text:
    Maria Sophia Kleb v. Jean Kleb et al.
    [Decided November 23d, 1905.]
    An antenuptial contract was made in Hanau, Germany, in the year 1861. It was stipulated as follows: “We voluntarily have engaged ourselves to be married; we are'not related and hereby wish [“wollen”], in case of the death without issue, to make a marriage contract to the effect that the surviving spouse shall be the sole heir of the predeceased spouse.” The parties to this agreement were at the time domiciled in the then electorate of I-Iesse Gassel, and did not possess any property. Several years after their marriage they came to New Jersey, and there acquired real estate, title to which was taken in the name of the husband. The husband subsequently died in Germany. In a suit by the wife against her husband’s heirs, based upon the above agreement, it was—Held, that the New Jersey land was within the scope of the contract. Semble, that in a suit against the heirs for the specific performance of the ancestor’s contract,, the contractee-complainant cannot testify as to transactions with or statements by the ancestor.
    On bill for specific performance of an antenuptial agreement.

      Mr. Ernest F. Eeer and Mr. Robert II. McCarter, attorney-general, for the complainant.

      Mr. John W. Queen, for the defendants.
   Stevens, Y. C.

This is a bill to compel the performance of an antenuptial agreement, made between the complainant and her late husband, Peter Ivleb. The defendants are his heirs-at-law.

The agreement was made at Hanau, in the year 1861, in the then electorate of Hesse Cassel. The original, signed by the parties and their parents, is contained in a court record of the town, and is translated as follows:

“Marriage Record, 1861, page 532. Hanau, this 29th day of April, 1861. In the presence of Assessor of the Court (acting judge) Schmedes. Clerk of the Court Michael. There appeared as the persons engaged to be married—first, former Peter Eleb, of Hanau, born on the 10th day of June, 1836, the legitimate son of Johannes Eleb, a driver, and of his wife, Elizabeth, nee Breitenberger, of this place. Second, Marie Sophia Marx, of Hanau, born on the 17th day of November, 1838, as the legitimate daughter of George Friedrich Marx, master butcher, and of his wife, Susanne Franziska, nee Eunz, of this place, who stated: We voluntarily have engaged ourselves to be married; we are not related, and hereby wish [“wollen,” a word importing obligation), in case of the death without issue, to make a marriage contract to the effect that the surviving spouse shall be the sole heir of the predeceased spouse. The parents of the two engaged persons declared their consent thereto. The parties engaged thereupon submitted the following documents: First, their (respective certificates of birth; second, certificates of the chief mayor of this place regarding the reception of the bridegroom to citizenship here, as well as in regard to his ability to make a living; third, certificate that notice had been given to the commander of the regiment; fourth, receipt for the citizen’s money; fifth, receipt for the marriage tax, and, finally, the parents of the persons engaged declared that they are willing to waive, in reference to this marriage contract,, their rights to their obligatory shares. Read and approved. Signed W. P. Eleb, Sophie Marx, Fr. Marx, Johannes Eleb, S. Marx, Elizabeth Eleb. For certification of signatures. Signed: Michael.”

At the time this agreement was made the parties had no property. The husband’s trade was that of a brass founder. They resided at Iianau, and continued to reside there for four years. Then they went to Switzerland, where they lived four years more, and then they came to the United States. After living in Yew York for a year they came to Yewark, where they had a restaurant and saloon. They labored together in the business and were so successful that in August, 1882, Peter Kleb purchased the premises known as 842 Broad street for $30,000, paying $9,000 or $10,000 in cash. They continued in this business, which was conducted in Peter’s name, until 1886, by which time they had paid off the $20,000 mortgage which secured a part of the purchase-money. Then they rented the property, which rapidly increased in value, and went back to Germany, where they continued to reside until September, 1901, when Peter Kleb died. Mrs. Kleb received the rents after his death until, desiring to sell, she discovered that, the deed was in Peter’s name and that on the record she had no title except to dower. It may be proper to add that the bill alleges that a will was made and proved in Germany, but the evidence, or perhaps I •ought to say the colloquy between counsel, shows that it was not <&ecutcd in such manner as to transfer title to real estate here.

The question argued was whether the antenuptial agreement made in Hanau operates upon real estate subsequently acquired in Yew Jersey.

■Story, in his work on Conflict of Laws, § 184, in a passage that has been frequently cited with approval, thus formulates the rule:

“1. Where there is a marriage between parties in a foreign country and an express contract respecting their rights and property, present and future, that, as a matter of contract, will be held equally valid everywhere, unless, under the circumstances, it stands prohibited by the laws of the country where it is sought to be enforced. It will act directly on movable property everywhere. But as to immovable property in a foreign territory, it will at most confer only a right of action, to be enforced according to the jurisprudence reí sitas.
“2. Where such an express contract applies in terms or intent only to present property, and there is a change of domicile, the law of the actual domicile will govern the rights of the parties as to all future acquisitions.”

In 1 Whart. Confl. L. (3d ed.) § 199a, the editor thus states the law as he gathers it from decisions made mostly since the above passage from Story was written:

“The statement in the last section that a change of domicile does not work any change of law governing the construction of the contract is undoubtedly true with respect to property, wheresoever situate, which is within the scope of the contract. It is often a question, however, what property is within the scope of the contract. That question is, in Us last analysis, one as to the intention of the parties. When the contract expressly, or by clear implication, covers future acquisitions after a change of domicile, its construction and effect with reference to such property, as well as property acquired before the change of domicile, are undoubtedly to be governed by the law of the original matrimonial domicile; but when.the contract applies in terms or intent only to present property, or is to be performed only in the country where made, and there is a change of domicile, the law of the actual domicile will govern the rights of the parties as to all future acquisitions, for upon this assumption the contract is eliminated, so far as such property is concerned.”

Counsel for the defendants, in support of their contention that the contract in question is to be construed as applying only to property that the spouses might have acquired in Germany, refer to the following cases: Fuss v. Fuss, 24 Wis. 256; Castro v. Illias, 22 Tex. 479; Besse v. Pellochoux, 73 Ill. 285; Long v. Hess, 154 Ill. 482. In each of these cases it was held that a marriage contract executed abroad by spouses domiciled there did not apply to or bind lands acquired subsequently, situate within their new domicile. In the Wisconsin and Illinois eases it was held that the language of the contract indicated an intention to localize it. The Texas case was put on other grounds. I have not been referred to any case, and I have found none, which decides that where there is nothing in the contract evincive of an intention to give a restricted operation to it; where it relates only'to after-acquired property, and where its terms are sufficiently comprehensive to include all such property, the mere failure to declare, in so many words, that it is to operate on property without the matrimonial domicile will prevent it from so operating. In Besse v. Pollochoux, the antenuptial agreement had been made in Switzerland, the matrimonial domicile of the spouses. It provided, among other things, as follows:

“1. The future husband associates and renders his future wife partaker of half the property acquired during their marriage.”
“3. Joseph Nicholas Besse, as well for his wife as himself, both present and natives of Orsieres, where they now live, desiring to prove to -the young couple their approval of the union to be contracted, give to their son, Joseph Nicholas, half of their immovable as well as their movable property, on the close conditions that the conjoints will work the other half still retained and belonging to said parents.”

They subsequently emigrated to Illinois. The husband there purchased real estate; the wife died and the heirs of the wife claimed title to one-half of it. Justice Scott, after adverting to the fact that the word “partaker” was one of doubtful signification ;• that no words were used which, in their ordinary or legal import, defined what estate the wife took, and that none were used that conveyed the idea that the estate should descend to her heirs, goes on to say: “The contract associating the parties thereto as joint partakers in the property to be acquired by the marriage does not specify any place where it is to be performed. ■But wre are not left in.doubt on this point. An examination of its provisions shows that it could not be performed at any place other than the place where it was entered into, viz., the place of. the matrimonial domicile.”

Long v. Hess, 154 Ill. 482; 40 N. E. Rep. 355, is to the same effect. The marriage agreement, made in the grand duchy of Hesse, provided, among other things, that the bride agreed “to receive the groom to live at her house;” that the groom brought into the marriage a piece of land situated at TJnter Beerfelden, and that the contracting parties subjected themselves to the general laws of Germany,'especially the rules and customs of. the country. Justiee Bailey said that the evidence furnished by the contract was “all in the direction of showing that their intention was to make Beerfelden their permanent home,” and that there was a total absence of express provision in the contract making it applicable to the future acquisitions of the parties, the case in that respect being, as he said, distinguishable from Scheferling v. Huffman, 4 Ohio St. 241, where “the contract by its-express terms was made applicable not only to the property then owned by the intended wife, but also to all property acquired during the continuance of the marriage.” The express terms thus referred to were contained in the following clause: “If I should die first, my affianced, Ernestine, shall inherit all my property,” a clause which does not differ materially from that under consideration.

It is evident that these two cases furnish no support to the defendants’ contention. Castro v. Illics, 22 Tex. 479, is another of the cases upon which complainants rely. There a judgment creditor sought to avoid, as fraudulent, a conveyance by a husband to his wife. It was attempted to support it by reference to the provisions of a marriage contract entered into in France by persons then subjects of that country. The agreement provided that there should be no community of property between husband and wife; that they should hold their respective properties separately, and that they intended to submit themselves to certain provisions of the Code Napoleon. The consideration for the conveyance alleged to be fraudulent was a debt due from husband to wife, said to have arisen many years before, under the provisions of this agreement. The decision was that the verdict of a jury condemning the conveyance as fraudulent should stand. As 1 understand the case, the decision was put ultimately upon the ground (1) that the contract would not bind creditors who had no notice of it, and (2) that the conveyance was fraudulent in fact. Under the provision of the marriage contract that the spouses should hold their property separately, I do not see how the wife could have claimed that, either in France or in Texas (if it operated on property in Texas), the marriage contract vested her with a title, legal or equitable, to her husband’s lands. If she took at all, it was under her husband’s conveyance, and this the jury foxxnd to be fraxxdulent. The case appears to have little or no relevancy to the question I am considering, although there are in the opinion dicta respecting it whose bearing upon the facts of that case are not quite obvious. Noxxe of them, however, go the length contended for.

The only case which appears to give any countenance to defendants’ position is Fuss v. Fuss, 24 Wis. 256. The agreement was xxxade at Cologne. It provided, so defendants say in their brief (though the case as reported does xxot give the clause verbatim) , that “the 'aforesaid John William Fuss hereby grants and transfers, as a full irrevocable property, by a lawful wax*ranty, and in the form of a donation among the living, to his wife, Anna M. Eichen, all and every personal and real property wliich shall belong to him, the donator, on the day of his death.” This was a post-nuptial and not an antenuptial contract. The wife had real property in Prussia at the time it was made. This was sold and the spouses emigrated to Wisconsin. Some of the money arising from the sale was invested in real estate in Wisconsin in the name of the husband. The husband died and the wife claimed it. Justice Dixon said: “There is nothing in the contract which speaks fully to the very point; nothing which manifests any intention of the parties to regulate or control by it, and according to the laws of their matrimonial domicile, their future acquisitions and gains of property in any foreign state or territorj^, or any property which should be held or owned by them in such state or territory. The contract was obviously made with reference to its operation and effect within the kingdom of Prussia upon the property of the parties situate there, and with no reference to property situate elsewhere. ,It appears that they had no property elsewhere, and there is no ground for supposing, that they, at that'time, contemplated any change of domicile, or a removal to this country or any other.” Had the opinion stopped here it would have seemed that there were, in the estimation of the learned judge, two circumstances which tended to show that the intention was to make the contract operative only upon lands in Prussia. These were (1) the fact that the wife had real property in Prussia which it was the design of the agreement to protect, and (2)- the form of the transfer, viz., “donation among the living,” an instrument unknown, both in its form and incidents, to the common law. But ho adds these words: “The contract, to have operated upon the rights of the parties abroad, must have been made with express reference to such operation.” If by this was meant that it must have been stated in the contract, in so many words, that it was intended to operate upon property without the domicile, then the statement is without support in any book referred to in the opinion: Story is the authority principally relied on, and Story says (at § 185) that where the express contract “applies in terms or intent, only to present property, and there is a change of domicile, the law of the actual domicile will govern the rights of the parties as to all future acquisitions.” This is a very different proposition from that contained in the sentence last quoted.

The Fuss Case and the three other cases above mentioned differ from the case in hand in two important particulars bearing upon the question of intent. First. In each of those cases the spouses, at the time of the making of the contract, possessed property. Second. The phraseology of the contracts was such as to indicate that all' the property to which their provisions were designed to apply was to continue subject to the law of the matrimonial domicile. Property without the domicile was, by implication, excluded from their operation. To use the words of Judge Story, it appeared affirmatively that the contract applied in terms or intent to present property or the property to be acquired within the then domicile. In the case in hand, neither of these indicia of intention appears. Mr. and Mrs. Kleb had no property when they made the agreement. They must, therefore, have intended it to operate upon after-acquired property. But the terms used in reference to their future acquisitions are of universal application. They contain within themselves no implication that they were to be limited to Hesse Gassel. Instead of such expressions as “partaker of half of the property,” “donation among the living,” we find “death without issue,” “marriage contract,” “the surviving spouse shall be the sole heir of the predeceased spouse.” Now, “death without issue” and “sole heir” are as familiar to the common as to the civil law. Their meaning is definite and well understood, and they are used in all their generality. It is conceded that the question is one of intent. This is not an artificial intent imputed without reference to the real wishes of the parties, but an intent such as we may reasonably attribute to them in the situation in which we actually find them.

In the construction of contracts it is proper to consider surrounding circumstances. In this connection there are two considerations not yet adverted to which seem to be of some weight. Spouses possessed of landed property are not as likely to think of bettering their condition by emigration as those who are possessed of none. At the period in question (1861) emigration from Germany to this country was, and for several years previously had been, taking place on a large scale. It is not unreasonable to suppose that an intelligent couple like Mr. and Mrs. Kleb might have regarded emigration as among the possibilities of their married life. But there is another and, as it seems to me, a stronger circumstance. In 1861 the town of Hanau lay in the electorate of Hesse Cassel, an independent principality. It was no part of the German empire, for the German empire did not then exist. It was an independent state, like Prussia or Saxony. Having, however, sided with Austria against Prussia in the war of 1866, it was, as one of the results of that struggle, incorporated into the latter state. Hanau, as may be seen by reference to any map published prior to 1866, lay in what may be described as a narrow neck of territory scarcely ten miles wide, from which one might see, to the southeast, the territory of Bavaria and, to the north, the duchy of Hesse Darmstadt. Such being the situation, is it reasonable to impute an intention to confine the marriage contract to such property as the spouses might acquire in Hesse Cassel and to exclude from its operation land, the subject of possible acquisition, in Bavaria and Darmstadt ? If it was the intention that the agreement should operate beyond Hesse Cassel, I do not know on what theory we could say that it would operate in some foreign' states and would not operate in others.

The question, then, being one of intention—intention to be deduced from the language of the contract and the surrounding circumstances—it seems to me more reasonable to credit Peter Kleb with an intention to constitute his betrothed, in default of issue, the heir of all his real estate, than the heir of such real estate only as he might thereafter have acquired in the narrow territories of .Hesse Cassel. If I devise my realty to A, this means not only my realty in Hew Jersey, but my realty elsewhere. If for valuable consideration I, covenant that I will devise my property to A, I presume that, in the absence of restrictive words in other parts of the instrument, no one would contend that the covenant did not extend to lands in New York or California—independent sovereignties, so far as this question is concerned. If by an antenuptial agreement I agree to make my wife, in default of issue, heir or devisee of my future-acquired estate, I am quite unable to understand why she should not take such real estate as I may be seized of at my death, not only in New Jersey, but elsewhere. It seems to me that such an agreement does speak to the very point. The cases uniformly hold that where, by the antenuptial agreement, it is shown to be the intention of the parties that its provisions shall apply to property without the matrimonial domicile, effect will be given to it everywhere unless its execution be incompatible with the laws or public policy of the country in which its enforcement is sought. Decouche v. Savetier, 3 Johns. Ch. 190; Le Breton v. Miles, 8 Paige Ch. 261; Crosby v. Berger, 3 Edw. Ch. 538; Murphy’s Heirs v. Murphy, 5 Mart. (La.) O. S. 83; Scheferling v. Huffman, 4 Ohio St. 242.

But it is argued that the contract must be regarded as local because of the provision that “the parents of the persons engaged declare that they are willing to waive, in reference to this marriage contract, their rights to their obligatory shares.” The argument is that this stipulation was local, and that consequently the entire contract must be deemed local. But, in the first place, there is no proof that it was local. The right to such-shares may have been, and was, no doubt, accorded by other states comprised within what was then geographically designated Germany. It existed under the Roman law, and was given by the Code Napoleon, section 915 of which reads as follows:

“Les Libéralties par acte entre-vifs, on par testament ne pourronl excéder la moitie des biens, si a défaut d’enfant, le defunt laisse un ou plusieurs ascendants dans chacune des lignes paternelles ou maternelles; et les trois quarts, s’il ne laisse descendants que dans uno ligne.”

Aside from this, the agreement is the independent agreement of the parents. They stipulate that whatever right they may have to their obligatory shares they are willing to waive. This is b}r no means equivalent to a declaration that their right to-obligatory shares will extend to all the property that their children may acquire, so lar as it may be subject to the antenuptial contract. That would be a strange construction that would restrict a general grant to the limits of the actual operation of a release by third persons. The release means simply this: Whatever right, if any, we may acquire in our children’s property, that we are willing to waive.

I am of opinion, therefore, that the antenuptial agreement extended to the property in question. It plainly appears that the subsequent acquisitions of the spouses were quite as much the result of Mrs. Kleb’s labors as of her husband’s, and Frederick Struberg testifies that often, in conversation after Kleb’s return to Germany, he (Kleb) would refer to the antenuptial agreement as giving to the longest liver “the benefit of all we are worth.” This evidence cannot influence its construction, but it shows at least that the result reached is not in conflict with the opinion of Mr. Kleb, as expressed in the latter years of his life.

■ There were other questions raised, but in the view that I have taken of the case only one need be adverted to. That is the question of the admissibility of Mrs. Kleb’s testimony of transactions with and statements by her husband. It was admitted under objection. The situation is this: Mrs. Kleb sues the heirs-at-law of her husband to enforce his contract in respect of lands descended. Are they being sued in a representative capacRv? The question has been twice before the court of errors and appeals, and it has declined to pass upon it. Wyckoff v. Norton, 60 N. J. Eq. (15 Dick.) 474; Kempton v. Bartine, 60 N. J. Eq. (15 Dick.) 411. In this court Vice-Chancellor Van Fleet, Crimmins v. Crimmins, 43 N. J. Eq. (16 Stew.) 86; Chancellor McGill, Vreeland v. Vreeland, 53 N. J. Eq. (8 Dick.) 390, and Vice-Chancellor Emery, McKinley v. Coe, 66 N. J. Eq. (21 Dick.) 70, have thought the evidence admissible, while Chancellor Runyon, Colfax v. Colfax, 32 N. J. Eq. (5 Stew.) 206; Vice-Chancellor Pitney, Greenwood v. Henry, 52 N. J. Eq. (7 Dick.) 447, and Vice-Chancellor Grey, Kempton v. Bartine, 59 N. J. Eq. (14. Dick.) 149, 158, have deemed it inadmissible. In this conflict of authority any expression of opinion on my part can have but little weight. It has seemed to me, however, that the reasons for its exclusion are stronger than those for its admission. Vice-Chancellor Van .Fleet’s decision seems to rest upon an erroneous conception of what was decided by Chief-Justice Beasley in Hodge v. Cornell, 44 N. J. Law (15 Vr.) 456. That this latter case was correctly decided no one can have any doubt. It was a replevin suit, and the wrongful act alleged was that of the defendant, not that of the defendant’s intestate. Chief-Justice Beasley said: “The defendant in this writ is called to account for a tort in his own person. With regard to any estate represented by him, the plaintiff has no concern. The defendant could not be sued in this matter in his representative capacity.” Plow, from a decision put upon this ground—viz., that the defendant was being sued for a tort of his own, not for the wrongful act of his testator—it could be legitimately inferred that the heir-at-law is not being sued in a representative capacity, when the suit is based upon the act or contract of the ancestor, I am at a loss to understand. The inference appears to me to be an entire non sequitur. Chancellor McG-ill simply followed Vice-Chancellor Van Fleet without giving the matter, as far as appears, independent consideration, and Vice-Chancellor Emery thought himself bound by their opinion. On the other hand, it seems to me that the principle upon which Joss v. Mohn, 55 N. J. Law (26 Vr.) 407, was decided leads to the opposite conclusion. There the action was brought by plaintiff against the devisoes of Mohn to recover money lent to testator in her lifetime. Mr. Justice Reed said: “The primary question is, Are heirs and devisees in actions under the statute representatives of the deceased debtor ? I think they are. Mr. Bouvier, in his Law Dictionary, lit. 'Representative/ uses this language: "The heir represents the ancestor; the devisee, his testator; the administrator, his intestate.’ It seems entirely undeniable that, in actions like the present, the heir or devisee stands in stead of and so represents the deceased debtor. * * * The object of the statute is to subject the real estate of the deceased debtor to a liability for all classes of debts left unpaid by such debtor.” It was held, in New Jersey Insurance Co. v. Meeker, 37 N. J. Law (8 Vr.) 282, that an action of covenant would lie, under the Heirs act, against heirs and devisees for a breach of covenant against encumbrances contained in a conveyance by an ancestor; that that act was “applicable to every obligation growing out of contract.” • Consequently, if an ancestor has made an agreement to convey real estate, an action to recover damages will lie for breach of it, and under Joss v. Mohn the heir in such action will be sued in a representative capacity. Now, if in a suit at law the heir is sued in a representative capacity, it would at least be singular if it were held that, in a suit in equity between the same parties to compel a specific performance of the same contract, the defendant was being sued in a non-representative character. Are not the obligation and the person the same? Have we not the same ground of liability, viz., the immediate devolution upon the heir of property bound in one form or another to answer for the ancestor’s obligation? The court in which relief may be sought and the particular species of relief asked for seem to be irrelevant considerations. That the court may look at the real character of the parties to the controversy is conclusively settled by Smith v.. Burnet, 35 N. J. Eq. (8 Stew.) 314, and Adoue v. Spencer, 62 N. J. Eq. (17 Dick.) 794. Hodge v. Coriell did not decide otherwise. All that it decided was that when a defendant was sued for his own tort, he could not, by pleading, change the issue to one involving the acts of his intestate. Smith v. Smith, 52 N. J. Law (23 Vr.) 207, rests upon much the same ground as Haines v. Watts, 55 N. J. Law (26 Vr.) 149, and does not touch the question under consideration, and Palmateer v. Tilton, 39 N. J. Eq. (12 Stew.) 40, and Rairdon v. Scampson, 67 N. J. Law (38 Vr.) 346, merely decide that the record determines the question of competency; that if the person offered as a witness is not a party to the record, he is competent, no matter what his interest may be. The court of errors and appeals has never decided, nor, as far as I can, find, so much as intimated, that if a person ,called as a witness appears by the allegations of the pleadings to be really sued in a representative capacity, the court may not exclude him, because the pleader has not, in so many words, called him administrator or heir or devisee, and has not expressly alleged that he proceeds .against him in that character. In Smith v. Burnet it decided just the reverse. If the pleadings or record state facts which show that he is suing or being sued in a representative character, then he is disqualified.

Eor these reasons, and for those stated by Vice-Chancellor Grey, in Kempton v. Bartine, supra, I should be disposed to exclude the greater part of Mrs. Kleb’s testimony. But there is one part of it which seems to be competent. It appears that since her husband’s death, Mrs. Kleb went to the record in Hanau and there compared a copy of the antenuptial agreement with the original. She says she knows her husband’s handwriting, and that the signature “W. P. Kleb” is his. This, I think, •she may testify to. It is not evidence of a transaction with or statement by the deceased. In the absence of evidence to the contrai7, it may reasonably be presumed that her knowledge of his handwriting was at least partly acquired in other ways than by transactions with him.

I think Mrs. Kleb is entitled to a conveyance from the heirs of the legal title to the Broad street property.


source: Caselaw Access Project

author: kSteviíks, Y. C.

license: Public Domain

text:
    Abram Speer v. Erie Railroad Company.
    [Decided January 27th, 1906.]
    1. A strip of land through a farm was conveyed to a railroad for a right of way, by a deed in which the railroad covenanted to provide the grantor with a convenient road crossing. One of the severed portions of the farm was intersected by a road, but there was no method of egress from the other portion, except over the railroad crossing, and through the intersected portion to the road.—Held, that the right to use the crossing is not limited to the use of it as a farm crossing, but that the original grantor and his grantees have a right to use it for any purpose to which the land became adapted.
    2. The right to use the crossing is not restricted to the original grantor .and his grantees of the whole tract, but grantees of subdivisions thereof are entitled to use it.
    3. A strip of land through a farm was conveyed to a railroad for a right' of way, by a deed in which the railroad covenanted to provide the grantor with a convenient road crossing and make necessary fences on both sides of the track. The railroad company erected fences with gates .at the crossing composed of sliding bars.—Held, that the company had no absolute right to maintain these bars after they had become unnecessary .and inconvenient, because the land had ceased to be used for agricultural purposes and been plotted and sold for residence lots.
    4. In a suit to enjoin the maintenance by a railroad company of an ■embankment destroying a crossing to which complainant was entitled under a covenant in his grantor’s deed to the railroad company, evidence held to show that complainant was damaged to the extent of $3,000.

      Mr. Frederick J. Faulks and Mr. Halsey M. Barrett, for the •complainant.

      Mr. Cortlandi Parker, Jr., and Mr. B. Wayne Parker, for the ■defendant.
   kSteviíks, Y. C.

The bill in this case was filed to restrain the defendant froui maintaining its embankment where the complainant had a road crossing over defendant’s railway between the severed portions •of his farm. This court decreed that the company should construct a tunnel or opening through the embankment substantially at grade, such opening to be not less than twelve feet in height and .width. On .appeal it was thought that this direction was too onerous. It was held that the complainant’s right to a crossing was not destroyed by the elevation of the tracks, but it was thought that the complainant was only, under the circum■stances, entitled to damages, and that if he was willing to have them assessed in this court the bill might be retained for that purpose. The submission has been made. The question thus presented is not without difficulty, for the amount of damages will depend upon the precise nature of the complainant’s right. If the crossing is to be regarded.as a mere farm or agricultural crossing, and not a crossing for all purposes, I think that $500 would be an adequate compensation for its destruction. But if the crossing is to be regarded as a crossing for all the purposes for which the land is or may become adapted, then I think that his damages are considerably greater.

In the opinion on the application for injunction I held that the covenant that the predecessor of the defendant company would “provide the party of the first part with a suitable and convenient road crossing across the track of said-railwaj'” gave an- unlimited right—a right of passage for all purposes. I do not find in the opinion on appeal any dissent from this view, and further reflection has only confirmed me in its soundness. Speer, the complainant’s ancestor, when he conveyed to the railroad company in June, 1870, was the owner of a farm extending easterly from Clilfside avenue to Valley road, and thence across Valley road to a line about eight hundred feet distant therefrom. The railroad, running north and south, cut this farm in two. The tract which lay west of the railroad embankment contained a little more than nine acres, and was completely severed, not only from the land lying east of the embankment and west of the Valley road, but also from tire dwelling-house and barn, which lay east of that high wary and could only be reached, without trespassing upon neighboring property, bjr making a long circuit of three-quarters to seven-eighths of a mile. ■

How, Speer’s right being a right to pass from the land west of the railway to the land on both sides of Valley road, and to Valley road itself and back again, can it be said that if he had built a house or barn on the severed tract,-he would not have had the right of -passage therefrom to Valley road? And if he had built two or three houses, would not his. right have been the same ? And suppose he had. conveyed the entire farm to two or three or twenty persons as tenants in common, would they not have acquired the same right? Where do we find it written or implied in the covenant that when Speer ceased to use the land for agricultural purposes his right to pass over the crossing terminated? The language of Master of Rolls Jessel, in Newcomen v. Coulson, 5 Ch. Div. 133, is applicable to the situation here: “It was said that the grant conferred a right to use the way only so long as the allotment was used for agricultural purposes. I cannot find any such restriction. The right is to the owner or owners for the time being of the land. Now, land, according to English law, includes everything on or under the soil. All buildings that you may erect on it, all mines that you may sink under it. * * * I have no doubt that the word ‘land’ was used advisedly. This being so, it appears to me that the right is a general right of way—a right of way to all the houses that may be built on the land in question.” That the right, as Speer had it, passed to his grantees has been conclusively settled in this case, for the suit has been adjudged by the court of errors and appeals to be maintainable by the present complainant, who is tire heir of the original grantee.

But it is contended, further, that while Speer and his grantees of the entire farm would have the right, a grantee of a lot in the tract west of the railway would not have it, and that consequently the possibility of utilizing portions of the land for building purposes and selling it for those purposes cannot enter into the question of value or of damages. In other words, that, so far as this question is concerned, the land must be regarded as farm land only for all time to come. The cases relied upon to support this contention are Marino v. Central Railroad Co., 69 N. J. Lem (40 Vr.) 628, and the Pipe Line Co. v. Delaware, Lackawanna and Western Railroad Co., 62 N. J. Law (33 Vr.) 254. In the first ease, a railroad company, empowered to take by condemnation, was required by statute to maintain over or under its road suitable wagonways where the railroad intersected the land of an individual owner, “so that he may pass the same.” It was held that the owner had a right of way across the railroad, appurtenant to each of his divided tracts, but that his right was not transmitted to a grantee of a portion of the lands lying only on one side of the railroad. Chancellor Magie said: “The right reserved and the duty imposed by that section [section 9 of the charter of the M. & E. R. R. Co.] is only in favor of tlie person who owned the lands intersected by the railroad when the railroad right was acquired by condemnation, or Ms grantees of the whole or a portion of said lands still intersected by the r.ailroad.” The decision was rested upon the authority of the Pipe Line Case. There, one Stewart had conveyed to the Morris and Essex Railroad Company a strip of land on which to lay its tracks, with a reservation of “a suitable wagonroad or crossing * * * so as to enable said Stewart to travel and cross freely between Ms lands on each side of said granted premises.” The Stewart title, excepting the strip, conveyed to the railroad, became vested in one Meagher.' Meagher conveyed to Breckenridge, not the entire farm (see page 275 of case), but two lots,-each fifty by two hundred and fifty feet, one on the north side and the other on the south side of the lands conveyed to the railroad company. These lots adjoined such lands and extended on each side of them entirely across the passageway. It was conceded in that case that under the various conveyances Breckenridge had a right of crossing between these two lots thus severed, but it was held that such right did not give the right to lay oil pipes under the railway. Mr. Justice Depue said: “The laying of these pipes in the roadway in no sense conferred a benefit on the lands to which the way was appurtenant, nor were the pipes adapted to facilitate access between the two parcels of land to which the easement was appurtenant.”

I have particularly mentioned these cases because it appears to me that, so far from. supporting the position of defendant, they are authorities for the opposite view, at least to this extent. They concede that a grantee of a part of the land has a right of crossing if the land acquired lie on both sides of the crossing and adjoin it, and this, too, in cases where the right is a limited right and not a right of crossing for all purposes.

In the Marino Case, the right was held to be limited by statute in the same way that in the Pipe Line Case it was held to be limited by the explicit language of the deed. It was not decided in either of those cases that where the crossing given was a crossing for all purposes, the lot-owner owning on one side would not have the benefit of it. In the case of United Land Co. v. Great Eastern Railway Co., L. R. 10 Ch. App. 586, cited with approval in the Pipe Line Case, it was held that he would. But I am not obliged to decide whether he would or would not, for the reason that it is quite within the power of the complainant to avoid the question altogether. I must assume that, as a reasonable man, intent upon getting the full value of his property, he would subdivide his land so as to preserve and perpetuate all his rights. The complainant has put in evidence a map or plan. It and the additional evidence make it clear that at the time the embankment was built and the crossing destroyed, the land in the neighborhood had come into the market for building purposes. Hew streets had been laid out around the Speer tract and new buildings had been erected. Upper Montclair had reached out to that point. The plan shows a road running east and west through the middle of the tract, touching the crossing east and west of the railway. It also shows lots plotted on both sides of it. How, it would be easy for the complainant to give to each purchaser of such a lot a right of way along the whole course of this road, or if that did not satisfy the requirements of the Mari-no and Pipe Line Gases, he could divide the land over which the road is shown into as many undivided parts as there are lots, and with each lot he could give one of these parts. The grantee of any lot would then own, in fee-simple, land on both sides of the railway continuously from his lot to Yalley road.

But another and somewhat singular point has been raised. The entire clause in the Speer deed reads as follows:

“The party of the second part (the railroad company) doth, for itself and its successors, agree to make and maintain the necessary fences on both sides of said tract of land, which shall be built before the grading on said tract is commenced, and shall provide the party of.the first part with a suitable and convenient road crossing across the track of said railway where the party of the first part may direct.”

The proof shows that the company made the fences and put in sliding rails at the crossing. The argument is that the company had a right to maintain these rails; that those who might have lawfully crossed would have been obliged to replace them as often as they took them down, and that the lots west of the track would have derived from such a crossing, so obstructed, little if any benefit. The evidence is that if the lots fronted on a roadway thus barred they would have less value than they would if the crossing were unobstructed.

The company’s right is asserted to have been an absolute right to maintain bars, however inconvenient they might have been to the lotowncrs. The deed itself is silent on the subject. The general rule is that gates or bars may be placed at the termini of a way, particularly an agricultural way. It is based on the great preponderance of convenience to the landowner over the slight inconvenience to- the wayowner. It ceases when the preponderance of convenience is in favor of,the wayowner. Godd. Easem. 331.

In Jewell v. Clement, 69 N. U. 133; 99 Atl. Rep. 582, Justice Wallace says: “From the creation of a way by deed in general terms, without a provision giving the owner of the land over which it passes the right to erect gates or bars, neither a grant nor a denial of that right is necessarily to be implied. But the right to erect them cannot be implied if they constitute an unreasonable obstruction to the reasonable and proper use of the way. Neither party could have intended that the reserved way was to be subject to any unreasonable obstruction. Whether the erection of the bars by tire plaintiff was a proper use of his premises, compatible with the defendant’s reasonable enjoyment of the easement, or was an unreasonable'obstruction of the way is a question of fact.” Gates or bars were deemed proper in the following, among other cases: Boyd v. Bloom, 152 Ind. 152; 52 N. E. Rep. 751; Connery v. Brooke, 73 Pa,. St. 80; Short v. Devine, 146 Mass. 119; 15 N. E. Rep. 148; Bakeman v. Talbot, 31 N. Y. 366. The right to maintain them was denied in the following: Smith v. Worr, 93 Cal. 206; 28 Pac. Rep. 944; Devore v. Ellis, 62 Iowa 505; 17 N. W. Rep. 740; Jewell v. Clement, supra; Welch v. Wilcox, l0l Mass. 162; Williams v. Clark, 140 Mass. 238; 5 N. E. Rep. 802; Dickinson v. Whiting, 141 Mass. 414; 6 N. E. Rep. 92.

Williams v. Clark was the case of a railroad crossing. H. conveyed to a railroad company by a deed which provided that tlie company should furnish him with two convenient crossings, to be thereafter designated. One was so designated and a crossing built. Justice Devens said: “While, in terms, it was not provided that this crossing should be unobstructed by gates or bars, yet the fact that it was to be convenient, and that the Compaq itself constructed and for many years permitted the existence of such a one, sufficiently shows that what it intended to grant was a free right of passage. Ro usage or circumstances such as are shown where one grants a way or right of way over a field devoted to agricultural or other purposes, indicating that the right granted is to be subordinate to the right of the grantor or the use made by him of the premises, here exist. That a crossing obstructed by gates or bars is far less convenient to those entitled to use it is fully conceded by the defendant’s argument.” In this case gates or bars were not erected in the first instance. In the ease at bar they were. But I do not understand that this circumstance was regarded as decisive. It was one to be taken into account. Bakeman v. Talbot, supra, was the case of a Avav over a farm and woodland, Avhere it was thought that “slip-rails” or bars A\rere not an unreasonable Obstruction. Chief-Justice Denio used this language: “There is nothing inconsistent in holding that the present arrangements are suitable and sufficient under existing circumstances, and after those circumstances liaAre changed, and the question shall arise ¿s to Avhat shall then be proper, to determine that a passage perpetually open' or a system of gates better adapted to such increased use than the present fences and bars shall be required of the defendant. * . * * The doctrine that the facilities for passage where a private right of way exists are to be regulated by the nature of the case and the circumstances of time and place is very well settled by authority.”

If a way given for all purposes cease to be used for agricultural purposes and become useful for other purposes it may be adapted to those purposes. It is a well-established rule that “in doing the works that are necessary for the enjoyment of the easement, the OAvner of the dominant tenement may do ever)'thing that is required for the full and free exercise of his right.” Gale Easem. (7th ed.) 484. In Finlinson v. Porter, L. E. 10 Q. B. 188, the grantee of an easement of drain was allowed to deepen it in order to adapt it to the sewer as altered hy the local authority. In Dand v. Kingscote, 6 Mess. & W. 174, the proprietor of an old colliery, who had a right of way to it, granted long before the days of railwajrs, was held entitled to make a railway thereover for the purpose of transmitting his coals. In Newcomen v. Coulson, 5 Ch. Div. 138, Vice-Chancellor Malins held that a lane that had been used for agricultural purposes might be converted into a metaled road for the benefit of newly-erected cottages. His judgment was affirmed on appeal. In these cases the cost of the alteration was borne by the owners of the dominant tenement. I see no reason why, if sliding rails, because of-the changed use, become a source of danger rather than a means of safety, the owner of the dominant tenement may not become entitled to have substituted cattle guards, such as the law prescribes in the case of country roads, but perhaps, notwithstanding the language of the deed, at his own expense. But whether he should do the work under the supervision of the railway officials, or whether they should do it at his request and at his charge, or whether the company should do it at its own cost, is a matter of no consequence here, for the cost in any event would be so small that it would not materially affect the result.

This brings me to the question of the amount of damages to be awarded. The supplemental evidence makes it clear that the land is not to be treated as farm land. Excluding the lots on Mountain avenue and Valley road—the most valuable part of the tract—the highest estimate of the interior land-—about nine acres—by any of the complainant’s witnesses is $1,200 per acre, and the lowest estimate of any of defendant’s is $300. The depreciation caused hy the destruction of the way is variously estimated by complainant’s witnesses at from $300 to $700 per acre; that is, from $2,700 to $6,300. These witnesses all agree that gates or bars ‘would materially diminish the value of the land. Of the defendant’s witnesses, two, Mr. Grane and Mr. Van Duyne, give an estimate of the value of the interior land on the basis of a crossing obstructed by gates or bars. They do not expressly estimate it on the basis of an unobstructed crossing. Of the other witnesses for defendant, Hinks thinks that the closing of the way has been of benefit to the propertjy while Holmes thinks it a detriment to the extent of $50 per acre. He says: “Of course, land that has no interior access is not worth as much, ordinarily, as land that has.” I do not think it can be doubted that an unobstructed passageway from the lots, as they would naturally be laid out, and as shown on complainant's map, to Yalley road would be likely to make them more attractive to that class of buyers who would build houses costing from $3,000 to $4,000. The neighborhood is being rapidly improved by the erection of dwellings of that description, and this particular jract appears to be suitable for inexpensive residences. Buyers without carriages of their own would regard a direct way to Yalley road, a main thoroughfare with a trolley line on it, leading into the heart of Montclair, as a considerable convenience, and as such it could not fail to have its influence upon the price. Such a road would no doubt be regarded as preferable to a more roundabout wajr over neighboring land, if complainant were able to purchase it.

It is necessarily a matter of conjecture as to how much complainant has been injured. Resort must be.had to opinion evidence of a somewhat unsatisfactory kind. But it is. the best available, and it has been necessitated .by defendant's action in destroying complainant's right in the face of actual notice. Under these circumstances it does not seem to me that all doubts should be resolved in defendant's favor. I think the weight of the evidence fairly warrants a finding that the right destroyed is worth $3,000.


author: Grey, V. C.

text:
    Wesley B. Porch v. The Agnew Company.
    [Decided August 22d, 1905.]
    1. A corporation contracted to pay for the services of an employe by issuing to him a part of its stock. The stock was issued to the president, in trust for the employe. Subsequently it was agreed between the employe and the president that the latter should hold a half of the stock for his own use, and that the former should be paid a money compensation for his services.—Held, that the employe could not recover from the company the money compensation, as á recovery thereof would enable him to obtain compensation twice.
    2. If directors of a corporation are employed in the business of the corporation, and agree to pay themselves a stipulated sum, the agreement is void, and no recovery can be based upon such contract, but for such services as they render they may recover upon a quantum meruit.

    3. An officer of a corporation paid for $25,000 worth of property for it. He received its bonds to that amount on that account. Subsequently the company adopted a resolution pledging to him $15,000 more bonds as collateral. At this time the company was insolvent. At the time the $25,000 was paid the understanding was that he should receive bonds as collateral only to that amount.—Held, that the resolution was void as an attempt in contemplation of insolvency to protect the officer, and in violation of the provision of the Corporation act forbidding directors of any corporation unable to pay its ordinary debts to transfer its property.
    4. A contractor, installing a kitchen equipment in a.hotel and attaching the same to the building, in accordance with the owner’s intention that it should permanently become a part of the building, is entitled to a mechanics’ lien.
    5. A corporation, organized to construct and manage a hotel, employed its secretary to manage the details of the work of construction. He employed a contractor to install a kitchen equipment. While the work was being done the president of the- corporation was in frequent attendance, and the equipment was accepted by the corporation when it subsequent^' started in business.—Held, that the equipment was ordered by competent authority, entitling the contractor to a lien.
    6. Under P. L. 1898 p. 550 § 28, which provides that the sale under a lien claim judgment shall pass title, subject to any mortgage given under the circumstances stated in section 15, which provides that any mortgage recorded before a lien claim is filed shall have priority to the extent of money actually advanced by the mortgagee and applied to the erection of any new building on the 'premises, a mortgagee cannot claim a lien superior to a mechanics’ lien without showing that the money was loaned for and actually applied to the erection of a building on the premises; and proof that the money was spent in buying furniture for a building thereon is not sufficient.
    On bill for insolvency, &c. On appeal from receiver’s determination on claims, &c.
    The defendant company has been decreed to be insolvent, and a receiver has been appointed.
    The claims of creditors have been presented to him, several hearings have been held and a considerable amount of testimony has been taken. The master has reported his adjudication on the creditors’ claims.
    There are several appeals from the receiver’s determination, which will be separately considered.
    Wilmer R. Batt, a creditor, presented two claims to the receiver, one of $6,125 for compensation for the organization and incorporation of the defendant company, the other, $913.51, for his salary for services rendered to> the defendant company.
    The receiver admitted the ‘claim of $913.51 for salary, &c., but rejected that for $6,125 for compensation for organization, &e., of the company.
    Mr. Batt appeals from this rejection of the $6,125 claim.
    Clarence M. Busch, a stockholder, bondholder and general creditor of the defendant companj’, appeals from the receiver’s adjudication which admits Mr. Batt’s $913.51 claim to a dividend.
    The receiver has also refused to admit the claim of Clarence M. Busch, a bondholder, so far as it is based upon his holding $40,000 of the first mortgage bonds of the defendant company, delivered to him as collateral security for the payment of $25,000 advanced by Mr. Busch to the company.
    Mr. Busch appeals from this decision of the receiver.
    Mr. Busch also appeals against the following adjudications of the receiver:

      The admission of the above-named claim of Wilmer R. Batt for $913.51, because nothing should have been allowed him; the admission of the claim of the DuParquet, Huot & Monense Company as a preferred mechanics’ lien claim over certain bonds of the company, when no part of it 'should have been preferred over said bonds; the admission of the claim of Milligan & Webber for $3,125, when no part of it should have been allowed.

      Mr. Harrison H. Yoorliees, for Wilmer R. Batt.

      Mr. William M. Clevenger and Mr. George A. Bourgeois, for DuParquet, Huot & Monense Company.

      Mr. Clarence L. Cole, for C. M. Busch.
   Grey, V. C.

The defendant company was the owner of á large hotel, situate immediately on the ocean front in Atlantic City. ' It was built in 1902, was completely furnished, and was in the conduct of active business at the time of its failure in the latter part of that year.

, Before it was decreed to be insolvent, the company had made a mortgage upon its property to the amount of $250,000, securing its bonds to that amount, which were issued at successive periods in its short life, in various denominations, largely to pay or secure the company’s debts.

There were also mechanics’ liens for work and labor done and materials furnished in the construction of the hotel. These aggregated a little over $3,000.

The validity of these liens on the hotel property was disputed, and under the provisions of section 81 of the Corporation act, and the order of this court, the property was sold by the receiver at public vendue.

His first sale was challenged because of its very low price, and the property was sold a second time, producing in the aggregate, for both real and personal, the sum of $75,100.

The claims of creditors have been presented to the receiver, who has passed upon them, and some of his adjudications have been appealed from, as above stated.

The claim of Wilmer R. Batt, referred to in the testimony taken by the receiver as “Dr. Batt,” has been allowed as to $913.51, asserted to be due for salary for superintendence of the company’s business, and rejected as to $6,125 for alleged services rendered in incorporating and organizing the company. The allowance is appealed from by Mr. Busch, another creditor, and the rejection by Dr. Batt himself.

The testimony shows that the salary item of $913.51 is a balance claimed by Dr. Batt for services rendered by him in overseeing and managing the construction of the hotel, and for general superintendence of the company’s business.

Dr. Batt claims that the company’s obligation to him on this item arose in this way: He asserts that an agreement between himself and the company was made by which fifty per cent, of the whole capital stock of the company should be given to him to compensate him in a lump paycment for services of superintendence, &c. This appears in the testimony of Dr. Batt himself, and also, as he claims, in a resolution of the company, by which one-half of its capital stock, amounting to a par value of $125,000, is directed to be issued to Dr. Batt, as payment for superintendence and medical directorship. Dr. Batt testifies that he knew that this fifty per cent, of the whole capital stock of the company was in fact issued under this resolution to Mr. Busch, for him (Dr. Batt).

Dr. Batt further testifies that he and Mr. Busch afterwards made a bargain between themselves, by which Dr. Batt relinquished one-half of this stock ($61,125) in par value to Mr. Busch. Dr. Batt further testifies that it was arranged between him and Mr. Busch that thereafter, in lieu of this stock, he should receive a cash money compensation from the company for his work at the hotel. Thereafter he was so paid. The present claim of $913.51 is for a balance of this cash salary not yet paid to Dr. Batt.

In testifying about this transaction, Dr. Batt declares that as fax as the division of the stock which had been issued in Busch’s name was concerned, it was personal between him and Busch; but as far as the arrangement as to salary was involved Batt supposed that Busch (who was president of tire company) was speaking as president of the company.

When the company issued this $125,000 of capital stock to Mr. Busch, under its agreement with Dr. Batt that he should receive it for his services in superintendence of its affairs, and Dr. Batt accepted this disposition of that stock, and dealt with the stock thus issued as his own, by relinquishing one-half of it to Mr. Busch, in a personal agreement between them, tire company had performed its part of its contract with Dr. Batt and had paid him for his services' in superintending its business. Dr. Batt does not claim to have surrendered or returned the stock to the company. Mr. Busch already had it in his possession for Dr. Batt’s benefit, and Dr. Batt, by a personal agreement with Mr. Busch in the nature of an equitable assignment relinquished to Busch a one-half interest in that stock, so that Mr. Busch, in his personal capacity, became thereafter the owner of that half without any obligation to hold it for Batt’s benefit. The effect of Mr. Busch’s arrangement with Dr. Batt that thereafter the company should pay Batt in cash for his services was simply an agreement between Busch and Batt that they would keep the stock and that the company should pay Batt again in cash for his work at the hotel, for which it had already paid him by the issue of stock.

By this scheme, if permitted to succeed, the company would-be made to pay Dr. Batt twice for the same service, once by the issue, for Dr. Batt’s benefit, of half of its capital stock, part of which he transferred to Mr. Busch, and again by the monthly salary unpaid, part of which, $913.51,’ Dr. Batt now presents to the receiver as the basis of a claim to a dividend. There is no equity in such a claim, and it should have been rejected.

The receiver was, I think, mistaken in allowing this item, and the appeal from his adjudication should be sustained.

Dr. Batt appeals from the receiver’s disallowance of the other item for $6,125 of bonds of the company, which Dr. Batt claims are due to him under a resolution which he contends was passed by the board of directors at a first meeting held in Camden in January, 1902. The resolution is as follows:

“Resolved. That bonds for two and a half per cent, of the amount of capitalization be set aside for payment of the expenses of organization and incorporation, and be used as the president and treasurer may direct.”

The meeting at which this resolution was passed is neither recognized nor entered in the regular minute-book of the company, which was kept by Dr. Batt himself as secretary and treasurer of the company. He claims that this Camden meeting was held in Camden ferry-house immediately that the company was organized, and produces a separate sheet of paper as a copy of its minutes.

The testimony indicates that some sort of a meeting was held at the Camden ferry-house. Mr. Bird, one of the incorporators who attended it, differs radically from Dr. Batt as to what was then done. Bird says they met simply to elect officers, and that is all that they did, and that Dr. Batt was a director.

The minute-book recites the first meeting to have been held in Atlantic City in March, 1902, and nothing is said about the above-quoted resolution. Dr. Batt was a director, and also secretary and treasurer. As secretary he signed this minute in the book. He testifies that he never received any bonds in accordance with that resolution. He further testifies that no different arrangement modifying the resolution was ever made.

It will be noted that the resolution does not recognize Dr. Batt as having theretofore rendered any services in the organiza-' tion or incorporation of the company, nor employ him to render such services in the future, nor does it direct that any bonds be issued or delivered to him, nor is there any proof that the president and treasurer of the company ever directed that these bonds be delivered to Dr. Batt for services in regard to the company’s incorporation, or for any other services.

Other testimony of Dr. Bat't shows that for fees paid to lawyers, and for incorporation taxes paid to the state, and various other like items, Dr. Batt submitted a bill for $500 and received in payment therefor the bonds of the company for that amount.

The services of Dr. Batt, relative to the incorporation and organization of the company, for which he claims to be entitled to $6,125 of bonds, must have been rendered 'before and at the time of the initiation of the compan}’’, if they ever were in fact performed. No proof was submitted to the receiver to show what these services were, nor when they were performed, nor at whose request, nor that the company, either by formal corporate action or by informal acceptance, recognition and ratification, became liable to pay for them to Dr. Batt.

The receiver, in my view, rightfully rejected this item of Dr. Batt’s claim, upon the proof which was submitted to him.

Since the receiver passed upon the claims of Dr. Batt, the latter obtained leave to submit additional testimony in support of them. This further testimony has now been filed on this appeal. It consists wholly of explanatory and additional evidence from Dr. Batt himself and Mr. Bird, both "of whom were examined before the receiver, and there apparently gave all the testimony upon this subject which was within their knowledge.

Before the receiver Mr. Bird testified that he was at the meeting held in Camden ferry-house; that Dr. Batt said he was having plans made; that it was talked over, but what the conversation was he was unable to say; that they met to elect officers and directors, and that was simply what they did.

In his new testimony, taken more than a year afterwards, he declares that it was agreed in the discussion at that meeting that Dr. Batt should receive two and one-half per cent, of the bonds of the company for his services in'promoting and selling the bonds of the company. He did not think it was mentioned who was to determine when this work was done. When confronted with the resolution drawn by Dr. Batt himself, which does not mention the employment of Dr. Batt to promote the company, to sell its bonds,"or to do anything else, and provides no compensation .for him, Mr. Bird thinks the part of the resolution which directs that the bonds shall be used “as the president and treasurer may direct” is a mistake. Dr. Batt testified before the receiver that no arrangement different from the resolution was ever made.

This new testimony adds nothing to the weight or credibility of Mr. Bird's evidence. His first deliverance, before the receiver rejected Dr. Batt’s claim, which declares that they met in Camden simply to elect officers, and did. it, is probably the better recollection, because that relation of the affair was given at a time much nearer to the happening of the incident, and was narrated without a definite purpose on Mr. Bird's part to support Dr. Batt's claim, which now clearly appears.

Dr. Batt, in his new testimony, attempts to contradict, the terms of the resolution which he himself drew, and to show that at the Camden ferry-station meeting (in which he participated as director and officer of the. company) there was an express agreement that he should be paid two and one-half per cent, of the amount of the bonds on the completion of the work, but that the president and treasurer (who was Dr. Batt himself) were to determine the time when the work was in fact completed. Dr. Batt himself says, however, that he did complete the promotion of the company as far as possible. t

On this proof it is contended that Dr. Batt is entitled to the compensation which he says was agreed at the Camden ferry to be given him, i. a., two and one-half per cent, of the bonds of the company, which were in all $250,000, making his claim on this item to be $0,125, at par of the bonds.

If this claim should be adjudicated as it is thus presented it must be held invalid, because it is precisely within the objection sustained in this court, and in the court of errors and appeals, in Gardner v. Butler, 30 N. J. Eq. (3 Stew.) 702, where it is held that if directors are employed in the business of the company, and agree to pay themselves a stipulated sum, the agreement is void, and no recovery can be based upon such contract.

In the same' case it is held that for such services directors may recover upon the quantum meniit. But to support such a recovery there must be proof showing that the claimant was employed by the company to do certain work, that he did it, and ‘that he deserves to be paid therefor the sum which in the judgment should be awarded him. In this case every element of this proof is in such grave doubt and uncertainty that no conclusion can be formed in favor of the claim.

The result is that, notwithstanding the additional proofs, Dr. Batt’s claims must both be rejected.

The next appeal is that of Clarence M. Busch, a stockholder, bondholder and general creditor, from the receiver’s adjudication refusing to admit Mr. Busch’s claim to be the holder of $40,000 of the mortgage bonds of the company, which Mr. Busch claims were lawfully and rightfully delivered to him as collateral security for the payment of $25,000 advanced by him to the company.

The receiver finds that Mr. Busch did, between June and September 25th, 1902, pay for $25,000 worth of furniture for the defendant company; that he received bonds therefor to the amount of $25,000 on this account; that on September 25th, 1902, a resolution of the company was passed pledging to him $40,000 of the bonds of the company, and that $15,000 more bonds were thereafter delivered to him, making the $40,000 of bonds claimed to be held by him as collateral for his loan of $25,000 to the company; that at this date, September 25th, 1902, the defendant company was either actually insolvent or in contemplation i of insolvency.

The receiver determines that the resolution of September 25th, 1902, was (as to the $15,000 of bonds then or thereafter issued to Busch) an attempt of the directors, in contemplation of the insolvency of the company, to transfer its property to Mr. Busch, a fellow-director and president of the companjr, for the purpose of saving him from loss of the $25,000 which he had theretofore advanced.

The directors of any corporation which is unable to respond to its usual and ordinary pecuniary obligations are forbidden to transfer its property by the sixty-fourth section of the Corporation act. P. L. 1896 p. 298; National Bank v. Sprague, 21 N. J. Eq. (6 C. E. Gr.) 580; Skirm v. Eastern Rubber Co., 57 N. J. Eq. (12 Dick.) 179.

That this was the actual financial condition of the defendant company on and before September 25th, 1902, and that Mr. Busch, a director and its president, knew of its impending failure is shown by this very transaction. Mr. Busch’s own testimony shows this. He testified that so early as the middle of June, 1902, the company.had no money for furnishing the hotel; that the various furniture houses refused to allow it credit; that a meeting of the company’s directors was called, to which no director came but himself and Dr. Batt. Mr. Busch was obliged to take up several bills owing by the company, to pay which it had no funds. The company, though nominally capitalized at $250,000, and having then issued bonds of a face value of more than $200,000, had not sufficient money to buy furniture for its hotel, without which it could not do business. It kept noo bank account which would justify it in applying for a loan. Mr. Busch says: “It became a question of either getting the money from some source or shutting up the hotel for the summer, practically giving up the project.” He says he agreed to advance the $25,000 on the $40,000 of bonds and the proportion of stock which accompanied those bonds as collateral to the loan. Mr. Busch says he took the whole $40,000 of bonds in a lump, but he elsewhere testifies that after the first issue of $81,500 of bonds to the Clarence M. Busch Land Company as purchase prifce for the land, the rest of the bonds were delivered to him from time to time as he advanced the $25,000 in five different payments between August 29th and September 2d, 1902. Mr. Busch testifies that the company was not then insolvent, but the facts proven contradict his conclusion.

Dr. Batt, the secretary and also treasurer of the company during the period, testifies that Mr. Busch received these bonds from time to time in amounts corresponding to the payments made by him. This being the situation, it appears that on September 2d, 1902, the date of the last payment by Mr. Busch, he had advanced the whole $25,000 for the company and had received therefor $25,000 of its bonds.

On September 25th, 1902, the company appears for the first time to have taken formal corporate action on these advances which had theretofore been made by Mr. Busch. On the min utes of that day is a resolution which refers to the fact that Mr. Busch had advanced $35,000 from time to time to the company. It directed the officers of the company to make him a note for that amount, and to issue to him as collateral security its first mortgage bonds to the amount of $40/000, and also an additional mortgage of $35,000 for past and also further advances, &c. The resolution deals with the transaction as an original giving, on September 35th, 1903, of the whole $45,000 of first mortgage bonds as collateral security to Mr. Busch for the payment of the compamr’s antecedent and then existing debt to him. Nothing in the resolution indicates that there had been any preceding agreement on the part of the company by which .Mr. Busch was to advance $35,000, in consideration of which the company would give him $40,000 of bonds as collateral security. That phase of the case first appears on September 35th, 1903, by this resolution. Previous to that time Mr. Busch had actually received, without any. formal corporate act, $35,000 of the bonds as he from time to time paid out money for the company. The only effect of the resolution on the bonds was to get for Mr. Busch the $15,000 of bonds thereafter delivered to him in one batch. Dr. Batt says they were so delivered to him.

At and long before this time the company’s general inability to pay its debts as they came to be due was, as is above shown, plainly apparent to all its directors, one of whom was Mr. Busch.

There is no proof that the $15,000 of bonds were issued for any presently passing consideration. The weight of the evidence goes to show that there was no agreement made previous to Mr. Busch’s advances that he should have $40,000 in bonds as collateral. His own conduct in taking bonds only to the amount actually advanced indicates that there was no such agreement. Mr. Busch paid nothing for the $15,000 of bonds, but, foreseeing the probable failure of the enterprise, obtained the additional $15,000 of bonds to be given him to save him from loss on his previous advances, for which he had already received $35,000 in bonds.

The phrasing of the resolution of September 35th, 1903, seems to indicate that the whole $40,000 of bonds were to be thereafter issued to Mr. Buscli to secure his pre-existing claim against the companj', but the evidence aliunde proves that in fact the $25,000 of those bonds had been issued contemporaneously with the advances made, and not to secure a pre-existing debt.

The master on this item has, in my view, rightfully held that the first mortgage bonds, to the amount of $15,000, issued to Mr. Busch on and after September 25th, 1902, are null and void, because delivered in contemplation of the insolvency of the company to secure a pre-existing debt. Mr. Busch’s appeal on this point must be dismissed.

The next appeal is that taken by Mr. Busch as bondholder, ■stockholder and general creditor against the master’s admission of the claim of the DuParquet, Huot & Monense Company, as a mechanics’ lien claim against the hotel property, prior and- preferred to the lien of those first mortgage bonds which were issued to Mr. Busch to secure the payment of the $25,000 which he had expended for furniture for the hotel, and also prior to the $35,000 mortgage made by the company to Mr. Busch as additional security for that expenditure, and for future loans, &c.

The first objection to the admission of this claim is that the .articles furnished are not, under the statute, capable of being the subject of a mechanics’ lien.

The proof is that, under the orders of the company’s officers in charge of the construction of the hotel, this claimant, the DuParquet, Huot & Monetise Company, furnished a twelve-foot range, three fires, three ovens, built into the building by brick ■flues connecting with the chimneys, boiler and steam pipe coming through the floor and connecting with the boiler of the house, large hotel vegetable kettles connected with the steam pipes, a twenty-five-foot hood over these fixtures, also various other kitchen equipments which are fitted to the supply and waste pipes of the building.

This kitchen equipment was absolutely essential to the use of the hotel for the purposes for which it was built. Without it ■there would have been no hotel. The range, ovens, boilers and pipes, &c.,‘ were attached to the building in a manner indicating "their absolute appropriations to that use. They were so attached in accordance with the intention of the owner of the building and the party who furnished them that they should permanently become part and parcel of the hotel structure itself. The decision of the supreme court in the case of Erdman v. Moore, 58 N. J. Law (29 Vr.) 445, determines that such fixtures, so attached and intended to be part of the building, may be the subject of a mechanics’ lien. The receiver has admitted to the lien only those articles which were attached to the building as above indicated, and has excluded movable and detached utensils.

It is also contended that this kitchen equipment was not ordered by competent authority from the company. This contention is refuted by the proofs, which show that the detail of the work was arranged and ordered by Dr. Batt, the secretary and one of the executive officers of the company in charge of the building, and that Mr. Busch, the president of the company, was in almost daily attendance there while these fixtures were being installed, and finally they appear to have been accepted and used by the company when it started in business in the following July. It is true that no formal resolution of the board of directors appears on the company’s minutes expressly making and authorizing this particular contract. It also appears by its minutes that there was no meeting of the company’s directors after tire first one until long after the whole furnished building had been erected, accepted and in actual use by the company. No formal action of the board was necessary to obligate the company where it conclusively appears that its authorized offi-. cers acted, and that the work thus induced was accepted by the company.

It is also contended by Mr. Busch, as bondholder, that the receiver erred in holding this lien claim to be prior to those of the first mortgage bonds which were turned over to Mr. Busch as security for moneys paid by him for the company, and to the mortgage for $35,000, also given him, under the resolution of September 25th, 1902, as securitjr, &c.

Mr. Busch insists that the receiver’s above-named adjudication is contrary to the rule laid down in Central Trust Co. v. Continental Iron Works, 51 N. J. Eq. (6 Dick.) 605, where it was held that although the owner commenced the building before the mortgage bonds were issued, yet the holders of the bonds had a lien relating to the time when the mortgage was recorded, which was prior to the commencement of the building.

If that case is carefully read it will be found that the transaction was a mortgage, expressed on its face, to secure future advances, and that it was given priority because in that case neither the trustee nor the bondholders had actual notice of the subsequent encumbrances (at p. 608). But in the case at bar, Mr. Busch, who became the bondholder in the latter part of August and first of September, 1902, had full notice long before of the outstanding unpaid debt of the company for the kitchen fixtures which under the statute constituted the lien, and having this knowledge and warning, he took his first mortgage bonds and his $35,000 mortgage, not by purchase in open market, with the equities that might thus attach, but direct from the company, by private bargain, to secure advances which he made to the company, not only after the liens had attached, and after he knew the facts, but also after he knew that the company was insolvent and that the lienholders would be compelled to look to the enforcement of their liens to collect their debts.

Considering this objection from the point of view of Mr. Busch, as a mortgage bondholder, the receiver’s adjudication was correct. But even if the receiver were wrong in this particular, his mistake would only apply to those bonds which Mr. Busch received for a presently passing consideration, because the transfer of the $15,000 of first mortgage bonds and the giving of his $35,000 mortgage, both of which he took to secure the debt previously owing him by the company, are null and void, as above shown, under the statute, because taken in contemplation of the company’s insolvency.

It will be found (as an additional support of the receiver holding that this lien claim should precede Mr. Busch’s $40,000 of first mortgage bouds and his $35,000 mortgage) that the mechanics’ lien statute, as re-enacted in the revision of the Mechanics’ Lien law of 1898 (P. L. M9S p. 543 § 15), has somewhat changed the law since the case of Central Trust Co. v. Continental Iron Works, ubi supra, was decided in 1893.

By section 28 (P. L. 1898 p. 550) it is provided that the sale under the lien claim judgment shall pass title subject to any mortgage given under the circumstances contemplated by and in conformity with the provisions of section 15 of that act. Section 15 provides that any mortgage recorded before a lien claim is filed shall have priority to the extent of the money actually advanced-and paid by the mortgagee and applied to the erection of any new building on the mortgaged premises. The test is whether the mortgage-money has been loaned for and actually applied'to the erection, &c., of the building. Young v. Haight, 69 N. J. Law (40 Vr.) 453 (Supreme Court).

In the case at bar it is not even claimed that any of Mr. Busch’s money which is secured to be paid by the $40,000 of first mortgage bonds, and by his $35,000 mortgage, was applied to the erection of the hotel building. The undisputed proof is that all of it was spent by Mr. Busch himself in the purchase of furniture for that hotel.

The receiver’s admission of the DuParquet, Iluot & Monense Company’s claim as a lien prior to Mr. Busch’s $40,000 first mortgage bonds and to his $35,000 mortgage should be sustained and the appeal dismissed.

The only remaining appeal is that of Mr. Busch against the receiver’s admission to a dividend of that part of the claim of Milligan & Webber which is based on their furnishing of working plans and drawings for the hotel building.

There were two items in their claim, one ($3,125) for plans and drawings, the other for $2,500 of bonds and half as much stock for securing sub-contractors for the work, &c. The receiver allows the first, and from this allowance Mr. Busch appeals. The receiver refuses to allow the last, and from this decision Milligan & Webber have not appealed._

The testimony in the cause shows that the plans and drawings of Milligan & Webber were competently ordered, and were accepted and used in building the hotel, and that the price charged was the ordinary price for such services.

The receiver’s adjudication should be sustained and the appeal dismissed.

I will advise an order according to the views above expressed.


author: G-key, Y. C.

text:
    Thomas Daley v. Somers Lumber Company et al.
    [Decided August 22d, 1905.]
    Where a building- contract, duly filed in the county clerk’s office, provided for final payment on certificate of the architect, the owner is liable to parties furnishing l^bor and materials, who served notice prior to the issuance of the final certificate, to the full amount of their claims, not exceeding the full amount of such final payment.
    On bill of interpleader, answer and proofs.
    The complainant, the owner of a lot of land at the northwest corner of Baltic and Kentucky avenues, in Atlantic City, contracted with one Erank Muth that he (Muth) should furnish all the labor and materials for the erection and construction of a building described in a written contract and specifications.
    The contract in the clause which deals with the contractor’s right to payment in various contingencies declares that “the architect shall audit and issue a certificate, which shall be conclusive upon the parties, unless decided by arbitration,” &c. ■
    The total price was agreed to be $9,384, payable as follows: Eirst payment, $1,000, when first-floor joists are set; second payment, $2,000, when roof is slated; third payment, $1,000, when house is lathed; “last payment of $5,384, upon architect’s certificate.”

      The contract is dated September 23d, 1902, and, with its accompanying drawings and specifications, was filed in. Atlantic county clerk’s office on September 24th, 1902.
    The complainant alleges that the building was commenced shortly after April 24th, 1902, and was completed April 24th, 1903; that he advanced to contractor Muth, on certificates of the architect, as follows:
    On. December 1st, 1902 ..................... $1,000 00
    On December 18th, 1902 .................... 2,000 00
    On January 7th, 1903 ...................... 1,000 00
    On January 8th, 1903 ...................... 1,000 00
    On February 4th, 1903 ..................... 2,000 00
    On March 24th, 1903 ....................... 1,500 00
    Total ............................... $8,500 00
    The architect, under date of July 14th, 1903, certified that the building was completed on or before April 21st, 1903.
    The complainant alleges that Muth, the contractor, was therefore on April 21st, 1903, entitled to the balance due on tire completion of the contract as well as to all preceding installments of the contract price; that he, the complainant, has in his hands of the contract price $884, less any credit to which the complainant may be entitled by reason of Contractor Muth’s delay in finishing the building. This the complainant claims he is entitled to at the rate of $500 per day’s delay, as provided for in the contract.
    On December 24th, 1902, Daniel B. Ingersoll served on the complainant a stop notice, under the third section of the Mechanics’ Lien act, claiming $381 for materials, &c.
    On May 2Gth, 1903, Somers Lumber Company served such a stop notice, claiming $2,307.44 for labor performed and materials furnished, &c.
    On August 20th, 1903, Michael IT. Towbey served such a stop notice for $245.60.
    The complainant further alleges that on January 8th, 1904, he served upon Contractor Muth written notice of these claims, and also, on January 12th, 1904, upon Muth’s trustee in bankruptcy, who had then been appointed, &c.

      The Somers Lumber Company commenced suit in Atlantic circuit court to recover the sum named in its stop notice.
    Daniel B. Ingersoll demanded payment of his claim, and threatened suit.
    The complainant avers that he does not collude with any of the said claimants, and that he is not indemnified by any of them, &e.
    He prays that they may be restrained from suing him at law, and may be decreed to interplead and settle their right to the said sum of money, &c.
    The Somers Lumber Company is the only defendant which files a litigating answer. That company's answer denies that the building in question was completed on the 21st day of April, 1903, and avers that it was not completed until some time in July of that year. It denies that the balance in the hands of the complainant is $884; avers that the complainant made a number of payments before the building was completed, and before the architect had certified that it was completed, according to the terms of the contract; that the sum so paid in advance of said certificate and said completion was in excess of $3,000, and that in fact and in law there is in complainant's hands over $5,000.
    The cause was heard on these pleadings.

      Mr. Charles C. Babcock, for the complainant.

      Mr. Clarence L. Cole, for Somers Lumber Company, defendant.
   G-key, Y. C.

The phase of this case now under consideration presents only one question, and that is whether the complainant has shown himself to be entitled to a decree against the defendants which will compel them to interplead with each other to fix their claims upon the sum of $884, which the complainant alleges is all that remains in his hands of the contract price agreed to be paid for the construction of the building.

This is the bone of contention, the defendants insisting that the complainant has no right to compel them to interplead, because the sum he tenders, $884, is not the full portion of the contract price which is lawfully applicable to the payment of the stop-noticing claimants.

The complainant’s Exhibit 0 'ffl is a notice from him to Muth, the contractor,'of the stop notices which had been served on him (Daley). In this exhibit of the complainant he gives a list of those stop notices as follows:

“D. B. Ingersoll (material), notice served December
24th, 1902 ................*.................. $381 10
Somers Lumber Company (labor and materials),
notice served May 26th, 1903 .................. 2,307 44
Harry Madara (materials), notice served July 28th,
1903 ........................................ 53 50
W. H. Towbey (labor and materials), notice served August 20th, Ü903 ........................... • 245 60"

The contract on file prescribes the last payment of $5,384 shall be made upon the architect’s certificate. The complainant concedes that his advances to the contractor intrude upon this last payment of the contract price, and that they yere made without any architect’s certificate coincidentally or precedently given. In short, it is admitted that the complainant has paid $4,500 (part of the last payment of $5,384) without any architect’s certificate whatever.

The complainant’s contention is that he' was authorized to make these advances because when he made them the building was in truth completed, although the architect had not-yet certified to the fact; that he did certify to it several months after the payments had been made, and after the contesting defendants had served their stop notices upon the complainant.

The contract did not authorize the last payment to be made when the building was in fact completed. It expressly declared that the last payment of $5,384 was to be made upon the architect’s certificate. There is a mention, in clause 4 of the contract, of payment when the building is completed, but that reference has nothing to do with the" fixing of a time for payment of the several installments of the contract price. This provision in clause 4 follows a prescription of the mode in which neglect or suspension of work on the part of the contractor may be rectified by employment of other parties to do it in his place, the expense so to be deducted from the contract price. Then the contract declares:

“In such an event the payments herein agreed upon shall not be due until the entire work shall be completed. Any balance due the contractor when the work is completed shall be paid to the contractor by the owner,1’ &c.

• This provision is not intended to fix a time when the last payment shall become due. That is fixed in definite terms in the fifth clause of the contract. All that is done by the quoted fourth clause is to provide a protection to the owner by which, if the contractor fails to perform, the owner may retain all payments until the work is completed.

The fifth section of the Mechanics’ Lien act prohibits payments by the owner in advance of the terms of the filed contract. In Slingerland v. Binns, 56 N. J. Eq. (11 Dick.) 413, the court of errors and appeals declared that under this section the owner shall not in any way discharge his liability to pay under the contract, until according to the terms of the contract, the time to do so has arrived, in order that until that time such liability may be preserved for the benefit of workmen and materialmen who serve the statutory notices.

The complainant does not deny that he made advances without the certificate of the architect, which the contract required, but seeks to excuse them on the ground that an unreasonable or fraudulent refusal by the architect to certify might subject the contractor to great loss and the owner to delay and embarrassment. These are in this case purefy hypothetical questions. There is no proof that the conduct of the architect was either unreasonable or fraudulent regarding the issuing of his certificate to justify the last payment of $5,384. If the owner was of opinion that the requirement of the architect’s certificate might subject him to trouble, he might readily have protected himself bv so framing his contract that the last installment of the contract price should be payable when the building should be completed, without the provision for the architect’s certificate. He did not do this. By the express terms of the filed contract, the last installment of the contract price, $5,384, was to be paid on the architect’s certificate. Under section 5 of the statute, and the decision of Slingerland v. Binns, ubi supra, the parties furnishing labor and materials had a right to presume that the last payment would be made only when the architect’s certificate had been given, as prescribed by the filed contract.

What happened ivas that on December 24th, 1902, the de-’ feudant Ingersoll served a stop notice on the complainant. The latter has since paid $5,500 of the contract price without paying Ingersoll. On May 26th, 1903, no architect’s certificate had been given in relation to the last payment. On that day the Somers Lumber Company served its stop notice. Under the contract on file, and the law as declared in the above-cited case, this should have impounded, and did impound, the whole of the last payment of $5,384 for the payment of the claims of the noticing creditors. It makes no difference that the complainant, after the serving of the stop notice, and after he had made the advances to the contractor, obtained the architect’s certificate. The rights of the parties were fixed as of the time of serving the stop notice on May 26th, 1903. The complainant-owner had at that time wrongfully paid out $4,500 on account of the last payment of $5,384, without having any architect’s certificate to justify those payments, as required by the filed contract. The architect could not lawfully, in July, 1903, give a certificate of the completion of the building to relate back to the preceding April (’as he tried to do), and thus wipe out the Somers Lumber Company’s lien on the fund.

The case at bar is, in my view, controlled by the decision in Slingerland v. Binns, ubi supra.

The complainant has in his hands, or under the law, as declared in that case, is responsible, not for $884, as he claims in his bill, but in truth for the wdiole of the last payment, amounting to $5,384. This sum is more than sufficient to satisfy in Ml all the claims of the stop-noticing defendants. There are therefore no conflicting claims which might require that the complainant be protected from double liability by an inter-pleader decree. He has, in contemplation of the law, enough of the contract price in hand to satisfy all the defendants’ claims upon it. Hnder this condition of affairs he has no standing to maintain an interpleader bill against them.

The complainant’s bill should be dismissed, with costs.