied on warrant this inference as to the construction of the statute.

That the assignees or representatives of the creditors, who are such by operation of law (e. g., receivers of insolvent corporations or legal representatives) can pursue the remedy is entirely settled, and so far as relates to the effect of the Chattel Mortgage act on an assignment of the debt, it is, in my judgment, impossible, on principle, to distinguish between a voluntary assignment of the debt and an assignment by operation of law. It is further insisted that the assignability of the right to declare the mortgages void comes within the scope of the rule based on public policy, forbidding the assignments of rights to-avoid deeds for fraud and like eases. As to this argument, it is sufficient to observe that the protection of this rule is properly invoked in cases where this right of action to set aside for fraud is itself the right attempted to be assigned, and the sole basis of the action. The cases referred to will, on examination, be found do be cases of this character. But the rule does not apply where property or an interest therein is legally assignable and is actually assigned, and the assignment is effective independent of the right of action for fraud. In such cases the right to avoid previous deeds for fraud, &c., is based on the ownership of the property assigned, and is claimed as a remedy for the recovery of the debt or property duly assigned. An application of the rule thus invoked to cases of the latter class would stamp the statute of frauds itself, which expressly gives the right to set aside deeds for fraud to creditors or their assigns, as founded in this respect on a violation of public policy, rather than on the recognition of established principles of right and justice.

A reason for the extension of the remedy “to assigns” of creditors by express provision in this statute of frauds may, perhaps, be found in the fact that previous to the statute IS Miz. (the original of our statute of frauds) the title of a fraudulent grantee was good at law and the lands conveyed in fraud could only be reached by the creditor in a court of equity, and the statute was intended, and had the effect, to avoid the fraudulent title at law as well as in equity. Phelps v. Morrison, 10 C. E. Gr. 538 (Errors and Appeals, 1874, Chief-Justice Beasley, at p. 544). In equity, but not at law, debts were assignable at the time of this statute, and the express provision extending the remedy to assigns may have.been for the purpose of giving assignees of debts the same remedy at law under the statute which they previously had in equity. Since debts have become legally assignable, no such express extension to assigns would seem to be necessary, and the absence thereof would not exclude them.

I hold, therefore, that the remedy for the recovery of his debt which was possessed by any creditor of the mortgagor passes to his assigns upon the assignment of the debt.

This conclusion reaches to all of the judgments of complainants, except the one assigned to them by Courier after' its recovery and after the issuing and delivery of execution thereon to the sheriff. By such delivery Courier obtained a property-right, which was assignable with the judgment, and as such may be enforced by the complainants as assignee. Sweet v. Clay, 49 N. W. Rep. 899 et seq. All of the judgments and executions, therefore, being founded entirely upon claims or debts incurred before the chattel mortgages in question were recorded, the mortgages must be held invalid as to the complainants, and the proceeds of sale must be paid to complainants.


text:
    In the matter of the application of Hannah Barry, guardian of Emma Donlon, an infant.
    [Filed January 11th, 1901.]
    1. The subject of the jurisdiction of chancery and the orphans courts over the estates of infants and the appointment of guardians therefor, and their powers in the premises, reviewed.
    2. The court of chancery will not exercise jurisdiction to direct in advance the expenditure of the principal of the infant’s possible estate for his maintenance, but will leave the question of the necessity of expenditure to the judgment of the guardian, subject to the supervision of the orphans court on the settlement of the accounts.
    On petition.

      Mr. John J. lloppin, for the petitioner.
   Emery, Y. C.

Petitioner is the guardian of the person and estate of Emma Donlon, her daughter by her first husband, an infant now seventeen years of age, appointed by the surrogate of Essex county within a year, and as such guardian has received $1,000, payable to the infant, as a beneficiary designated in a life insurance policy on the life of John Barry, petitioner’s husband and the infant’s stepfather. Neither petitioner nor her daughter have other property and they both work for a living, but the petitioner is now ill, and the daughter delicate, and at present able to earn little or nothing. The income of the fund is not sufficient for the infant’s support and the application is for an order to use part of the principal for that purpose, and an order for an allowance of $20 per month of the principal is asked.

If the court acts on this application, the order which should be made on the petition setting out the above facts should be a reference to inquire into the facts and circumstances of the application, including the mother’s capacity and ability. That the mother, as well as the father, is under obligation to support her infant children to the extent of her ability, was the conclusion reached by Vice-Chancellor Pitney in Alling v. Alling, 7 Dick. Ch. Rep. 92 (1893), after exhaustive examination of the eases, and his decision on this point will be followed as establishing the proper rule. And it may also be said that the application by petition instead of by bill is proper, and that the application is one, which in view of the smallness of the estate and income, may be made without the formality of a bill. In re Bostwick, 4 Johns. Ch. 100, approved on this point in Receiver v. First National Bank, 7 Stew. Eq. 450 (Vice-Chancellor Van Fleet, 1881); 2 Dan. Ch. Pr. (6th ed.) 1357, 1358.

But the important question in this case is the preliminary question as to assuming jurisdiction to fix in advance the allowance for the maintenance of a minor, to be paid by a guardian out of funds of the infant,- held by him under a trust created by statute, and which are not held by the guardian under a trust for the infant, created by a will or other private document. The cases in which the court has hitherto exercised its general equity jurisdiction, as distinguished from its statutory iurisdiction, over the property of infants, seem to have been cases founded on its jurisdiction to direct trustees holding the property of the infant under express trusts, or on its jurisdiction over accounting by guardians or executors, where the circumstances were such as to make the settlement of the question of maintenance and allowance-by an accounting before the orphans court, after the expenditures were made either inapplicable or insufficient. Stephens v. Howard’s Executor, 5 Stew. Eq. 244 (Vice-Chancellor Van Fleet, 1880), is an instance of the former class; and Ailing v. Ailing, 7 Dick. Ch. Rep. 92 (Vice-Chancellor Pitney, 1898), is an instance of the latter class. A statement of the course of the decisions and statutes relating to the jurisdiction over the persons and over the property of infants will, I think, disclose the basis of the exercise of the powers of this court and the principles upon which the question must be settled. The existence of a general .equity jurisdiction over the custody of the persons of infants has been finally settled in' this state by the decision in State (Baird, pros.) v. Torrey, 4 C. E. Gr. 481 (Errors and Appeals, 1868). This jurisdiction is placed by this decision upon the exercise by the chancellor as parens patrias of a portion of the powers which in this capacity originally vested in the chancellor of England, as the representative of the king, to whom, as sovereign, in the character of parens patrias, the duty of protecting infants was attributed. In England, the lord-chancellor (acting as a court of chancery), under this jurisdiction as parens patrias, appointed guardians for infants, and also receivers for the management of their estates, and apparently without reference to the existence of any trust for the infants (1 Spenc. Eq. Jur. 611), but this assumption of jurisdiction to appoint guardians was, in the opinion of Mr. Hargrave, originally an usurpation. 75. and note m; Co. Litt. 88 (b); note 19 (Harg. & But. ed.)

In Hew Jersey, however, such general right to appoint a guardian for the persons and estates of an infant never existed in this court, and up to- the passage of the Orphans Court act of 1784, the ordinary alone assumed and-exercised the jurisdiction of appointing guardians of the persons and estates of orphan infants. Graham v. Houghtalin, 1 Vr. 552, 560 (Errors and Appeals, 1868). The power of the ordinary and orphans court extended originally (and up to 1843) only to orphan infants, and it may be that the court of chancery, in the absence of any other proper authority, might have exercised the power of appointing a guardian for an infant entitled to property while the parents were living, but in Graham v. Houghtalin, supra (at p. 564), it was denied by Mr. Justice Vredenburgh that the lord-chancellor of England had this power. This question, however, does not seem to have arisen, and there can be no doubt that under the-settled judicial administration of this state a general guardian of the person and estate of an infant is to be appointed by the-ordinary or orphans court under the statute and not by the court of chancery in the exercise of any supposed general power. Not only was the power of appointment of guardians over the person and estate of infants exercised by these courts alone, but the ordinary also originally exercised jurisdiction over the settlement of the accounts of guardians for the disposition of the property to which the appointment gave them title for the benefit of the ward. Graham v. Houghtalin, supra (at p. 568). The constitution of 1776 provided that “the governor be ordinary or surrogate-general,” and by the act of 1784, defining the jurisdiction of the ordinary and establishing county orphans courts, the jurisdiction to grant letters of guardianship was confirmed in the ordinary, and the orphans court was also authorized to grant letters of guardianship to orphans under fourteen, the appointment of guardians for orphans over fourteen being by the ordinary. By the act of 1820 (Rev. L. p. 776 § 27), it was provided that the power and duties formerly exercised by the-ordinary relative to the admission of guardians for persons-under twenty-one years of age, should be thereafter exercised by the orphans court of the county in which the minor resided or had real or personal property, subject to an appeal to the-prerogative court, but the right of the ordinary to grant letters-of guardianship was not restrained' “in case a convenience will arise from doing the same.” The orphans court, by the same acts, was given jurisdiction over the allowance of the accounts of guardians. By the act of February 1st, 1799 (Pat. L. p. 3^6), relative to guardians, every testamentary or other guardian was-directed to file an inventory with the clerk of the orphans court within three months after his appointment, and to exhibit annual accounts of the ward’s estate,

“and if the personal estate and rents and profits of the real estate should not be sufficient for the maintenance and education of the ward, the orphans court was authorized, after full investigation, to sell such parts of the ward’s lands as should be adequate for his maintenance or education.”'

The act of Eebraary 22d, 1843, authorized the ordinary or the orphans court of the proper county, to appoint a guardian for a minor entitled to any property in the lifetime of the father, and by the revision of 1846 {Rev. Stat. p. 374 § 6), timber on the ward’s land, as well as the land itself, was authorized to be sold by the guardian, under order of the orphans court, if the personal estate and rents and profits of the real estate were not sufficient for the maintenance and education of the ward. This latter provision is the law still in force. Gen. Stat. p. 1616 8. After the first account, which is to be made at the end of a year, the guardian’s accounts are now to be settled once in three years, and oftener if required (Orph. Cl. Act. Rev. P. L. 1898 p. 757 § 115), and the power of appointing guardians is in certain cases conferred upon the surrogate. Ib. p. 728 § 36 et seep These statutes, taken together, show the development of a complete system of judicial administration with reference to infants and their estates, which conferred upon the orphans court the general power of appointing guardians of infant orphans, and the constant supervision over the guardian’s management of the yard’s estate by the provision for accounting. The provision for sale of the timber or lands of the orphan by direction of the orphans court, in case the personal estate is insufficient for its maintenance or education, implies that the personal estate, principal as well as interest, may be used for that purpose, if necessary, without application to the court, subject of course to its allowance in the settlement of the accounts, at which time the propriety of the expenditure could be questioned by the court or parties interested. And this has been the recognized practice on the settlement of the guardian’s accounts in the orphans court, and the allowance of the expenditure out of principal for support and maintenance of the ward. Pyatt v. Pyatt, 1 Dick. Ch. Rep. 285 (Errors and Appeals, 1889). In view, therefore, of these decisions which establish the right of the guardian to expend the principal of the personal estate, if needed for the ward’s support, and to be allowed such 'expenditures in his final account, and in view of the convenient expeditious and inexpensive method provided by the statutes for bringing the question of the propriety of the expenditure before the orphans court in the frequent settlement of accounts, the jurisdiction of the court of chancery to make an order in advance fixing the expenditure of principal should be guardedly exercised even if it exists in these cases. The intention of the legislature in establishing this summary and convenient method for the settlement of guardians’ accounts, was clearly to avoid the necessity of resorting to the court of chancery for that purpose. And while the jurisdiction over guardians’ accounts, under the general jurisdiction over trustees, undoubtedly still exists in some cases, an exceptional state of facts must be presented to call for its exercise, and the exercise of the jurisdiction must be based on the insufficiency or incompleteness of the orphans court’s-‘jurisdiction (which is only over the guardians’ accounts), by reason of the particular circumstances, as was the case in Alling v. Alling, supra. The jurisdiction over the property of infants in the court of chancery, either to sell,- mortgage or direct in advance its management by a guardian whose control over the property depends wholly on his appointment under the statute, should not be exercised unless it has been expressly conferred by statute, or is based upon the application of the general jurisdiction over trusts, and this jurisdiction over the guardian as a trustee is to be exercised only 'where the statutory provisions for the enforcement by the orphans court of the trust imposed by the statute upon the guardian are, under the special circumstances of the case, ineffective or insufficient for the infant’s protection. This is the rule followed in reference to the exercise of the jurisdiction of the court over the accounts of executors and administrators. Frey v. Demarest, 1 C. E. Gr. 236. The general policy of the statutes and decisions in this state upon the question now presented, has been to leave the question of the necessity of the expenditure of the personal estate, both income and principal, to the judgment of the guardian, in the first instance, subject to affirmance of the orphans court on the settlement of his accounts, and in all ordinary cases this course (which has been followed for over a century) affords protection both to the guardian and the infant. No circumstances appear in the present case sufficient to withdraw the infant’s property from the ordinary course of application and settlement, and the application must therefore be denied.


text:
    Sarah H. De Hanne v. Dorastus L. Bryant.
    [Filed February 4th, 1901.]
    Where defendant asserted title to an easement in a water course across complainant’s premises, and had gone on the premises, without complainant’s consent, to repair the stream every year since 1879, and had destroyed a gate erected by complainant to lessen the flow of the water, equity has no jurisdiction, prior to a settlement of the question of defendant’s rights at law, to quiet title to the easement, under the acts giving jurisdiction in case complainant is in peaceable possession of the property.
    Heard on bill, answer, replication and proofs.

      Mr. Benjamin W. Ellicoii, for the complainant.

      Mr. James H. N eight our, for the defendant.
   Emery, V. C.

Complainant, who is the owner of a farm in Randolph township, Morris county, containing about eight acres, files her bill to quiet title to the lands, against the defendant, who is the owner of a' tract of land adjoining the complainant’s lands. Complainant’s bill contains the allegations necessary to give jurisdiction under the • act to quiet title, viz., that she is in peaceable possession of the premises; that the defendant claims some interest in the lands, and that no suit of action is pending to test the validity of the defendant’s claim. Defendant’s answer admits the complainant’s possession of her lands, except so far as it is encumbered by defendant’s estate, claims title and interest to a part thereof, as subject to an easement of a water course over complainant’s lands, which conveys part of the waters of Cory brook, a natural water course, through complain.ant’s lands, by a ditch constructed thereon, and on to defendant’s adjoining lands. The source of the defendant’s record title is set out, as originating in a writing which is claimed to have the effect of a grant of the easement to defendant’s predecessors in title, in the year 1797, and defendant also claims a prescriptive right to the easement acquired by open, notorious and continuous exercise of the right acquiesced in by the complainant and her predecessors in title for over twenty years. These allegations are substantially and in effect a denial of peaceable possession.

The sole question at issue is the existence of this easement in favor of the defendant over complainant’s lands, and complainant denies the existence of any easement to any extent whatever in defendant’s favor.

■ The case, therefore, is not one where the existence of an easement to some extent is already established at law or admitted by the complainant, and the bill is filed to have the extent of the easement finally declared and settled by a court of equity under its general equitable jurisdiction. It is, on the contrary, a •case where the entire question of the existence of the right to an •easement, which is a purely legal right, is brought for decision in the first instance to a court of equity. The act to quiet title confers upon the court of equity jurisdiction to settle a question ■of legal title, without a previous settlement of the title at law, ’.but only under the exceptional conditions specified in the act, which conditions are fixed for the purpose of requiring, as preliminary to the equitable jurisdiction, the existence of a ■state of facts, under which the question of the legal right claimed by the defendant cannot be brought by the complainant before the legal tribunals. These preliminary conditions are, first, that the complainant’s possession is peaceable, and second, that no action is pending to test the validity of the defendant’s title, and satisfactory proof of such peaceable possession must be made by the complainant before the court of equity can proceed to settle the question of legal title. Sheppard v. Nixon, 16 Stew. Eq. 627 (Errors and Appeals, 1887); Allaire v. Ketcham, 10 Dick. Ch. Rep. 169 (1896), and cases there cited (at p. 901).

By peaceable possession under this act is meant peaceable, as ragainst the defendant, and the test of such peaceable possession is, whether the defendant, setting up a claim of title has interfered with the complainant’s possession of the premises or trespassed thereon, by acts suable at law and of such a character that suit at law by complainant upon them would or might involve the defendant’s title. This is the test applied by me in Allaire v. Ketcham, supra, and by Vice-Chancellor Reed in a later case not reported.

In the present case the proofs show that defendant, or persons acting by his authority, have entered on the complainant’s premises for the purpose of cleaning and repairing the water course, without complainant’s consent and under claim of right, and that the defendant has also, within twenty years, claimed and exercised the right to control, to a certain extent, the flowage •of the water above complainant’s premises from the brook across an intervening owner and on to complainant’s lands. Defendant himself says that he has had men to repair the ditch all through complainant’s property, and that he has had the men. cleaning it out every spring since he moved there (about 1879). Wilson Bell, one of the defendant’s witnesses, swears that he did work all the way along the ditch for defendant for the past twenty-one years. Complainant herself says that she has seen several of the defendant’s people on the property and near her house fixing the ditch, as she supposed, but that it was not by her •consent 'or permission. Her husband, who has had charge of the place for her since her purchase, says also that persons had been on the property during his absence repairing the ditch, but without his consent or permission; that he noticed this a number of times since 1884 and up to the spring of 1900- On one •occasion (1883) he directed two men who were digging in the ■ditch, and whom he presumed were working for Bryant, to .leave his premises. On the 28th of March, 1900, this witness, for the purpose of lessening the flow of the water through the complainant’s property, put a gate or frame into the ditch at the upper end of her property, where the water enters her property and just inside of her fence line. The defendant entered the complainant’s propertj, took out the gate and threw it away, .and in a day or two commenced suit in a justice’s court against the complainant’s husband for obstructing the water course. In this suit the husband, as defendant, pleaded title in complainant and commission of the alleged acts of obstruction under her rightful authority, and having given bond, as provided by the statute, the suit in the justice’s court was superseded. Suit was subsequently commenced in the circuit court, by the present defendant against the husband of the complainant, and is now pending. This suit is now pending for trial at the Morris county circuit court, and complainant’s bill was filed, so far as I can gather from the evidence before me, after the commencement of the suit, but before the plea of title. While the filing of the plea of title and giving the bond has the effect of superseding the jurisdiction of the justice (Justice's Court act § 25 et seq.), yet, until after the expiration of the three months specified in the bond for the commencement of the suit in the higher court to try the title, it is doubtful whether the complainant is in a position to invoke the aid of a court of equity under the act to quiet title, on the ground that no suit is pending to test the validity of the defendant’s claim. But without deciding this point, I conclude upon the whole evidence that entries have been made and acts have been committed upon complainant’s premises by the defendant, or under his authority, under claim of right to the easement set up in his answer to his suit, for which 'the defendant is suable at law, and that these entries and acts have been such that in a suit th&reon the validity of defendant’s claim would be involved, or could be put in issue. Complainant’s possession, therefore, is not a peaceable possession, as against the defendant, and this court has in the present case no jurisdiction to try and determine the legal title to the easement in dispute. I will hear counsel as to whether the bill should be dismissed or the hearing be directed to stand over until after the settlement of the title at law.


author: Reed, V. C.

text:
    Supreme Conclave Improved Order of Heptasophs v. Jennie E. Dailey and Francis B. Minch.
    [Filed October 19th, 1900.]
    1. A certificate, insuring the life of a member of a beneficial society, cannot be assigned by the beneficiary to a creditor of the member insured, even with the concurrence of the member, when such an assignment is forbidden by a by-law of the order.
    2. A bill of interpleader, filed by the society, will not validate the assignment.

      Mr. Walter H. Bacon and Mr. Samuel Lí. Grey, for the defendant Eraneis B. Minch.

      Mr. William A. Logue and Mr. 0. H. Sinñiclcson, for the defendant Jennie E. Dailey.
   Reed, V. C.

On July 3d, 1894, there was issued to J. Erank Dailey, a .member in Eureka Conclave, Ho. 29, of the Improved Order of Heptasophs, located at Bridgeton, Hew Jersey, a benefit certificate for' the sum of $5,000, which certificate was made payable to Jennie E. Dailey, the wife of J. Erank Dailey.

On July 10th, 1894, the said J. Erank Dailey and Jennie E. Dailey assigned all their interest in the said certificate and all moneys to grow due thereon to Eraneis B. Minch, as security to indemnify and save him harmless from any loss or damage against the charge which he or they may sustain in respect to a certain note for $1,250, bearing date July 6th, 1894, given by J. Erank Dailey, payable three months after date at the Bridge-Ton Hational Bank, and endorsed by the said Minch, for the accommodation of the said J. Erank Dailey; and for and in respect of any renewals of the said note, or any part thereof; also as collateral security for the payment of a certain bond executed by the said J. Frank Dailey to the said Francis B. Minch, dated July 10th, 1894, and payable in one year after date in the sum of $600.

J. Frank Dailey died January 16th, 1898; notice was served by Minch, upon the order, of Dailey's assignment to him. The complainant then filed this bill, and the defendant Minch, as assignee, and the widow of Dailey, as beneficiary, have inter-pleaded.

The widow insists that under the scheme of insurance and under the terms of the insurance contract the certificate was not assignable, and therefore the $5,000 belongs to her as the beneficiary named in the instrument.

Mr. Minch, on the other hand, claims that the assignment was valid and that he is entitled to be paid the amount, which it was assigned to secure. These counter contentions present the principal question involved in the litigation.

The insistence on behalf of the beneficiary is based upon the fact, that by the scheme of insurance as evidenced by the constitution and by-laws, the benefit of the insurance is limited to some one of a class, of which this assignee is not one, and that the contract itself forbids an assignment of the certificate or of the moneys to be paid under its provisions.

The Order of Heptasophs is a beneficial order, organized under the laws of Maryland. One of its objects, set out in its constitution, is to create and maintain by stated and fixed contributions, a benefit fund, from which on satisfactory evidence of the death of a member who has complied with all the lawful requirements of the order, a sum not exceeding $5,000 shall be paid to his beneficiary or beneficiaries, as limited and prescribed in the laws of. the order relating to benefit certificates, as he may direct in accordance with the said laws.

By section 350 of the laws of the order, the benefit may be made payable to one or more persons of two classes; the first class includes a list of relatives of the member, and the second class includes any person who is dependent upon a member for maintenance, food, clothing, lodging or education. .

Section 352 of those laws, as they existed in 1894, at the time of this assignment, read thus: “A benefit certificate cannot be made payable to a creditor nor to be held in part, nor assigned to secure or pay any debt which may be owing by a member;” and section 353 read thus: “Any assignment of a benefit certificate by a member or beneficiary shall be void.”

Section 358 provides for the surrender of a benefit certificate at any time by a member, and the issuance of a new certificate to such beneficiary as the member may designate in accordance with the laws of the order.

By section 351, it is provided that no designation is permitted by will, nor shall a will be permitted to control the appointment or distribution of the rights of any person to any benefits payable by the order.

It is entirely settled that the contract entered into 'between the order and Dailey is made up of the certificate itself, the constitution and by-laws of the order. Holland v. Chosen Friends, 25 Vr. 492; Golden Star Fraternity v. Martin, 30 Vr. 214, Supreme Council of Royal Arcanum v. Brashears, 89 Md. 624.

It is entirely settled that the contract entered into by the order was made with J. Erank Dailey, and that the power conferred upon him to change the beneficiaries named in the certificate deprived the beneficiary of any vested right in such certificate, previous to the death of the insured member. His wife had only a contingent interest, of which she might be stripped at any moment before the death of her husband, by his designation of another beneficiary within the permitted class. This contingent interest, however, was, unless forbidden by the terms of the contract, assignable in equity. An assignment of a mere possibility or expectancy, if made for a valuable consideration in equity, is good as an agreement, and takes effect when the possibility ripens into an actuality. 3 Pom. Eq. Jur. § 1281; Bacon v. Bonham, 6 Stew. Eq. 614.

Nor is there in the transaction itself any natural equity in favor of the wife as against the assignee calculated to induce a court to 'favor the former. The insurance was effected for the primary purpose of securing the assignee, not for the purpose of benefiting the wife. She probably joined in the assignment at the request of her husband, without having special knowledge of the nature of the transaction, but it is quite obvious that the policy would not have been written in her favor, if it had not been understood that she would join in its assignment. The question, nevertheless, must be answered, whether the contract itself, which in express terms declares any assignment by the beneficiary void, can be ignored.

It is to be observed that the clause in the contract forbidding the assignment by the beneficiary is one of the most, if not the most, important feature in the scheme of this beneficial order. The purpose of the restriction against assignment is entirely clear. It is designed to provide a fund to be paid to a relative or dependent at the time when death has deprived such beneficiary of the succor and support of the living member. It is of the utmost importance in the accomplishment of this purpose that the beneficiary should be deprived of the power to deal with his expectancy during the life of the member. So the contract put it beyond the power of the beneficiary to defeat this purpose by mortgaging or bargaining away his right to receive the money at the particular time and for the purpose intended. The provision is intended as a guard against the imprudence or improvidence of the beneficiary.

The scheme of which this contract is a part has repeatedly ‘ received the approval of the courts. Even in cases where the contract of insurance contained no clause prohibiting assignments by the beneficiary, courts have gone far to find in the policy of the statutes under which the insuring associations were organized some implied prohibition against the right of the beneficiary to assign.

In Briggs v. Earl, 139 Mass. 473, a husband and a wife-had assigned a certificate in the Northeastern Mutual Aid Society as collateral security for the husband’s debt. A certificate was written for the benefit of the wife. Neither the statute or certificate contained any express provision relative to the power of assignment by the beneficiary, but only provided that the funds should not be liable to attachment. The court held the assignments invalid. It was said that the purpose of the statute was to render assistance to widows and orphans of the deceased members or others dependent upon them—“that is to say, after the support and assistance of the member have been withdrawn by death, the corporation then is to step in and supply his place in a measure. The purpose is not to assist wives and children, but widows and orphans.”

In Caddick v. Highton, 68 L. J. 11 Q. B. (N. S.) 281, it was held that the beneficiary under a certificate in the Liverpool Victoria Legal Friendly Society could not, under the, legislation appertaining to such societies, assign his interest. In these instances there was no express legislative prohibition against assignment.

So in respect to all insurance effected under the New York State act, concerning the insurance of lives for the benefit of married women. The court of appeals in Eadie v. Slimmon, 26 N. Y. 9, said the act looked to a provision for the state of widowhood and for children, and it would be a violation of the spirit •of the provision to hold that the wife could sell or traffic with her policy as though it were realized personal property or an ■ordinary security for money. This case was followed in Barry v. Equitable Life Assurance Society, 69 N. Y. 587; Barry v. Brune, 71 N. Y. 262; Wilson v. Lawrence, 76 N. Y. 585; Brummer v. Cohn, 86 N. Y. 11.

In Frank v. Mutual Life Insurance Co., 102 N. Y. 266, it was held that such an assignment by the wife was voidable at her option; and in Brick v. Campbell, 122 N. 7. 887, it was held that a subsequent removal of the disability to assign would not validate the prior assignment.

The ground taken in these cases seems to have been that to permit such assignment would be to defeat the purpose of the insurance as manifested by the legislation under which the schemes of insurance were organized.

As expressed by Mr. Justice Barrett in McCord v. McCord, 10 App. Div. 275, “it would not only be against public policy, but it would be subversive of the whole plan of benevolence as embodied in the constitution and by-laws.”

It is true that in the present case the prohibition is not to be found in legislation, but in the contract itself; but I do not perceive that it is on that account the less effective.

' Mr. Justice Brewer, speaking for the federal supreme court in Burck v. Taylor, 152 U. S. 634, respecting an assignment of an interest under a contract to build a capitol for Texas, in which contract it was agreed that it should not be assigned without the consent of the state, said: “It is true that we have no construction of a statute, but only-the terms of a contract; that contract was as binding on the one party as upon the other. * * * It was a promise which entered into and became one of the terms of the contract;' one which was binding not only upon the party, but upon all others who sought to acquire rights under it.”

• Judge Allen remarked in Devlin v. Mayor et al., 63 N. Y. 17: “Parties may in terms prohibit the assignment of any contract, and. declare that neither personal representatives nor assigns shall succeed to any rights in virtue of it or be bound by its obligation.”

' The recognition of the right of the assignee 'to any part of this money would practically nullify the effect of those decisions of - our own court which holds that a member can change his beneficiary only in the method pointed out by the constitution and by-laws.

It is perceived that, granted the power of the beneficiary to assign an interest during the life of a member, it follows that a member, with the consent of the beneficiary, could bring about the same purpose by assignment as would be accomplished by a new nomination made in conformity with the plan of insurance contained in the constitution and by-laws. Indeed he could accomplish much more for the person thus indirectly nominated need not be within the class of beneficiaries to which the bylaws restricts a nomination.

The counsel for the assignee presses with much force the argument that the assignment by the wife is to be regarded as a covenant to pay the assignee when the wife came into possession of the insurance money.

The assignment of possibilities and expectancies and future acquired property in equity, lias been explained upon the theory that the assignment operates as a contract by the assignor to' convey the legal estate and interest when it vests in him, and that equity subsequently enforces such a contract.

Mr. Pomeroy is not satisfied with this theory, but thinks that the assignment passes immediately a present possibility which is changed into an assignment of the equitable ownership as soon as the property is acquired. 3 Pom. Eq. Jur. §§ 1287, 1288.

If the assignment is to be regarded merely as an agreement to assign, then the point made by the counsel for the widow seems pertinent, namely, that the agreement was made for the benefit of the husband. It was executory until the money came to the hands of the assignee. Warwick v. Lawrence, 16 Stew. Eq. 183.

If, on the other hand, an equitable interest passed in prcesenti, then the assignment encountered the prohibitory clause in the by-laws. Indeed, the purposes of the prohibitory clause seems to forbid all assignments of whatever character, whether legal or equitable, and a discussion of the theory upon which equitable assignments rest is, in my judgment, of little moment.

Again it is insisted that the money is in court and that the question as to its disposition by this court is one differing from that which would have been presented had the assignee brought an action against the company, in which action the company had set up the prohibitory by-law.

This view obviously rests upon the theory that the enforcement of the by-laws is within the discretion of the company, or those officers of the company who paid the money into court; and that by such payment into court, they waive any objection to a payment to the assignee.

I am unable to see, however, how such payment can be so interpreted. By the payment into court under the bill of inter-pleader, the order admitted nothing, but that they were bound to pay some one. The order did not propose to incur the expense of litigating the question, which one of the two claimants "was so entitled, but left them to pay for the litigation. By taking this course they no more admitted the right of the assignee than the right of the widow. '

There is a class of cases in which the effect of filing an inter-pleader has been considered. The class includes those cases where a member has attempted to change his beneficiary by will or by assignment, or in some way other than the one pointed out by the charter or the by-laws of the order—that is, by the written consent of the order. In those instances the reason for the restriction is that the order may have information of the changes of the beneficiary; therefore, the restriction is for the benefit of the order itself. If the payment into court would in any instance have effect as a waiver, it would seem to be in this class. But it was held in Grand Lodge A. O. U. W. v. Connolly, 13 Dick. Ch. Rep. 180, that it made no difference whether the question arose under a bill of interpleader or not, the member must revoke his designation of a beneficiary and appoint a new one in the way pointed out by the by-laws of the order.

Under the contract, therefore, I am constrained to the conclusion that the assignment under which the assignee claims was invalid, and that.the money must be paid to the beneficiary.


author: Reed, Y. C.

text:
    Pierce Archer, executor, v. James Morris et al.
    [Filed October 23d, 1900.]
    The will of the testator in the case stated construed.
    This bill is filed by the executor of Daniel Morris, deceased, to obtain a construction of a clause of the testator’s will.

      Mr. Robert H. Ingersoll, for the complainant.

      Mr. Harry Wootton, for James Morris.

      Mr. Peter Baches, for St. Erancis Hospital, Rt. Rev. James A. McEanl et al.
   Reed, Y. C.

The testator gave thirty legacies, varying from $1,000 to $40,-000, altogether amounting to $150,000. After the payment of these legacies and the debts, which reached about $8,000, there is left a sum to be distributed in' the neighborhood of $42,000. This sum is disposed of by the testator in the following clause:

“After the payment of the said legacies, any balance remaining of my estate, I direct my executor to distribute one-half of the said balance ex wqus among the Home for the Aged and the asylum at Hopewell, and the other half ex wqus among the other bequests and legacies.”

The query is whether the one-half of the balance is to be divided between the legatees in proportion to the amount of the other legacies theretofore given or to be divided equally between them.

If the words of the clause had stood thus: I direct my executor to distribute the one-half of said balance among the home for the aged and the asylum at Hopewell, and the other half among the other bequests and legacies, there would not have existed a doubt that the distribution was to be upon the basis of equality. Is this result changed by the employment of the words *'ex cequsf’

The testator was a college graduate, fond of quoting from the Latin poets, and of using Latin terms. He meant to use an inflection of the word “cequus."

It is entirely clear that he meant “ex cequo.” “Aequus” means “even”—“equal •” from it comes the word “equity,” which equality is said to be.

These words, then, instead of modifying or changing the meaning of the clause, if read without them, fortifies that meaning.

In respect to the affidavit filed by consent, giving the language of the testator, after the execution of the will, as to the meaning of these words, it is to be remarked that the affidavit is inadmissible; and if admissible, it casts no light upon their interpretation. I think the executor should divide one-half of the remainder equally between the home for the aged and the asylum of Hopewell, and the other half equally between the other legatees.


text:
    George L. Field v. Jeremiah H. Field, executor, and Michael F. Field.
    [Filed October 24th, 1900.]
    Although an accounting by an executor hag been begun in the orphans court, the court of chancery will entertain a suit for an accounting in that court by next of kin and legatees of the testator where special reasons for proceeding in that jurisdiction are shown.
    On bill and plea.

      Mr. John U. Baclces, for the complainant.

      Messrs. Fluch é Parker, for the defendants.
   Reed, V. C.

The defendant, as surviving executor of Michael T. Field, filed a second account in the orphans court of Hunterdon county in 1895. Exceptions were filed to said account on August 15th, 1895. On September 15th, 1895, the same.came on for hearing; some testimony was taken and the hearing was adjourned until October 2d, 1895, at the request of the exceptants, and to enable them to agree upon an auditor to state the account; and if they failed to do so, then to proceed to take further testimony in behalf of such exceptants. They failed to agree upon an auditor, or to appear and continue the taking of testimony, and the matter has slept until the filing of this bill.

The bill is filed by children and legatees of the testator, and prays for an accounting in this court. It sets out that the executor bought in certain real estate at a foreclosure sale, under a decree which he had bought with the money of the estate, and that he claims to hold the said real estate as his individual property. The bill asks that it may be decreed that he holds the said real estate in trust for the estate. It also prays that an account may be taken of the rents and profits from said real estate. It also asks that he may be decreed to record the deed made to him by the sheriff for the said real estate. It also asserts that the executor is insolvent, and charges him with mingling the funds belonging to the estate with his own, and with using them to carry on his private business.

The plea challenges the jurisdiction of this court to take the account out of the hands of the orphans court after it liad begun the accounting.

It is settled that this court will not interfere with the jurisdiction of the orphans court, which has once attached, unless some special cause is shown.

There are, in my judgment, special reasons why this court should hold this accounting.

. The facts set out in the bill call for.relief which the orphans court cannot grant. The bill seeks to impress a trust upon the real estate bought by the executor, and also for an accounting of the rents and profits accruing from the said real estate. It seeks a sale of this property. All these are matters exclusively for equitable cognizance. They involve questions which can be settled only in a court of equity, and questions which should be settled before any accounting can be completed.

There must be an order overruling the plea, with costs, directing the defendant to answer the bill in thirty days, and if he fails to do so that the bill will be taken as confessed against him.


text:
    Maria H. Eakin v. Kate L. Shultz et al.
    [Filed October 24th, 1900.]
    A stipulation in a deed of conveyance inter partes that the grantee shall assume and pay a prior mortgage on the premises, is a contract with the grantor simply for his indemnity and will not be regarded as a contract with the mortgagee for his benefit.
    On demurrer to bill.

      Messrs. Watlcins & Avis, for the demurrant.

      Mr. Isaac 0. Acton, for the complainant.
   Reed, Y. C.

The bill was filed to collect a deficiency due upon a mortgage after the application of the proceeds of the sale of the mortgaged property to the mortgaged debt.

The mortgage was made by Martin Kates to Joseph Quest in October, 1849. This mortgage, through certain intermediate assignments, became the property of the complainant.

The mortgaged property, through certain intermediate conveyances, became the property of Joseph Humphreys, Sr. Upon his death it descended to his heirs, to one of whom, Samuel Humphreys, all the remaining heirs quit-claimed their interest. Samuel Humphreys died, -and the administrator of his estate, by order of the orphans court, sold the property to Edward Shoemaker. On March 4th, 1874, Shoemaker and wife sold the property to John W. Shultz. It does not appear that in any deeds made by the several owners from the mortgagor down to Edward Shoemaker, was there- an assumption of the mortgage debt in question. In the deed from Shoemaker to Shultz there was an assumption of four mortgages, of which the present mortgage was one.

Shultz died leaving all his property to his wife for life, with remainder to their children. Upon the settlement of the estate of her husband there was a balance of $992.60 paid to her, a part of which balance, under a power contained in her husband’s will, she invested in the purchase of a house and lot. This bill claims a lien upon the purchased property and upon the rest of the said balance.

The ground of attack upon the bill assigned in the demurrer is that it does not appear that Edward Shoemaker, the immediate grantor of John Shultz, who assumed the payment of the mortgage, and whose heirs and devisees are defendants, was personally liable for the payment of said mortgage debt.

It is entirely settled that the purchaser of lands subject to a mortgage, who assumes to pay the mortgage debt, becomes as between himself and the vendor a principal debtor, and the liability of the vendor is that of surety. The contract of the vendee is one of indemnity to the vendor solely. Klapworth v. Dressler, 2 Beas. 62; Hoy v. Bramhall, 4 C. E. Gr. 563; Crowell v. Hospital of St. Barnabas, 12 C. E. Gr. 650, 655; Mount v. Van Ness, 6 Stew. Eq. 262.

In equity a grantor may have the benefit of all collateral obligations for the payment of a debt which a person standing in the position of surety for others holds as indemnity. It is upon this ground that a mortgagee may pursue, in equity, the grantee upon his assumption of the mortgage debt. And if the grantor is not personally liable for the mortgage debt, the mortgagee cannot look to the grantee personally at all, because the assumption is one of indemnity, and there is nothing against which to indemnify. Norwood v. De Hart, 3 Stew. Eq. 412; King v. Whitely, 10 Paige 465; Mount v. Van Ness, 6 Stew. Eq. 262, 265.

Inasmuch as there does not appear to have been any personal obligation imposed upon Edward Shoemaker to pay the mortgage, Shultz’s assumption is a nullity and worthless to the complainant. There must be a decree for the demurrant.


author: Beed, V. C.

text:
    Peter Schlicher v. Louis Vogel, John R. White and Catharine White.
    [Filed November 2d, 1900.]
    1. Upon the facts established in this case—Held, that the defendants, Louis Vogel and Catharine White, are not liable to account to the complainant under their partnership contract.
    2. The purchase by one partner of all the interest of another partner, in the absence of fraud, must, of necessity, be an adjustment, as between seller and purchaser, of the accounts of the former with the firm.

      Mr. George 0. Vanderbilt and Mr. John T. Bird for the complainant.

      Mr. Edward M. Hunt, for the defendant Louis Vogel.

      Mr. Franh 8. Katzenbach, for the defendants John B. White and Catharine White.
   Beed, V. C.

On September 22d, 1897, a partnership was formed between Peter Schlicher, Louis Vogel and John B. White, under the firm name of White & Vogel. Schlicher was not to be known as a partner. Each member of the firm was to put in as capital $1,500. Vogel only paid $150 and gave his note to the' firm for the balance—$1,350—which note was endorsed by the firm and discounted in the Princeton bank.

This firm continued in the butcher and meat business at Princeton until October 22d, 1898, when Schlicher bought out Vogel’s interest in the firm. One of the terms of the agreement ¿o sell to Schlicher was that Schlicher assume the payment of the Vogel note of $1,350. It was agreed that the business should be continued in the name of Schlieher & White,

On October 27th, 1898, Schlieher and White entered into a ■contract, looking to the dissolution of their partnership relations. By the terms of this contract one Lyons was to have charge of the business and collect all moneys of the said firm and deposit them in the Princeton bank, and render an account each day.

It was agreed, that no money should be checked out of the bank unless on checks signed by both Schlieher and White. White was to have ten days to buy out the interest of Schlieher, .and if he should not do so within ten days, the partnership was to be dissolved.

On November 3d, 1898, they signed another agreement of dissolution, and by it White bought all the horses, wagons,, fixtures and stock of the firm. All book accounts were to be put into the hands of Martin W. Hubbard for collection, and the moneys collected were to be put into the Princeton bank, to be ■drawn on the joint checks of the parties. All obligations of the firm were to be first paid, and .the balance equally divided between Schlieher and White and Vogel. The amount collected had not been sufficient to pay the debts of the firm.

Schlieher files this bill for an accounting. The defendants are the two partners White and Vogel, and the wife of Mr. White. The principal question is whether Mrs. White should be called upon to account.

The way she became involved in the firm transactions is that she kept a boarding-house and bought meats from the firm. On September 20th, 1898, Mrs. White was indebted to the firm in the sum of $1,622.15. On October 27th White caused a credit to be given io his wife upon the books of the firm, and had the same amount charged up against himself. This seems to have been done by Mr White upon his own motion and for the purpose of relieving his wife, who was responsible, and substituting •himself as the creditor of the firm, who now appears of doubtful responsibility. It is not contended that this arrangement discharged the debt of the wife. The contention is that Mr. Schlieher has discharged her debt to the firm and accepted the husband as the creditor of the firm, by force of a receipt which he gave to White on December 12th, 1898. It is in these words:

“Received of Mrs. J. R. White one hundred and five 67-100 dollars in full settlement of book account due White and Vogel, or Schlicher and White.
“Dated December 12th, 1898. Petek Schlicher.”

The facts preceding the giving of this receipt are as follows: When White bought out Schlicher, the terms were as already remarked, that all debts due to the firm should be collected by Hubbard. White, who proposed to continue the business, wished to retain the trade of the old firm, and for this purpose he did not wish certain of the old customers who owed the firm to be pressed at once by Hubbard.- He made a list of such customers and the amounts of their debts, and proposed to give his own note for the amount to Schlicher, and that he himself should thereafter collect those debts. Schlicher consented, and White gave such a note for $1,068.52 payable in fifteen days.

It appears that Hubbard in making other collections inadvertently included some of the debts retained by White, and when the $1,068.52 note matured, White refused to pay it, alleging these collections by Hubbard. Schlicher wrote on November 22d to Hubbard to look into the matter. Hpon consultation it was agreed that the amount so collected should be fixed at $105.67. Now, it appears upon the firm books that Mrs. White, after September 21st, 1898 (being the date when her husband canceled her debt on the firm of $1,622.15), had bought meat amounting to $867, and had paid $700 on account, leaving a balance due upon the books of $105.67. The receipt, it is to be observed, is for this amount. Hpon'the giving of this receipt for this amount as paid, Mr. White paid the $1,068.52 note into the bank to the credit of White and Yogel, and consented that the note of $1,350 given by Yogel and discounted by the firm, which the bank had been carrying, and which had been assumed by Schlicher, should be charged up to the account of Schlicher & White. The question is whether this transaction released Mrs. White from any subsequent claim by Schlicher on account of the $1,622.15 book account, which had been canceled by her husband. I am constrained to the conclusion that this transaction resulting in this receipt does operate to relieve Mrs. White from this debt. The receipt in its terms is very broad, but, of course, it is open to. explanation. Now, it is true that the $1,622.15 is not mentioned in the receipt, and the figures mentioned in it is the exact balance which was due upon the face of the books for purchases made after the change of the charge against the wife to the husband. But it appears in the testimony that Sehlicher, at the time he gave this receipt, was fully aware of the fact that the charge against the wife had been shifted on the books to the husband, and he had complained of it. It appears that White, at the time that he asked for this receipt, told Sehlicher that his wife was to lend him the money, to pay the $1,068.52, and that before she did so she wished to be relieved from all liability to the firm. Sehlicher himself admits that White told him that his wife would lend him the money, and I have no doubt of the correctness of White’s testimony as to the rest of the conversation.

Now, Sehlicher having this information as to the desire of Mrs. White, I am unable to read his receipt in a way which will leave her still responsible for $1,622.15.

In respect to the consideration for the discharge of this amount, it is to be found in the fact that it was a favor to Sehlicher to have the $1,350 note which he had assumed entirely paid out of the funds in the bank which were partly the property of Mr. White. And if it be said that, this consideration was entirely inadequate to account for the discharge of a good debt of $1,622.15, it is to be remarked, as matters then stood, it was not regarded as a discharge of a debt to this amount, but only a discharge of such a debt against one person and the substitution of another person as the debtor. That Sehlicher, at that time, did not regard White as an irresponsible person is quite obvious from the fact that he had shortly before taken the fifteen days’ note for $1,068.52 from this person in payment of the same amount of debts to the firm which were entirely good.

I am constrained to the conclusion, therefore, that Mrs. White is not liable to account.

It is admitted that Mr. White should account.

It remains to consider the liability of Vogel. Vogel was indebted to the firm (apart from his note given for his portion of .the capital of the firm) in the sum of $931.19. He filed a plea setting up that by the agreement between him and Schlicher of October 5th, 1898, he sold to Schlicher all his interest in the partnership; that Schlicher covenanted to pay all the debts of Vogel arising out of or in respect to said partnership, and to pay and discharge all due or owing for or by reason of said partnershi|), and to save Vogel harmless from the same; and to release and quit-claim the several matters in the bill mentioned, of which an account is sought, and all demands which Schlicher had in respect to the transactions mentioned in the bill.

The only question now is as to the truth of the plea.

An agreement between Vogel and Schlicher dated October ■22d, 1898, is offered in evidence in support of the plea. By this .agreement Vogel assigned to Schlicher all his right, title, and interest in the firm business, property, accounts and money due. This agreement then provides that Schlicher shall assume the-payment of the $1,350 note given by Vogel to the firm for his share of the capital; then Schlicher agrees to release Vogel “of any and all indebtedness of said firm.” The plea, therefore, which states that Schlicher covenanted to pay all debts of Vogel, is not true. For all that Schlicher agreed to do (apart from the payment of the $1,350 note) was to release Vogel from all debts of the firm. The $931.19 debt was not a debt of the firm, but a debt due by Vogel to the firm. It was a debt which stood in the same relation to the firm as the $1,350 note of Vogel’s, which Schlicher assumed to pay, stood. But I am of the opinion that without any express discharge of Vogel’s debt to the firm, the sale itself operated to relieve Vogel from any liability to account to Schlicher. The purchase by one partner of all the interest of another partner, in the absence of fraud, must of necessity be an adjustment as between seller and purchaser of the accounts of the former with the firm.

The .purchaser, in getting the interest of the selling partner, gets what the selling partner would be entitled to upon an ac-counting and settlement with the firm. If his debts to the firm exceed the value of his share of the property of the firm his interest is worthless. But the sale of such.an interest involves the application of debts, to credit for the purpose of arriving at-the value of the interest. Such a purchase, therefore, is practically an account stated between the parties in respect to their relations as members of the firm.

The following eases exhibit the application of this logical result in cases like the present: Stoddard v. Wood, 9 Gray 90; Lesure v. Norris, 11 Cush. 328; Wiggin v. Goodwin, 63 Me. 389; Beckley v. Munson, 22 Conn. 299; Baldwin v. Bald, 48 N. Y. 673.

Numerous cases upon the point that a sale of a partner’s ■interest to another partner, as between them, extinguishes all .accounts upon the books standing against the seller, are cited in 2 Bates Part. 629-

Mr. Vogel is not liable to account to Mr. Schlicher;