author: Gruy, V. C.

text:
    John W. Dunham v. William M. Cramer et al.
    [Filed April 11th, 1902.]
    1. A chattel mortgage which includes household goods will not be declared to be void under the act of March 17th, 1893 (Gen. Stat. p. 2111 § lyl), solely because the wife of the mortgagor did not sign it. To raise this point, all the elements of avoidance named in that statute must affirmatively appear. It must be shown that the mortgage was not given to secure the payment of the purchase-money of the goods mortgaged, and that the household goods included in the mortgage were in the use and possession of a family in this state.
    2. The affidavit of consideration annexed to a chattel mortgage must, on its face, or by reference to the annexed mortgage, show how the relation of creditor and debtor arose between the mortgagee and the mortgagor.
    3. A chattel mortgage, in order to be valid under the terms of the Chattel Mortgage act, must be recorded as soon after -its delivery as may be by reasonable d.ispatch under the circumstances of the ease.
    4. A chattel mortgage which does not comply with the provisions of the Chattel Mortgage act is void as against the creditors of the mortgagor, irrespective of the existence of bad faith or intention to defraud in the taking of the mortgage.
    5. The statutory requirements not only extend and apply to every instrument which is in terms a mortgage, but also to every conveyance, however expressed, which is intended to operate as a mortgage.
    On bill, answer, replication and stipulation as to facts.

      The complainant, John W. Dunham, recovered and entered a judgment against the defendant William M. Cramer, which he caused to be docketed in the court of common pleas of Cape May county, and afterwards in the supreme court of this state, on the 16th day of May, 1900, for the- sum of debt and costs, amounting to $131.68. He caused execution thereon to be issued to the county of Cape May on March 25th, 1901, upon which certain household goods, hotel goods, furniture, stock, fixtures and cigars were levied upon by the sheriff of Cape May county, and the execution returned.
    The complainant thereupon filed the bill of complaint in this cause, charging that the defendant William M. Cramer, on July 8th, 1898, after the debt on which his judgment is founded had accrued and had become due and payable, in order to secure his property for his own use, and to protect it from the claim of the complainant, and to hinder the complainant from collecting his debt, fraudulently made a paper purporting to be a chattel mortgage to his brother, Lewis W. Cramer, expressed to be upon the consideration of $1, and a further consideration that the mortgagor, William M. Cramer, should pay the mortgagee, Lewis W. Cramer, a certain promissory note for $800, dated July 8th, 1898, which pretended chattel mortgage the bill of complaint charges is claimed to be a lien upon the same goods and chattels which he has so as aforesaid levied upon under his said judgment and execution, and that this claim has so prevented complainant that he has been unable to realize anything on his said execution and levy.
    The complainant charges that the said pretended chattel mortgage was not given to secure any good, valid or subsisting debt owing by said William M. Cramer to said Lewis W. Cramer, and that, at the time of its execution, the said William M. Cramer was a married man, and that his wife did not join in its execution, as under the statute in such case made and provided she should have done; that the alleged chattel mortgage was not accompanied by a delivery or change of possession of the goods mortgaged; that it has not annexed to it, nor is it accompanied by, any affidavit made by the holder thereof, his agent or attorney, stating the consideration of the said mortgage, or the amount due or to grow due thereon, and that said defendant’s chattel mortgage was not recorded in 'the manner required by law. The complainant further charges that the said chattel mortgage is, as to him, the said complainant (a creditor of said William M. Oramer, the alleged chattel mortgagor)/fraudulent, void and of no effect.
    The complainant prays that defendants William M, Cramer and Lewis W. Cramer, or one of them, may be decreed to pay the amount due on his judgment and execution; that the alleged •chattel mortgage may be declared to be null and void, and that the goods and chattels named therein may be sold, discharged of the same, under the complainant’s said writ of execution, and may be applied in satisfaction of complainant’s debt.
    The original bill of complaint makes defendants William M. Cramer, the chattel mortgagor, and Lewis W. Cramer, the chattel mortgagee.
    Shortly after the filing of the original bill of complaint, and before answer filed, the complainant filed a supplemental bill, reciting that, on the 38th day of March, 1901, the defendant Wiliam M. Cramer was the owner of a building, located on posts, in the town of Woodbine, in Cape May county, and valued at $300, and also of a stock of spirituous and malt liquors contained therein and valued at $400; that on the 1st. day of May, 1901, the complainant issued a writ of fieri facias on his said judgment to the sheriff of the county of Cape May, directing him to levy upon the goods, Sac., of the said William M. Cramer in his county, under which the sheriff did so levy upon the said frame building and stock of liquors, and returned his said writ of execution. The complainant alleges that he has been unable to realize anything by sale under this additional levy, because the defendant William M. Cramer had executed a paper, purporting to be a bill •of sale, conveying the frame building aforesaid to his brother, Lewis W. Cramer, and by a certain paper-writing, purporting to be a bill of sale, conveyed the stock of liquors aforesaid to some persons purporting to be W. C. McDonnell Sa Company.
    These bills of sale the complainant charges to be, as against him, fraudulent and void, and to have been made with the purpose and intent to protect the maker thereof, the defendant William M. Cramer, in the enjoyment of his property, and to hinder the complainant from the collection of his debt. He further charges that the bills of sale were not accompanied by any delivery or change of possession, and that they are fraudulent and void as against the complainant’s judgment debt. The complainant prays that he may have the same relief against the said Lewis W. Cramer' and W. C. McDonnell & Company as if the matters recited in the supplemental bill had been aptly alleged and set forth in his said original bill.
    The defendants William M. Cramer and Lewis W. Cramer join in their defence. Their joint answer admits the entry and docketing of the complainant’s judgment. It alleges that the defendant William M. Cramer was indebted to the defendant Lewis W. Cramer in the sum of $800, and gave to him a promissory note therefor, and that to secure the payment of said note the defendant William Cramer made and executed a mortgage on goods and chattels to the defendant Lewis W. Cramer. They deny that the chattel mortgage in question was given to hinder or defraud the complainant in the collection of his debt, and insist that the note and chattel mortgage are bona fide, and that the sum of $800'is still due and unpaid thereon.
    The defendants admit that the defendant William M. Cramer is a married man, and that his wife did not sign the chattel mortgage. They admit that any interest she might have in the goods mortgaged did not pass, but they insist that the title of William M. Cramer in the said goods did pass. They admit that the possession of the goods since the making of the chattel mortgage has remained in the chattel mortgagor. They deny that the chattel mortgage does not have any affidavit, made by the holder thereof, stating the consideration. On the contrary, they charge that said chattel mortgage was properly executed, together with an affidavit of consideration of the amount due and to grow due thereon, and that it was recorded in the clerk’s office of Cape May county, in Book No. 7 of Chattel Mortgages, folio 318.
    A decree pro confesso has been taken against the defendant McDonnell. The cause has come to a hearing on the issues joined' between the other parties. Their solicitors have made and filed the following stipulation as to the facts:

      “It is agreed by and between I. O. Acton, of counsel with the complainant, and J. E. P. Abbott, of counsel with the defendants William M. Cramer and Lewis W. Cramer, that the above-entitled cause is to be submitted on briefs, on the following agreed state of facts:
    “(1) That the question of the good faith of the transactions between William Cramer and Lewis W. Cramer, and the good faith of the transactions between William Cramer and W. C. McDonnell & Co., referred to in the bill of complaint and the amendment thereto, be passed.
    “(2) That the judgment recovered May 7th, 1900, and afterwards docketed in the New Jersey supreme court by John W. Dunham v. William Cramer, referred to in the bill of complaint, was founded upon a book-account for goods, wares and merchandise sold and delivered by John W. Dunham to William Cramer, between September 4th, 1896, and March 18th, 1898, and is still unpaid, due and owing by William Cramer to said John W. Dunham.
    “ (3) That WTlliam Cramer has had possession of the goods, chattels and property mentioned in and covered by the chattel mortgage and the bills of sale mentioned and set out in the bill of complaint, and the amendment thereto, from the respective dates thereof up to the present time.
    “(4) That, the bills of sale referred to in the amended bill of complaint were given for the purpose of security and were in the nature of mortgages.
    “(5) That in the absence of originals, certified copies of all papers referred to in the pleadings can be used as evidence, and are to be submitted to the court.
    “(C) In the taxation of costs, witness fees shall be allowed the same as if the trial were had.
    “I. O. Acton,

      “Of-Counsel with Complainant.

    “J. E. P. Abbott,

      “Of Counsel with Defendant.”

    The cause was thereupon argued upon briefs submitted.

      Mr. Isaac 0. Acton, for the complainant. '

      Mr. Qharles T. Abbott and Mr. Joseph E. P. Abbott, for the defendants William M. and Lewis W. Cramer.
   Gruy, V. C.

The defendant’s chattel mortgage is first challenged because the act of March 7th, 1893 {Gen. Siat. p. Sill § II), declares that every mortgage upon household goods in the use and possession of any family in this state, not given to secure the purchase-money for such goods, shall be void unless signed, sealed, executed and acknowledged by the husband and wife of the family, &c., and the complainant contends that the fact that the mortgagor’s wife has not signed the chattel mortgage makes it void under 'that statute.

The terms of the act require more than this to make a chattel mortgage void. It must appear that the household goods included in the mortgage were in the use and possession of a family in this state.

All that here appears is that the mortgagor had them in his possession in his hotel. He may have had no family in this state, or if he had, they may not have had these household goods in use. He may'have them in the hotel, they may live elsewhere. There is no proof that it is not a purchase-money mortgage. All these must affirmatively appear in order to even claim the enforcement of a penal statute. It is doubtful whether, if such proof were exhibited, such a chattel mortgage would in equity be held to be void any further than to prevent its being considered a lien on the household goods. Green v. McCrane, 10 Dick. Ch. Rep. 440. For failure of proof the mortgage cannot be declared void to any extent on the first ground.

The complainant also disputes the validity of the chattel mortgage because, he insists, that the affidavit of consideration does not comply with the requirements of the Chattel Mortgage act.

The statute requires that there shall be annexed to the chattel mortgage the affidavit of the holder, stating the consideration of the mortgage and, as nearly as possible, the amount due and to grow due thereon. The affidavit in this case is made by the mortgagee, and states

“that the true consideration of said mortgage is as follows, viz.: For the payment of a certain promissory note dated July 8th, 1898, for the sum of eight hundred dollars, this chattel mortgage given as collateral security for the payment of the above note, and there is due on said mortgage the sum of eight hundred dollars, besides lawful interest from the eighth day of July, 1898.”

In the case of Fletcher v. Bonnet, 6 Dick. Ch. Rep. 615, the court of appeals declared that, in construing affidavits of consideration annexed to chattel mortgages, if the affidavit refers to the annexed chattel mortgage, the affidavit and the mortgage must be read together, to ascertain whether there is a sufficient compliance with the terms of the statute. An examination of the chattel mortgage to which this affidavit is annexed affords no aid to the deficiencies of the affidavit, for the chattel mortgage recitals make less disclosure of the transaction than does the affidavit itself. Nothing in this affidavit shows whose promissory note is secured by the chattel mortgage in question, nor who is the holder of that promissory note, nor for what consideration, whether a loan of money, or a sale of goods, or how otherwise the promissory note or chattel mortgage came to be given, nor how the debt was created to secure which the chattel mortgage was made. An affidavit so markedly deficient in the statement of the transaction out of which the mortgage arose affords no opportunity to inquiring creditors of the mortgagor to ascertain whether the chattel mortgage is given for a valuable consideration, which would be binding upon them, or for a merely voluntary one, which would not be obligatory upon them. It was settled in the ease of Graham Button Co. v. Spielmann, 5 Dick. Ch. Rep. 122, 123, that the affidavit of consideration annexed to a chattel mortgage must substantially show how the relation of creditor and debtor between the mortgagor and the mortgagee was created. This case was carried to the court of appeals (sub nom. Spielmann v. Knowles, 5 Dick. Ch. Rep. 796), and was there unanimously affirmed for the reasons given in this court. The interpretation there given of the statutory requirement that the affidavit of the holder shall state the consideration of the mortgage condemns the affidavit now under consideration as insufficient.

This chattel mortgage of the defendant is also challenged because it was not recorded for over four weeks after it had been made and delivered. The mortgage is dated the 8th day of July, 1898. The affidavit of consideration and the acknowledgment bear the same date. The certificate of the clerk of Cape May shows that it was recorded on the 10th day of August, 1898. Nothing in the case in any way explains this delay in the recording of the mortgage. Its effect was to enable the mortgagor to appear to his creditors and those dealing with him to own the chattels mortgaged, without lien upon them. This might readily operate as a fraud upon creditors, but irrespective of this possibility, or of the actual fact as to this incident, the statute has been interpreted to declare a mortgage so reserved from the record for that cause void. -There must be, under the terms of the act, an immediate taking of possession of the chattels mortgaged, or there must be an immediate recording of the mortgage. Either course, when taken, is a warning to creditors who may thereafter deal'with tire mortgagor. If neither be observed, the chattel mortgage is void as to creditors. Roe v. Meding, 8 Dick. Ch. Rep. 368. When a chattel mortgage is kept oft the record for more than four weeks after it is made and delivered, and nothing appears which explains so long a delay, it cannot be said that its recording is immediate.

The stipulation of the parties provides that the question of good faith of the transactions attacked by the bill and amendment shall be passed. This agreement does not waive the noncompliance with the terms of the statute regarding chattel mortgages. If the provisions of that act are not obsérved, the chattel mortgage is, for that reason, void as against creditors, irrespective of bad faith or of any intention to defraud. Graham Button Co. v. Spielmann, 5 Dick. Ch. Rep. 128; affirmed on appeal, Id. 796.

The complainant also attacks the validity of the bills of sale, because they appear, to be, in legal effect, chattel mortgages, and do not comply with' the requirement of the Chattel Mortgage act.

The stipulation admits that these bills of sale were given by way of security, and that they were in the nature of mortgages.

Certified copies of them are produced. They are, apparently, bills of absolute sale of the bottling-house tó the defendant Lewis W. Cramer and of the stock of liquor therein to the defendant trading as William C. McDonnell & Company. They are each acknowledged by the defendant William M. Cramer, and have both been recorded. Neither has annexed any affidavit of consideration by the holder. They are admitted to be chattel mortgages, and, by the express terms of the Chattel Mortgage act, are void as against the, creditors of the maker, because neither has annexed to it the affidavit óf the holder stating the consideration of the mortgage. The statutory requirements extend, not only to every instrument which is in terms a mortgage, but also to every “convéyance intended to operate as a mortgage,” &c. Chattel Mortgage act, Gen. Stat. p. 2118 § 62.

I will advise a decree that the chattel mortgage and the two bills of sale mentioned in the pleadings are void as against the complainant’s judgment, execution, and levy. The complainant is entitled to costs.


source: Caselaw Access Project

author: Grey, Y. C.

license: Public Domain

text:
    Samuel D. Lodge, administrator of Rachel R. Hulings, v. Elmer J. Hulings, executor, &c., et al.
    [Filed April 16th, 1902.]
    1. An agreement between a holder of notes and the heirs of the deceased maker (grandsons of the holder) that the heirs would pay interest on the principal during the life of the holder, in consideration that. the holder would surrender her claim to the principal and deliver the notes to the heirs to be destroyed, is founded on both a valuable and a good consideration, and is binding on the holder’s administrator when fully executed on the part of the holder by the delivery and destruction of the notes.
    2. In a suit by an administrator to reinstate and re-establish notes held by his intestate (which had been surrendered and destroyed pursuant to such an agreement), on the ground that the agreement was void for want of mental capacity of the holder, evidence considered and held to show that the holder was mentally competent to make the agreement.
    3. In the suit by the'administrator to reinstate and re-establish the destroyed notes formerly held by his intestate, but surrendered and destroyed by her direction pursuant to such an agreement, it appeared that for about two years before the making of the agreement one of the grandsons and the' holder had lived in the same house, but in separate apartments. The holder of the notes had her own household and servant, and managed her own housekeeping separate and apart from that of the grandson. Another grandson lived a few hundred yards away. They were on friendly terms. The holder of the notes was badly crippled, and in feeble physical health, but there was nothing to show that she depended upon the grandsons for advice or service.—Held, the evidence does not establish that a confidential relation existed between her and the grandsons, so as to call upon the latter to show affirmatively that no undue influence was exercised to procure the agreement for the surrender and destruction of the notes.
    4. The evidence in this case considered and held to be insufficient to show that at the time she delivered the notes to be destroyed the holder was either mentally incapable, or that she was acting under undue influence.
    Oil bill, answer and proofs.

      Mr. Austin II. Swaclchamer, for tlie complainant.

      Mr. Joseph J. Summerill, for the-defendants.
   Grey, Y. C.

(orally).

The bill in this ease is filed by Samuel D. Lodge, as administrator with the will annexed of Eachel E. Hulings, against Elmer J. Hulings and John T. Ogden, executors of the last will and testament of Paschal L. Hulings, deceased, and against Andrew B. Hulings and Elmer J. Hulings apparently in their individual capacity. The bill sets out copies of two several promissory notes each executed by Paschal M. Hulings, and each promising to pay Eachel E. Hulings the sum of $600 with interest. The notes were both made in the year 1892—the particular dates are of no significance. Paschal M. Hulings was the only 'son of Eachel E. Hulings. She is proven to have had several other children who were daughters. The substantial allegations of the bill are that Andrew B. Hulings and Elmer J. Hulings, the sons of Paschal, wrongfully obtained the possession of the two notes and destroyed them, and on various occasions, narrated in the bill, suppressed and concealed the fact that they had so destroyed them. The bill prays that the notes may be reinstated and re-established, and declared to be existing and valid obligations, and to be payable out of the estate of Paschal M. Hulings, or out of a portion of the estate of Eachel E. Hulings, his mother, which is in terms bequeathed to him, but which, by operation of the statute, has become payable to his descendants because he has predeceased his mother.

The answer of the defendants denies the alleged suppression and concealment of the receipts of these notes by Elmer B. and Andrew J. Hulings, and gives a narrative account of the mode in which the notes came into their possession. They allege that their grandmother, Mrs. Eachel E. Hulings, actually delivered the notes to them with instructions to destroy them; that eoincidently with the delivery by her to them of the notes, they had undertaken to pay to her interest on the amount due on the notes during her life (by a written contract which is here produced in court), executed in the office of William Carter, a scrivener, in the presence of himself and his assistants, and they say that that is the explanation of the way in which the notes came into their possession. They deny the right of the complainant to any relief such as is prayed for in the bill. The bill and answer contain several other allegations which do not touch upon the real question in dispute, which is the charge that the defendants wrongfully obtained the notes from Mrs. Hillings and destroyed them, and the prayer of her representative that those notes may be re-established and be given the same force and position for payment, as if they had remained in her' possession at the time of her death. The charge of wrong-doing and the right to relief therefor are vigorously denied by defendants.

The complainant suggests a doubt whether Mrs. Hillings, on January 17th, 1895, was present at the office of her agent, Mr. Reeves, and subsequently on the same day at that of Mr. Carter, the scrivener, and whether she participated in the agreement set forth in the answer and here produced, by which the defendants undertook to pay to her interest during her life on $1,200, the amount of the two notes. There is no evidence on which to hinge such a doubt. The proof is affirmative on the part of Mr.' Carter’s assistant, who drew the agreement, that she was there. Mr. Carter’s own testimony is not quite so positive, but casts no doubt upon the point. That of Elmer J. Hillings is clear and definite to show she was there. Mrs. Haines heard her say she wanted to go to Woodbury and that she went there as stated by Elmer. Mrs. Haines tells of her coming back and heard her express her satisfaction that the business was settled.

It is satisfactorily shown that Mrs. Hillings did, in fact, attend as stated, when the written agreement set forth in the answer was executed by Elmer and Andrew. The weight of the testimony also shows that coineidently with the delivery to her of the written agreement of Elmer and Andrew to pay her interest on the $1,200 during her life,, she gave to them the two notes of $600 each and told them to destroy them, which they did.

This agreement was a personal undertaking by Andrew and Elmer Hulings, that in consideration that Mrs. Hulings, their grandmother, gave up her claim to the principal of the two notes, they would pay her interest on that principal sum during her life. The transaction was in form a contract, but was undoubtedly induced in part by the love and affection which the old lady had for PaschaFs boys'. She had both a valuable and a “love and affection” consideration for concluding the business.

Having been fully executed by Mrs. Hulings in her lifetime, by her delivery of the notes, with directions to destroy them, followed by their destruction in accordance with her orders, it was a concluded transaction binding upon her administrator, if she had capacity to act and did act therein of her own free will.

On this point the complainant places the strain of his attack upon the transaction in question. He insists—first, that Mrs. Hulings was, in January, 1895, mentally incapacitated to make either a contract or a gift, and secondly, that she was induced to make this particular agreement by the exercise of an undue influence over her by her two grandsons, Elmer and Andrew, the defendants in this cause.

This claim involves an inquiry into the history of this old lady previous to and at the date of January, 1895. It appears that at the last-named date she was some seventy-odd years old— the exact age I do not think was stated. In 1818 she had suffered a paralytic stroke, which affected her left side, and subsequently to that time she had fallen down and had broken her left ankle, from which she was permanently lame in her left leg. She had also broken her left wrist, which had become stiffened, so that, while she could raise her hand to her head, she could not bend her arm at the wrist. All the testimony in the case shows that she was an illiterate woman. She could read print and she knew how to write her name in an imperfect way, but nothing more. If she could read writing at all, it was very uncertainly. So much so, that she was not willing to depend upon her own reading of a manuscript. She was never known to write anything but her name.

Testimony has been offered proving that she called upon other persons to do her writing for her, and this, it is contended, was because she was incapable of conducting business herself. The evidence does not tend to support this claim. What has been shown is, that whenever the business which Mrs. Hulings had in hand was of such a nature that it required written papers to be drawn, such as notes, receipts and the like, which she was unable to write, she called in her son-in-law, Mr. Ogden, or his daughter, or her man. of business, Mr. Reeves, to'prepare the papers. But all the evidence as to these incidents shows that each of these parties acted simply as her amanuensis, preparing the written evidence of the transaction for her to sign. It plainly appears that the transactions themselves were initiated, conducted and determined by her, and that the party who did the writing simply obeyed her directions.

The most important transactions carried on by a person situated as Mrs. Hulings was, not engaged in any active business, are the spending of money for the usual and ordinary matters of daily life. These involve the frequent purchase of food for the household, clothing for herself, and all the many incidental expenditures which attend upon housekeeping. There is evidence proving, without denial by anybody, that this old lady, prior to and during the year 1895 (in the January of which she made the challenged agreement and surrendered the notes), conducted her own household and herself managed its daily business. She lived in one part of a house, in which she had a life estate, which she had arranged in such a manner that she could have her own'private apartments. Her grandson Andrew B. Hulings lived in the other part. She evidently and naturally had an affectionate regard for him, but she did not live in any position of dependency. She had a servant of her own. She kept and managed her own household, bought her own store goods, paid her own store bills. Occasional^, when she went to Philadelphia, or elsewhere away from her home, she took someone with her, not to transact her business, for she evidently had her own individual views about that, but to aid and protect her because of her lameness and physical infirmities. All the hundreds of little transactions which attend upon daily living Mrs. Hulings conducted herself, without question on the part of anyone as to her mental capacity, certainly up to the fall of 1896. All of the witnesses called by both the complainant and defendants, either consciously or unconsciously, bore testimony to the fact that during these many years, prior to and at the time of the agreement, this old lady was capable of transacting, and did transact, her own business. The dressmaker, who was brought here to show that her mind was impaired, was asked, “Did she give directions about the making of her dresses ?” answered, “She did, and she had her own mind about it.” Mr. Ogden, her son-in-law, is called to prove her incapacity in 1895, but his testimony showed that her lunacy attacked her at a period months after the challenged agreement had been made, and was manifested by indications which were so sharply defined that its first appearance was unmistakable. Mr. Ogden himself appears to have certified to Mrs. Hulings’ capacity to transact business, at about the time in January, 1895, when the challenged transaction occurred, and after that time. He witnessed a large number of receipts and like papers (twenty or more), which she signed, 'she receiving the money and conducting the business, and he, by witnessing her signature, recognizing her capacity to give a discharge.

On another occasion Mrs. Hulings refused to endorse a note for- one of her grandsons, Harry Fislor. Miss 'Ogden is brought to prove her incapacity, but her own relation of this matter shows a recognition of Mrs. Hulings’ capability. Miss Ogden suggested that Mrs. Hulings, instead of endorsing the note, should buy some goods for the young man, who was about to marry. She did not suggest that she (Miss Ogden) should buy them, but that the grandmother (Mrs. Hulings) should do so. Mrs. Hulings accepted this advice, and herself bought the goods. If her grandmother had then been incapable of conducting business, the natural instinct on the part of this young lady—a very intelligent young woman—would have been to say, “Grandmother, I will buy these goods for you,” but 'she did not say that. She made no suggestion which indicated a perception that her grandmother was in any way incapable.

All through the whole case it is quite evident that this old woman, feeble in physical condition, was mentally competent to conduct her own business, was well able to hold up her side of the business, and did so, until, as the witnesses describe it, she “began to see gypsies.” Nobody in the family dealt with this old lady as having any mental incapacity until the time came when she began to have illusions. The first of these illusions was that she imagined that gypsies were fighting or chasing each other out in the yard. All the witnesses agree that until the appearing of these hallucinations she conducted her own business affairs without any interference or intimation by anyone that she was' in any way incapable. The period when these illusions first attacked Mrs. Hulings has been fixed by almost all the witnesses as in the summer or fall of the year 1897, which is more than two years after she had surrendered the notes and accepted the agreement to pay interest in their place, the transaction here in dispute. Even after these illusions appeared in 1897 Mrs. Hulings had intervals when her mind was clear of them. But she gradually became worse, and application was made and she was declared to be a lunatic on October 14th, 1898, and to have been a lunatic for a period of two years preceding—that is, from October'14th, 1896. The proofs here offered do not sustain the lunacy as existing at the last-named date. But taking the de lunático return to be correct, it fixes the period of lunacy at a date one year and nine months after the delivery of the notes. When the evidences of the first appearance of lunacy are so sharply defined as in this case—the illusion as to gypsies—there is little difficulty in recognizing the d,ate of its first appearance. When it appears, as I think it does, that this old lady was competent in January, 1895, it makes no difference, even if she were a raving maniac two years thereafter, because in January, 1895, the transaction on her part was completely executed.

Considering all the evidence, it is affirmatively proven that, this old lady in January, 1895, when she accepted the agreement in question and surrendered the notes, was, mentally, entirely capable of conducting her own business.

• A very much more important phase of this case is the complainant’s second contention, which has been pressed with great energy by the counsel of the complainant, which is that, conceding that in January, 1895, Mrs. Hulings was capable of entering into an agreement of this kind, yet the persons with whom she entered into it were placed to her in a fiduciary relation, and were obligated, by reason of that relation, so to deal with her that she was informed of all the reasonable and probable consequences of her act, and that in acting she had the opportunity for advice on the subject, and that she was in no way precluded, by anything which they did, from exercising a perfectly free judgment.

Considering this' branch of the case, the first point to be examined is the relationship of this lady to these young men to whom she surrendered these notes. They were her grandsons, the children of her deceased son, Paschal M. Hulings, the maker of the two surrendered notes. For some length of time, may be a year and a half prior to 1895, Mrs. Hulings had lived in the same house (but upon the peculiar arrangement, giving her a separate household, which I have mentioned), with the grandson Andrew B. Hulings. She had her own rooms, her own servant and her own side of the house. Andrew lived in the same house on the other side, and in other rooms. They exchanged family courtesies and privileges when either had'special demand for additional room. They evidently lived upon kindly relations. Elmer J. Hulings, the other brother, lived a few hundred yards^away.

In. the pleadings in this case it. appears that Mrs. Rachel R. Hulings, the person alleged to have been unduly influenced, had made her will in 1879. That will has been proved without dispute. It is under that will that the complainant in this suit is acting. By that will, as expressed on its face, she gives to her daughter, Mrs. Ogden, $3,000 and some trifling personal property; to her son, Paschal (the father of these two boys), she gives $3,000; then to Elmer J. (that is one of these defendants) she gives $100 when he comes to be twenty-one years old; to Andrew B. (that is the other) she gives $100 at the same period; to Emma M. Ogden, her granddaughter, she gives $100; to another daughter some household goods, and the rest of her estate She directs shall be divided between Harry Fisler (another grandson) and Mary Watson, with a limitation over in case of their death to her son Paschal and her daughter Mrs. Ogden.

That is a synopsis of Mrs. Hulings’ will. It affords an idea of the sense of consideration which Mrs. Hulings, in the year 1879, and up to the time that she allowed that will to stand unrevoked, felt towards her children and her famliy. It gives the court unquestionable evidence of the esteem in which she held these members of her family and of the way in which she desired her estate to be divided among them. This condition of her mind, towards these children and grandchildren, remained unchanged, from 1879 to the 5th of October, 1886. Her son, Paschal, was at that time still living. Then she made a codicil and by that codicil she canceled the gift of $3,000 to Mrs. Ogden, who had died, and she gave instead of the $3,000, which she had given to Mrs. Ogden, $3,500 to Mrs. Ogden’s daughter. She gave to Paschal, by the codicil, $350, in addition to the $3,000 which she had given to him in the will, and she also provided that the residuary estate which, in her will, she had limited over to Paschal and another, should now be limited over wholly to Paschal. That is a perfectly plain declaration by this old lady that she was disposed to give greater consideration to her son, Paschal, than to any of her descendants. It is undisputed evidence executed by herself and proven by the parties here in court as an accepted declaration of her purpose and disposition.

In 1893 Paschal M. Hulings died. About two years after-wards the transaction here challenged as having been unduly influenced by his sons, was arranged and executed by Mrs. Hulings. The proof is that Mrs. Hulings declared that she very much regretted that she had not done more for Paschal in his lifetime. That declaration was made after Paschal had died in 1893. After Paschal’s death she changed her mode of living. She came to her grandson Andrew and proposed to him that he should come and live in rooms in the same house with her. That involved a change in Andrew’s mode of living. He told her that he could not do that without he had some money to arrange the change,- and that if she would go on his note he could arrange it, but otherwise not. She immediately said, “No, I do not go on notes.” Here is another of the many indications of the disposition of this old lady to have her own way. She had a definite opinion of what she proposed to do. She had a mode of doing business. She did not endorse notes. It was only after she had been shown that her plan for the change could not be effected without she helped Andrew, that she consented to do it. Andrew then moved into the rooms in her house.

Her proven relations with Paschal’s sons indicate that she had taken them into the preferential position which Paschal had in his lifetime occupied in her affections. It appears to have been an entirely natural and reasonable thing that she should, in gratification of such an affection, have extended to the sons of Paschal the consideration which she regretted she had not shown him in his lifetime.

The particular transaction which is claimed to have been procured by the undue influence of PaschaFs sons, is the surrender of the two notes by Mrs. Hulings to her grandsons, the defendants, Elmer J. and Andrew B. Hulings.

It may be said at the outset of the examination of this phase of the case, that there is no testimony whatever which proves that these young men, or either of them, in any way directly sought to induce their grandmother to make the arrangement which is here asserted to have been obtained by their undue influence. Nor is there any proof that their relation to her was such that she was in their care or under their control, or that she depended on them for advice, service or the conduct of her business. All that is shown is that she was old, was crippled physically, that she lived near to them and was upon terms of affectionate and kindly interest in them and that they went with her when she made the arrangement in question. The whole charge of the exertion of an undue influence is left upon inference.

It is contended that a presumption must arise because of the relations of the parties, that the young men were caretakers of their grandmother and that the burden of affirmatively proving that the notes were in fact surrendered by her without undue influence is thrown upon them.

On all the proofs there has been no showing of any such relation between the young men and their grandmother. She did not depend on them, she was quite able to manage her own affairs in January, 1895, and did actually manage them at that time. She had her business man of her own selection, Mr. Beeves. She used Mr. Ogden and his daughter for almost all of her writing needs. She was quite hard-headed and determined in having her own way. She had a keen sense of property, she scolded because taxes were high and prices did not suit her. The very transaction in question is a specimen of her independence. She first proposed going to see Mr. Beeves, hfr business man, at Woodbury. Her grandsons did not know for what reason she wanted to go. She persisted for several days in her expressions of her wish that they should drive her to see Reeves. Mrs. Haines, a visitor in her house at the time, confirms this. They finally complied with her request and drove her to Reeves’ office. She told him she did not want the principal of the notes, that all she wanted was the interest during her life, and asked Reeves, who had the notes, to give them up. He advised her to have, a written agreement drawn and signed by the grandsons for the payment of the interest and sent her to Mr. Carter, a scrivener, for that purpose. She and the young men then went to Carter’s office. He dictated the agreement set out in the answer. The young men both signed it. She gave them the notes, telling them to destroy them, which they did. She expressed her satisfaction when she came home. The grandsons afterwards paid the interest according to their agreement for several years, she receipting for it several times.

It will be noted that Mrs. Hulings herself initiated the steps looking to the arrangement now challenged. She went to her previously-selected adviser and business man, Mr. Reeves, who had served her for many years. The young men knew he had long been her trusted adviser. She opened the matter to him and he directed her to whom to go to have the written’ agreement drawn for the young men to sign. This written agreement was a valid instrument, binding upon the young men, securing her the payment of interest during her life. They do not appear to have suggested either the arrangement itself or .the terms of the agreement. She subsequently enforced it by repeated collections of interest. She appears to have dominated the whole transaction from beginning to end.

These incidents repel the idea of the exertion of an undue influence upon her. If there had been a purpose to use such an influence, the young men, or one of them, would probably have persuaded Mrs. Hulings to give them the notes without any agreement. They would have dissuaded her from opening the matter to her long-trusted adviser, Mr. Reeves. They would have controlled the character of the agreement to pay interest which they signed so that its efficiency might have been impaired, and they •would have endeavored to suppress it, instead of paying interest according to its terms for years.

The weight of the evidence indicates that the old lady had in memory her fondness for her son, Paschal, and that she had not given him that preference in life that she had intended to give him, and recognized his boys as standing in his place. She desired to give them favorable consideration, and herself suggested and carried into efEect the arrangement which is here claimed to have been induced by undue influence.

The testimony as to the relations of these young men to their grandmother and' their' conduct towards her neither indicates that they had any control whatever over her actions, nor that they attempted to obtain her property from her. If they had such control over her, and had a disposition to exercise it,' they certainly would have managed to get into their possession the several hundred dollars of cash of which she died possessed, and would most probably have procured her to assign to them some of her mortgage securities. Nothing is exhibited of this kind. The case, as made, does not support the complainant's claims.

I will advise a decree dismissing the complainant's bill.

Whether such a decree should carry costs, in view of the fact that the bill is filed by an administrator do bonis non cum testamento annexo, prosecuting a claim for the recovery, as he alleges, of part of his testator’s estate, is a matter on which I will hear counsel.


author: Grey, V. C.

text:
    Caleb E. Shreve v. Ebenezer S. Mathis.
    [Filed May 14th, 1902.]
    1. Where the complainant is, at the time of filing his bill, in the actual possession and enjoyment of a right of way over which he is conducting a business which is dependent upon the use of the way, and the defendant, denying- the complainant’s right to the easement, threatens so to obstruct the way as to interfere with and destroy the complainant’s business, this court will restrain such interference, pending litigation to determine the dispute as to the right of the complainant.
    2. Where the terms under which the complainant claims the easement are not words of conveyance creating a legal estate, but words of agreement, creating an equitable one, he will not be sent out of this court to establish his title in a court of law.
    3. The case of Todd v. Staals, 15 Dioh. Oh. Rep. 507, distinguished.
    4. Where by a deed a lot of land is conveyed by apt words and distinct description, and in the same deed there is an agreement for a “free and unobstructed right of way over a certain private alley, situate,” &c., by separate and disassociated description, not. referring the right of way to the lot, the right of way is in gross, and hot appendant to the holding of the lot. '
    5. A right of way expressed in the words quoted, contains no specification limiting either the manner or the extent of its use. Any use, consistent with the use of a right of way, by foot passage, or of teams, wagons, horses or other animals, is within such an agreement.
    On bill, answer, replication and proofs.
    The complainant is the owner of a lot of land in Atlantic City, lying about one hundred feet northerly from the north side of Pacific avenue and about one hundred and fifteen feet easterly from the east side of Yirginia avenue. The bill alleges that the complainant has for some years been, and that he now is, in possession and occupation of a free right of way over a private alley eight feet wide, which runs from the rear end of his lot to Yirginia avenue, and that he has been and is using the same as a right of way in the conduct of his milk business for purposes of passage to and from his combination cottage and milk depot by himself, his employes, patrons and tradesmen, with whom he does business, with wagons and conveyances, necessary and usable in and about his operation in conducting his milk depot. He alleges that the alley has been so used since January, 1891, to the defendant’s knowledge, and without his interference until the present obstruction.
    The following diagram shows a plan of the lot on which the complainant has erected his combination cottage and milk-house, and also the alley over which he claims the right to conduct his¡ milk business:

    The corners A, B, C, D, enclose the lot conveyed by the defendant to Mrs. Shreve.
    The milk-house is located on the nearly square lot enclosed in heavy black lines.
    The alley in dispute enclosed in heavy black lines.

      The bill further shows that on the 11th of December, 1900, the defendant forbade the complainant, his servants and other persons from continuing to use the alley, as had been their practice in the usual and ordinary business of the complainant, and that he built an obstruction in the alley to prevent the complainant’s use of it as a passageway and assaulted the complainant’s servant in further interference with its use. The complainant alleges that he has no method of reaching his milk depot and cottage, except through and over this alley, which is surrounded on every side by private residence property, and that if he shall be prevented from the use of it his property for the purposes for which it has always been used, will bo worthless; that his business is of such a character that free and uninterrupted access to his milk depot is absolutely necessary to its successful conduct, and that the defendant’s interference, by preventing the complainant’s use of the alley, will, if continued, entirely ruin and destroy his business.
    The bill shows that in 1891 the defendant, Ebenezer S. Mathis, conveyed in fee by metes and bounds to Elizabeth T. Shreve (•the wife of the complainant) the lot of land which included that on which the milk depot has since been erected. The same deed, by a separate description, disposed of an interest in the alley in these words:
    “And also it is hereby mutually understood and agreed that both parties to these presents, their heirs and assigns, shall at all times have a free and unobstructed right of way in and over a certain private alley, situate on the east side of Virginia avenue, between Atlantic and Pacific avenues,, Atlantic City, New Jersey, and bounded as follows
    [Giving the metes and bounds of description of the alley.]
    In 1900 Elizabeth T. Shreve conveyed in fee to one Eva M. Mathis all that portion of the lot which bounded on the alley, and which included the milk depot by metes and bounds. This piece has no egress, except through the alley in question, as it lies one hundred feet from Pacific avenue and, one hundred and fifteen feet from Virginia avenue. (See diagram.)
    In the same deed the alley was disposed of in the same words and phrases above quoted, which had been used in the defendant’s deed to Mrs. Shreve.

      In. the same year (1900) Eva M. Mathis granted to the complainant the premises conveyed tó her by the last-named deed, describing the lot by the same metes and bounds and using the phrasing above quoted in dealing with the alley.
    The only defendant is the grantor named in the deed of 1891 above recited, who is the person who has obstructed the complainant’s use of the alley.
    The complainant prays that Mathis may be restrained from obstructing the free and uninterrupted, use of the alley by the complainant, his employes and tire various persons with whom he conducts his business, and that if the defendant’s conveyance of 1891 (the words of which are above quoted) shall be adjudged to be a contract and not an actual grant of the alley, then that the defendant’s deed may be decreed to have been a conveyance, and for other and further relief.
    An order to show cause for a preliminary injunction restraining interference with or obstruction of the complainant’s use of the alley was- allowed. Hpon the coming in of the order to show cause, the defendant filed his answer, and after argument, a preliminary injunction was allowed, restraining the defendant from obstructing the complainant’s use of the alley.
    The defendant’s answer admits his conveyance, above recited, of a free and unobstructed right of way over the alley in question, but avers that the fee-simple title to the alley was, and still is, in himself. He denies that the complainant has any interest in the alley, and denies that the deed made by him (the defendant) granted any interest other than a right of way over the surface of the alley, and denies that he has in any way granted any greater right. He denies that he had any information that the grantee in his deed intended to use the portion of the land conveyed for the purpose of conducting a milk business, but admits that his grantee went into possession of the premises conveyed and erected a combination cottage and milk depot, and that the alley has since been used in connection with the said milk business, but he denies that he ever acquiesced in that use, and avers that he has always objected thereto. He admits that the complainant has used the alley for the purposes named in and about his milk business, but insists that this use was despite Ms protests and against Ms assertion that the alley conld be used only for egress and ingress by foot over and upon the surface of its soil.
    He admits that he denied the right of the complainant and his employes to use the alley for the purpose of driving wagons and conveyances over it. He admits that he erected over the alley an obstruction to prevent their passage through it, but insists that the obstruction did not interfere with the free use of the right of way as a 'private alley. He avers that the complainant has no right in the alley such as he claims, and that the limit of his right is the use of the alley as a private way, and denies that the limitation of the complainant’s use of the alley to that of a private way would work irreparable damage to him in the conduct of his milk business.
    Issue was joined and the cause came to final hearing.

      Mr. Eli H. Chandler, for the complainant.

      Mr. S. Cameron IimMe and Mr. Clarence L. Cole, for the defendant.
   Grey, V. C.

The essence of the dispute between these parties is the de-. fendant’s denial of the complainant’s right to use the alley in question for the passage of wagons and horses in and about the conduct of his business. The execution and delivery of the deeds above recited aré not denied. That the defendant'had granted a right of way for use as a private alley, while, in form, denied in the answer, was admitted on the argument.

The defence is made, first, on the ground that the case is within the ruling of the court of appeals, in Todd v. Staats, 15 Dick. Ch. Rep. 507, to the effect that where the fundamental right of the complainant is based upon an alleged easement in lands of the defendant, which is in substantial -dispute, the establishment of the right at law must precede the interference of a court of equity.

The case under consideration differs in several essential particulars from the ease of Todd v. Staats. In that case both the legal right to the easement and the location of it on the land were -in dispute. There was no actual user and enjoyment of it in the conduct of a business which would be destroyed by a cessation during the pendency of a suit. In this case there is no dispute 'regarding the territorial location of the easement: Both sides agree upon the existence' and boundaries of the alley. It is not disputed that the complainant is entitled to a way over the alley. He has for years been in the actual use of it. The point disputed is the character of the use which he is entitled to make of the way—a question, not of fact to be found by a jury, but of law to be determined by á court upon an inspection of the alleged grant.

It is also substantially undisputed that the defendant has so obstructed the alley that the complainant is unable to use it in the manner in which for years, he, and those under whom he claims, have been accustomed to use it, and it manifestly appears by the defence made that the defendant intends to continue so to obstruct it, unless restrained by the process of this court. Such interference would -be, substantially, a destruction of the complainant’s milk business, as his milk-house would be cut off from all street or alley access. This would be an injury continuous in its nature, for which no adequate relief can be afforded him at law.

Another distinction between the Todd Case and that now under consideration, appears in the character of the title to the easement. In the Todd Case every question suggested is declared by the court of appeals to lack any element of an equitable nature and to be properly determinable by the courts of law (at p. 5IS). An examination of all the deeds submitted in this case will show that the clause which deals with the right of way is disassociated from the words of grant in the deeds. The words used are not words of conveyance, but of promise and agreement, and if the complainant were sent before a law court to establish a title to the way, it might there be forcefully argued that he has no legal title to the easement; that his rights on the face of all the deeds are purely equitable and he would, after all, be obliged to ask the intervention of this court to secure him tbe benefits of his purchase. Fox these reasons the decision in Todd v. Staats cannot be considered to control the present cause.

The defendant contends, secondly, that by the terms of the deed made by the defendant to Mrs. Shreve, the alley is usable only by the owner of the whole of the lot' conveyed by that deed and not by the owner of a part only of that lot, which the complainant in this case has come to be. The expressions in the defendant’s deed regarding the right of way, are an agreement that the grantee and grantor, “their heirs and assigns, shall at all times have a free and unobstructed right of way in and over a certain private alley, situate,’’ &c. The complainant has, by intermediate conveyances, come to be the holder of title to the northern end of the lot which the defendant «conveyed. This is the part which the complainant holds and on which he has erected his milk-house and conducts his business. It comprises the onfy part of the lot which the defendant conveyed, which adjoins the alley. (See diagram.) The occupants of the other part cannot reach the alley without crossing the complainant’s lot. The effect of this division of the lot conveyed by the defendant, has been to lessen rather than to increase the area of land which may use the alley, if the point made has any significance. To declare that the alley can be used only by each holder of the whole of the lots owned by the defendant and his grantee, at the time the defendant conveyed in 1891, would probably be a greater disadvantage to the defendant than to the complainant, for the lot the defendant then owned bounds on the alley for one hundred and fifteen feet and is so located that a subdivision of it into smaller lots which may use the alley as a back entrance, may be- very profitable to the defendant. The terms used in his deed are of mutual agreement as to the use of the alley. They bind the defendant and his assigns, as well as his grantee and his assigns. If one is required, in order to use the alley, to be the owner of the whole of the lot, it is difficult to say that the other is not. To hold that only the owner of the whole of each lot may use the alley, would be a very serious injury to both parties. Nothing in the expressions used in the deed justifies such a construction. ,

There is, in fact, nothing in the argument for the right of way which either limits its use to the lot conveyed by the same deed, or even relates it to that lot. The agreement for the way is entirely separate and disassociated from the grant of the lot. One passes by one description and set of words, perfect and complete in themselves; the other by another description and set of words which are entirety distinct and unrelated. The terms of the defendant’s deed are such that the rights of the grantee in the way are in gross, and not appendant to the ownership of the lot conveyocl in another part of the same deed.

The last point made by the defendant is his claim that the right of way is over a private alley, and that the use to be made of it must be as a footway for the owners, and not as a foot and wagonway for themselves and such as may have business with them. The agreement for the way contains no specifications of any particular manner in which the alley should be used. It imposes no limitation on the extent of the use. It is declared that it shall be a free and obstructed right of way over a private alley. Any use consistent with the use of a way is within the agreement. A footway, a wagonway, a passage for horses or other animals are all permissible uses -of a way. The reference to a private alley distinguishes it from a public alley, the care and maintenance of which is charged on the public, but does not define or limit the character or the use which those persons entitled to a right of way over the private alley shall make of it. Nor is the owner of the way limited to its use by himself in propria persona. The way belongs to him as his property. All persons having occasion may, with his permission, transact business with him by passing to and fro over the way. He may use it by his servants and employes in conducting his business.

The complainant is entitled to relief. A decree will be advised in accordance with the views above expressed.


author: Stevenson, Y. C.

text:
    Christian Feigenspan, a corporation, v. Robert Mulligan and George Wellendick.
    [Filed February 11th, 1902.]
    1. 'An attempted chattel mortgage of a liquor license will be presumed, to be an attempt to mortgage the privilege conferred by the license, and not the paper license as a chattel of independent intrinsic value, unless the contrary clearly appears.
    2. A liquor license, being a mere privilege, and not a property right, is incapable of being the subject of a chattel mortgage, either under the general law or under the act of March 28th, 1892 {Gen. Stat. p. 1828 § 195), as the statute does not make the privilege a property right.
    8. The holder of a liquor license in a city of the second class executed an instrument in the form of a chattel mortgage, purporting to convey the license, by which the mortgagee, on default, was authorized to sell the license for the best price obtainable. The mortgagee, on default, made no effort to secure the consent of the city to a transfer of the license, which it was empowered to authorize by the act of March 28th, 1892. {Gen. Stat. p. 1823 § 195), but advertised the license for sale in connection with other property covered by the mortgage, and purchased the license and other property for a lump sum.—Held, that the relation of the mortgagee to the property was not changed by the sale, but was to be determined from the instrument itself.
    4. Where it does not appear that the mortgage is restricted to tne written license independently of the privilege granted thereby, the mortgage will not be construed to entitle the mortgagee to the possession of the written license merely for the purpose of preventing the mortgagor from conducting his business.
    5. The instrument containing a requirement that the sale of the mortgaged property on default shall be “for the best price obtainable,” the mortgagee is not entitled to sell the license at a foreclosure sale, or to the possession thereof for the purpose of such sale, when it does not appear that lie has obtained the consent of the city, under the act of March 28th, 1892 {Gen. Stat. p. 1828 § 195), to a transfer of the license, or that the consent of the city thereto has been refused, without regard to whether the instrument be construed as a pledge of the privilege granted by the •written license, subject to a condition subsequent that th.e city consent thereto, or whether it be ‘regarded as a mortgage of the written license as a chattel, as even'’in the latter case it would not be a sale for the best price obtainable if disconnected with the privileges granted' thereby,.

      0. The provision oí the instrument authorizing the mortgagee, in case of default, to take possession of the property and sell the same for the best price obtainable, does not authorize the mortgagee to take possession of the license except for the purpose of sale in accordance with the terms of the instrument.
    On demurrer.

      Messrs. Roberson & Demarest, for tbe complainant.

      Messrs. Rilcer & Rilcer, for the demurrants.
   Stevenson, Y. C.

The bill exhibits the following case:

The complainant, a corporation under the laws of New Jersey, the corporate objects and business of which are not stated, held two chattel mortgages, made by the defendants to secure, in the aggregate, $807.50. The larger of these mortgages, and apparently the other as well, covered “certain saloon fixtures at number 463 Avenue C in the city of Bayonne, where the said mortgagors conducted a saloon.”

On or about June 29th, 1900, the complainant lent the defendants $250 for the purpose of obtaining “the license from the mayor and council of the city of Bayonne, to keep a beer saloon and, restaurant at 463 Avenue C in said city." The license ran from June 1st, 1900, to June 1st, 1901. The defendants gave to complainant their promissory note for the $250, dated June 29th, 1900, and payable one day after date, and to secure the note executed and delivered to complainant an instrument which is described in the bill as follows: “A certain chattel mortgage bearing date the 29th day of June, 1900, conditioned for the payment of said note.” By the terms of this instrument the defendants “bargain and sell” unto the complainant, “its successors and assigns, the license above mentioned.” So far the bill distinctly alleges that the thing attempted to be sold by way of mortgage was the permission or privilege which the defendants enjoyed to keep a beer saloon and restaurant at No. 463 Avenue C, and the description of the instrument which purported to effect the sale as a chattel mortgage might well be disregarded.

The bill, however, annexes and incorporates a copy of the so-called chattel mortgage, from which it appears that the form of contract employed to secure the payment of the $250 was the ordinary form of a mortgage of chattels. By this instrument-the defendants, in terms, bargain and sell

“all the goods and chattels mentioned, being the license granted to us by the mayor and council of the city of Bayonne to keep a beer saloon and restaurant at No. 463 Avenue O, Bayonne, N. J., from the first day of .Tune, 1900, to the first day of .Tune, 1901, and all renewals of the same.”

The defendants, the mortgagors, also warrant the title of “all and singular the said goods and chattels.” In case of default in payment of the sum ($250) secured by the mortgage, the mortgagee is authorized to enter any premises where any of “the said goods and chattels” may be and to take and carry away “the said goods and chattels and to sell and dispose of the same for the best price they can obtain,” and out of the proceeds of sale retain and pay the said sum of $250, &c.

On November 1st, 1900, the mortgages being all due and unpaid, the complainant, by its appointed agent, undertook to seize the mortgaged property for sale. The defendants refused to deliver to this agent “the license mentioned and described in the chattel mortgage.” Thereupon the complainant’s agent advertised the mortgaged property for sale at public auction. The advertisement of sale describes saloon fixtures, a stock of liquors, &c., and property which is designated: “License to keep a beer saloon and restaurant granted by the mayor and council of the city of Bayonne, dated June 14th, 1900.” The sale was held on November 15th, 1900, and the entire property covered by the three mortgages was struck off to the complainant in one lot for $300.

The bill alleges that on account of the refusal of the defendants to surrender “the said licenses” to the complainant’s agent, who conducted the sale, that agent was unable “to make a delivery thereof” to the complainant; that the defendants refused after the sale to deliver “the said license” to the complainant; that they continue to conduct their saloon on the premises above mentioned “by virtue of said license;” that the complainant believes that the defendants “have concealed said license” although the complainant “is entitled to possession thereof for the purpose of carrying on said business under said license.”

The bill further sets forth that the complainant sought by a writ of replevin, issued out of the supreme court, to obtain “possession of said license,” but that the sheriff to whom the writ was addressed was unable to find “said license” and that the said complainant was compelled to proceed in its replevin suit without taking possession of “said license.”

The bill alleges that the defendants are holding and concealing “said license” for the purpose of defrauding the said complainant and preventing it from taking possession thereof by virtue of said chattel mortgage “and the sale of the goods and chattels” above described, and that it is the intention of the defendants to continue their saloon business until the termination of said license on June 1st, 1901.

Strictly speaking there is no prayer for relief in the usual and proper form. Process of injunction is prayed for to be directed to the defendants, enjoining them from transferring their license “being the license granted, &c., to keep a beer saloon and restaurant, &c., and all renewals of the same,” and from conducting^their, saloon by virtue thereof “until the termination of the said replevin suit.” The bill is therefore an injunction bill largely, if not exclusive^, in aid of an action at law.

Upon filing the bill a preliminary restraining order was made enjoining any transfer of the license. As a condition apparently to such order the complainant elected to discontinue the replevin suit, and, as is stated in complainant’s brief, “elected that the suit for the recovery of the license should continue in the present suit.” No amendment of the bill was made, but in view of the arguments of counsel on this demurrer the bill may be deemed amended so as to pray for such injunction prohibitory or mandatory as the facts set forth may call for.

The complainant’s brief takes the position that this suit is not for the foreclosure of the mortgage, “but merely to restrain defendants from selling or using the complainant’s property.”

As the bill now stands, its sufficiency must be tested by the question whether it sets forth facts which entitle the complainant to injunctive relief for the protection of the property which it acquired by the so-called chattel mortgage of the license or for the protection of the alleged further title to or interest in said license which it claims to have acquired by the auction sale.

The bill makes no attempt to distinguish between a license, i. a., a permission to sell intoxicating liquors and the paper-writing which usually, but not necessarily, evidences such license. The permission and the permit bear the same name and hence the confusion. The fact that the permission to keep a saloon and restaurant at No. 463 Avenue C was granted by the municipal authorities to the defendants is distinctly stated at the commencement of the complaint set forth in the bill. Nowhere is there any allegation that any paper-writing accompanied this permission. The bill and the so-called chattel mortgage, however, call this valuable privilege, for which the defendants paid a fee of $250, "goods and chattels” precisely like the chairs and tables and decanters in the saloon. The complainant also undertook to treat all the rights which it acquired under the mortgage as if they consisted of the usual conditional title to chattels acquired by a chattel mortgage and the rights and remedies connected therewith. ■ '

In view of the scope of the argument I shall assume that it appears with sufficient distinctness that the defendants not only held the privilege of selling intoxicating liquor without liability to criminal prosecution, but also held some kind of a certificate in writing which evidenced such privilege. The difficulty in dealing with this case largely arises from the erroneous notion which pervades the bill and so-called chattel mortgage that the thing which constitutes a liquor license is a chattel which is purchased from the municipality and is capable of sale and delivery and seizure under a writ of replevin.

The important question to be determined is what property rights the complainant acquired by the instrument set forth in the bill? I shall not undertake to apply in detail the various clauses of the instrument to the subject-matter of the contract which the parties were endeavoring to make. What the parties intended to mortgage is beyond dispute. It was the' valuable privilege of keeping a saloon and restaurant on the premises described as No. 463 Avenue C. It was not a chattel, a paper-writing, which had no value except as it evidenced such privilege. The remedial rights growing out of the instrument relating to the paper-writing as a chattel must be construed with reference to the substantial intention of the parties, which plainly never included the granting of a wider right in respect of the paper-writing than was granted in respect of the privilege. Common sense calls for such a construction as will, at all times, keep the evidence of the privilege for the benefit of the party who holds the privilege. Of course the holder' of stock in a corporation or of a license to keep a saloon, or a license to practice law or medicine, may intentionally sell and convey the certificate of his rights without undertaking to sell or convey the rights themselves, but such an intention must distinctly appear. The complainant, in my judgment, did not a'cquire at any time any more •absolute title to the intrinsically worthless paper-writing, which presumably he vainly sought to have seized under a writ of replevin, than he acquired to the valuable incorporeal right or privilege which the writing evidenced.

The extent to which the complainant’s right to, of -in respect of, the privilege of keeping a beer saloon and restaurant required for its beneficial enjoyment the possession of the paper-writing defines the extent of such right of possession. If the privilege of keeping the saloon was assignable, then the assignee of the privilege would have the right to possess the paper-writing. If such privilege was absolutely unassignable, then the party claiming as assignee would have no right to the paper-writing, inasmuch as no intention is disclosed to sell or mortgage the paper-writing as an independent chattel of intrinsic value.

If such privilege was conditionally assignable, then the conditional assignee would take a correspondingly conditional right to the possession of the paper-writing.

When the parties to a written instrument employ a set form of words, furnished to them by a form-book or a printed blank, and incongruous with the' subject-matter of their bargain, because adapted to an entirely different kind of bargain from that which they are' .trying to make, difficulties of construction are almost sure to arise. In such cases equity may require that the general intention of the parties should be carried out, without at all times strictly applying the ready-made phrases which the parties have inaptly employed by heedlessly following their printed blank or form.

It seems clear that the power which the defendants possessed, as the holders of this license, to substitute, with the municipal consent, some other person in their place as licensee was the valuable thing which was intended to be used so as to secure the complainant’s debt.

This license was not generally to keep a beer saloon and restaurant anywhere in Bayonne, but to keep such beer saloon at No. 163 Avenue C, and not elsewhere. It does not appear what interest the defendants had in the premises which were licensed, whether as tenants under a lease or owners of the fee, or otherwise. The bill of complaint seems to proceed upon the theory that, after the form of a chattel mortgage sale at public auction had been pursued and the complainant had caused the thing which is called a license to be struck off to itself as the highest bidder, it had the right to take possession of the licensed premises, as against the defendants, and carry on the saloon and restaurant there, and that the continuance of such business, after such sale, by the defendants was a wrongful act, which should be enjoined.

The court is not informed of.the facts upon.which depend the questions as to the possible rights which the complainant may have acquired by their contract in respect of the occupation of the premises known as No. 463 Avenue C. Some ascertainment of all such possible rights seems necessary to any definition of the rights which the complainant took under its contract, and of the remedies which were available to it for the recovery of its debt, as well as the limitation upon those remedies. I am not at all sure that the nature of the defendants’ occupation of the mortgaged premises is not a necessary factor to be considered and dealt with in determining what remedial rights the complainant held when it filed this bill.

Out first inquiry relates to the extent to which this Bayonne license to keep a beer saloon and restaurant was assignable. It was undoubtedly assigned by way of mortgage as far as the law would permit.

Apart from the effect of recent legislation, to be considered later, the law is plain that this license is not property and is not assignable, but is a “mere temporary permit to do what otherwise would be illegal, issued in the exercise of the police power.” Voight v. Excise Board of Newark, 30 Vr. 358, 360 (Justice Gummere); Semple v. Flynn, 10 Atl. Rep. 177; 17 Am. & Eng. Encycl. L. 232.

But it is claimed that the act of March 28th, 1892 (Gen. Stab, p. 1823 § 195), which provides that in cities of the second class it shall be lawful for the license board “to permit a transfer of such license from the person holding such license to another person, or from one locality to another locality in said cities,” has made a change in the legal character of licenses in cities of the class to which Bayonne belongs. Precisely this point seems to have been settled adversely to the complainant’s contention in Voight v. Excise Board of Newark, supra. The statute construed in that case empowered “the excise board or board of excise commissioners of any city * * * in their discretion to transfer and revoke any license granted by them.” The supreme court held that the contention that this statute making a license transferable converted a “mere privilege into a property right” had no basis.

A distinction may be taken between the statute dealt with in Voight v. Excise Board of Newark and the statute applicable to Bayonne, because in the.former the licensing power is authorized to transfer the license, while in the latter the licensing-power is authorized to permit a transfer of the license. Giving this distinction its full force, the fact remains that under each statute the license remains untransferable until the licensing-authority has acted, and in each case any action at all is entirely discretionary, and full control is reserved as to the person to whom, or the place to which, any transfer will be allowed. I do not think that the essential nature of a license like that of the defendant has been altered by the act of March 28th, 1892-.

In the case of Hoagland ads. Nall, 9 Vr. 351, the subject-matter of a contract to sell was a leasehold of an inn and other personal property, including an item described as “the licenses of the house.” The question was whether the plaintiff (the vendor) was “incapable of performing his part of the contract for the reason that the license was not assignable.” The contract called for delivery of the licensed premises at a future day. The decision was to the effect that the vendee was charged with knowledge of the law which made the license, i. a., the privilege, untransferable, and that, therefore, it was “certain that what he sought was the acquisition of a paper which would be absolutely ineffectual as an authority to keep a tavern.” The court held that the certificate, i. e., the paper-writing, was precisely what the vendee contracted for and suggest that he may have thought that thé possession of the certificate might be “in some way beneficial in a future application to have his house licensed as an inn.”

I see nothing stated in the opinion of the court in this case of Hoagland ads. Hall which conflicts with the views which I have expressed. It merely presents a case where a licensee was giving up his licensed premises and abandoning the business which he was privileged to conduct on those premises, and he therefore very naturally included in his sale his “license”'—i. e., the certificate of his license, which no longer could be of any value to him—for what it might be worth to the vendee, both parties knowing well that the privilege which the certificate evidenced would expire upon the consummation of the sale. This case is an illustration of what has been heretofore stated, viz., that the holder of a piece of paper intrinsically worthless, but evidencing a valuable right or privilege, may contract to sell the same without regard to the right or privilege which it evidences if he sees fit to do so. In construing such a contract the intent is to be discovered. The circumstances in the ease of Hoagland ads. Hall made the intent plain beyond dispute.

A bill of sale of a certificate of stock would ordinarily raise no question of intent, because the property rights of the stockholder and the piece of paper—the chattel which evidences those rights—are equally transferable.

The bill of sale of an attorney’s or a physician’s certificate evidencing his right to practice law or medicine, would also seem to give no difficulty in regard to the intent, because the certificate would be all that the attorney or the physician could transfei.

The difficult case is presented here where the certificate of the license, as a chattel, is transferable without any limitation, while the privilege to keep a beer saloon and restaurant, which it evidences, is transferable only in case a condition shall happen within the discretion and control of a third party. I have already indicated what seems to me to be the proper rule for the construction of an instrument purporting to convey such a certificate.

While the defendants’ license was merely a personal privilege, and not property capable of being sold or mortgaged like lands or chattels or choses in action, it may be conceded that its capability of being transferred made it possible for the defendants to make a valuable and effective contract with references to such possible transfer.

An instrument might be executed which would operate as a transfer upon the happening of a condition subsequent, viz., the municipal permission to transfer. A contract might be made by which the licensee obligated himself to execute a transfer upon the occurrence of the condition which would make a transfer legally possible. Whether-the so-called chattel mortgage should be regarded in equity as one or the other of these things is, I think, immaterial for the purposes of this case. At most, what the complainant obtained to secure his loan was a right to have the license transferred and the proceeds of such transfer applied to his debt in case the necessary municipal consent to such transfer should be obtained. Accompanying this right were various ancillary and remedial rights against the defendants affecting their conduct in relation to the transfer and affecting the possession and control of the written certificate of the license. But, until the necessary municipal permission to transfer should be obtained, the enjojmient by the defendants of their privilege to keep a saloon is not affected by any express or implied contract which I can discern. Until some reason connected with securing the transfer should arise for committing the custody of the cerlificate of the license to the complainant, the mortgagee, I see no reason why the defendants should not hold the written evidence of the privilege which they continued to enjoy.

It must be admitted that when the mortgage debt came due the complainant had the right to proceed to secure the transfer of the license and to have possession of the certificate so far as was necessary for that purpose. The complainant might also have various equitable remedies in case the defendants did not perform their express and implied obligations in relation to the business of procuring the permission for transfer.

In this case, however, the complainant made no effort to secure the municipal consent, but proceeded to seize the certificate of license and sell the license itself at auction to the highest bidder. Not being able to obtain the certificate, the complainant assumed to offer for sale to the highest bidder the incorporeal ¡right or privilege of keeping a beer saloon and restaurant and the certificate of that privilege as well. These things were sold in one parcel, with a lot of chattels which had been mortgaged, as we have seen, to pay certain other debts, and the proceeds of which would therefore go to the payment of those debts. The price, therefore, which would be obtained would be for the whole lot, and the price which was realized from the sale of the privilege of keeping a beer saloon, with its certificate, could never be ascertained. Moreover, to sell at auction a personal privilege which would only become transferable from the party in whom it was then vested in case the consent of the municipal authorities to such transfer could be obtained, was practically to offer a ticket in a lottery. The complainant, being the highest bidder, was declared the purchaser of all the property so offered for sale.

Whatever may be the correct construction of the so-called chattel mortgage, I do not see how such a sale as is set forth in the bill could in equity alter the relation of the complainant to the' property which it undertook to sell or strengthen its title thereto. Even an outside purchaser, unless we are proceeding upon altogether erroneous principles, would seem to occupy no-better position with respect to the possession of the certificate than did the complainant before the sale until the necessary consent to the transfer of the license should be obtained, but the character of this attempted sale and the fact that the complainant sold to itself make it unnecessary to pursue this inquiry.

In ascertaining whether the complainant is entitled to any relief in this case, we may therefore disregard this attempted sale and deal, solely with the rights which the complainant held under its so-called chattel mortgage after the debt thereby intended to be secured had come due, and the complainant undertook to enforce its lien or contract, or conditional conveyance for the collection of the same.

Apart from the power of sale contained in the so-called chattel mortgage which will be considered later, I see no grounds for any injunctive relief for the complainant in this case.

It is not alleged that the defendants by any conduct of omission or commission have interfered with the obtaining of the municipal permission for the transfer of this license, or that the complainant has endeavored to obtain such permission. This court is not asked to conduct any proceedings for realizing the vahre of the rights which the complainant holds by way of mortgage; if any such proceedings are possible, the sole remedy prayed for is a writ of injunction.

The bill proceeds upon the theory that whether the license should ever become assignable or not the defendants lost their right to enjoy it and should be compelled to surrender the certificate, worthless though it might be to the complainant. I cannot assent to such a view as I can find no intent in the mortgage that the defendants should part with their privilege except so far as the same might be lawfully and beneficially transferred to the complainant or its appointee.

The security for the complainant’s loan was the valuable right to keep a saloon and restaurant, not the power to exclude the defendants from continuing that business. '

The defendants pledged the possible right to keep a saloon and restaurant, not'the power to throw them (the pledgors) out of that business if they did not pay the debt. Of course if the Complainant' had expressly agreed to discontinue their business •as one of the steps to effect a transfer';of'their license,'the case would be altogether different,''-but I fihd ho trace-'of Any such intention.

But it may be insisted that notwithstanding the fact that the privilege to keep a beer saloon and restaurant with its conditional assignability was the security given for the loan, still the defendants executed a chattel mortgage to secure that loan and they had at the time in their possession, as we have assumed, a certain chattel called a license which they described in their mortgage as the thing thereby conveyed. It may be urged that the defendants in this chattel mortgage expressly empowered the complainant to seize and sell this chattel for the satisfaction of their debt; that whether the purchaser at the sale of this chattel could acquire any right or privilege connected with the chattel, either absolutely or conditionally, was a matter to be considered by the defendants when they made their mortgage; that the complainant had a right in good faith upon default in the payment of its debt to proceed to sell the mortgaged chattel in pursuance of the power of sale.

The complainant would hardly claim that this contract should be regarded as a mortgage of the chattel (the certificate of license) only, and that a sale of this chattel under the provisions of the mortgage would not include any interest in the privilege of keeping a beer saloon and restaurant. -The most favorable construction of the so-called chattel mortgage for the complainant’s case makes it include both the certificate and the privilege, but makes the privilege to the extent that it was assignable follow the disposition of the certificate as a chattel under the strict construction of the contract as a chatted mortgage. If we adopt this view I clo not think that it leads to a- conclusion favorable to the complainant’s case.

The complainant was not empowered to sell this chattel in such manner as it might see fit. There was. a most important limitation upon this power of sale. It was obliged to sell for "the best price it could obtain.” The complainant therefore could not ignore the' peculiar character and incidents of this chattel as the representative and symbol of the privilege of keeping a beer saloon and restaurant. The complainant was bound to sell so as to realize the best price, not only for the certificate as a piece of paper, but for the valuable thing which would or might go with- it, and which had been pledged 'to secure its debt. The power of sale did not even refer to a sale at public auction. A private sale in this case might have been the more advantageous. Is it not plain that without reference to any possible right in respect of the occupation of the licensed premises, which may have been part of the mortgage property, the complainant proceeded to sell in violation of the provisions of the power of sale? If any circumstances existed which made this auction sale justifiable as the means which a reasonably prudent and careful man would employ to obtain the “best price” for the thing offered for sale, those circumstances should have been set forth in the bill of complaint.

Disregarding the claims put forth by the complainant, based on the auction sale to itself, the question in this case seems to be reduced to this: Does the bill show that the defendants wrongfully declined to surrender this certificate to the complainant for the proper sale thereof under this power of sale ? The complainant did not demand the surrender of the certificate for the purpose of selling it for the best price it could obtain, in accordance with the limitation contained in the power of sale. It announced its purpose to sell the certificate at public auction as a piece of paper, with such uncertain possibilities of transfer as might go with it. It is not alleged that the complainant made any effort to sell the certificate in connection with a right to occupy the licensed premises, or that it made an effort to sell it with a condition that the municipal consent to a transfer should be obtained. No facts are shown from which it might be inferred that the municipal consent to a transfer was not obtainable, and that therefore the sale of the certificate at auction, without reference to any municipal consent to a transfer, was the most advantageous sale possible. If the defendants were obliged, on account of the strict meaning of the words which they employed in their contract, to submit to a sale of this certificate as an independent chattel, whether -the privilege of keeping a beer saloon and restaurant went with such sale or not, which I am now assuming to be true, it still remains true that the complainant was obliged to sell for the “best price it could obtain,” and therefore a sale of the certificate, as a piece of paper disconnected from the valuable privilege which it evideuced, would be justifiable only in case its sale in connection with such privilege should be impossible.

It may be noted that the mortgage empowered the complainant, in case of default, to enter the licensed premises “and take and carry away the said goods and'chattels,” as well as to sell and dispose of the same for the best price, &e. This language, in my opinion, cannot be construed to give the complainant an independent power to carry away the certificate without reference to the sale which it was authorized to make. In order to realize the best possible price for such a certificate in connection with the privilege which it evidenced it oftentimes would be necessary that the licensed business should be continued without break. In view of the peculiar subject-matter of this contract I think the power to seize the certificate is limited to the purposes of a sale. There is no power to distrain the certificate and hold it to the inconvenience of the defendants, in order to compel the payment of the debt:

My conclusion is that whether a strict construction of the chattel mortgage is made in favor of the complainant, or what seems to me to be a more equitable construction be adopted, the result is the same. The complainant had no right to take this certificate out of the possession of the defendants for the purpose which it advertised and announced. The complainant never demanded the certificate for the purpose of executing the power of sale according to its terms. The bill of complaint does not pray for any injunction restraining the defendants from interfering with the execution of this power of sale by the complainant, nor is any fact alleged from which it might be inferred that such injunction is necessary.

The defendants, in my opinion, had a right to continue their business under the valuable privilege which had been conferred upon them by the municipal authorities of the city of Bayonne until such time as that privilege might be lawfully transferred, in pursuance of their contract, to some other person for the best price for such transfer which could, with reasonable care and skill, be obtained. The defendants also, for their protection in carrying on this business, had a right to retain the certificate which constituted the evidence of their privilege—the evidence by which they could at all times protect themselves from a criminal charge. Giving the chattel mortgage the most favorable possible construction to the complainant, the defendants were bound to surrender their certificate only for the purpose of enabling the complainant to sell it for the best price that could be obtained. When the complainant demanded possession of the certificate, not for this proper purpose, but for the avowed purpose of selling the same in plain violation of the limitations of its power of sale, to the great injury of the defendants, I think the defendants were justified in refusing such demand. As to the refusal of the defendants to deliver their certificate before the sale was advertised, it should be observed that the sale, in fact, was advertised to be held, and was held, on the defendants’ premises; that, until such sale should be held, the proper place for the certificate would seem to be on the licensed premises; that no refusal of the defendants is alleged to have been made to allow the sale of the certificate on the premises, in pursuance of the power of sale, for the best price that could be obtained. But however the first refusal of the defendants might have been regarded, if the purpose of the complainant in seeking to obtain possession of the certificate had not been disclosed, such purpose was afterwards distinctly disclosed, and, in view of such purpose, equity will give the complainant no aid.

It would seem that the most favorable construction of the instrument which is the basis of the complainant’s rights makes it operate in a dual capacity, viz., as a pledge of the privilege which the defendants held of keeping a beer saloon and restaurant by way of a transfer of such privilege, subject to a condition subsequent or by way of an executory contract in relation to such transfer, and also as a mortgage, in the usual form of a chattel mortgage, of the certificate or piece of paper which evidences the above-mentioned privilege. An argument can certainly be made against making so large a concession to the complainant. But if such concession be made, I do not think that the bill states a case which entitles the complainant to any writ of injunction from this court to aid it in the enforcement of any right under the instrument.

The demurrer should be sustained.