text:
    John Soper v. David H. Bilder.
    [Decided April 19th, 1917.]
    1. Although contracts between attorney and client for contingent fees are sustained by the courts, they will be sustained only to the extent of securing to the attorney a reasonable compensation.
    2. Evidence held to show that the client fully understood the nature of her act in executing a contract for a contingent fee.
    3. - Where property was conveyed to an attorney in pursuance of such a contract, and the client by several acts ratifies the contract, a devisee of such property cannot question such completely executed transaction in the absence of fraud.
    4. The elements which may be considered iiq fixing compensation for legal services considered.
    Oil bill, &C.

      Mr. Donald Leferts and Mr. Peter Baches, for the complainant.

      ill.r. William B. Gourley, for the defendant.'
   Lane, Y. C.

Tlie bill was filed to set aside a deed made by one Mary S.'F. Sisco, now deceased, on December 4th, 1915, conveying to David II. Bilder, the defendant, an attorney and counselor-at-law of this state, an undivided one-third interest in the premises particularly described in the bill, located in Lodi, in Bergen county. Prior to November 24th, 1914, Mary S. F. Sisco had been a defendant in a suit pending in this court brought by Mary Soper, her mother, to set aside a deed made by Mary Soper to Mary S. F. Sisco on March 30th, 1897, covering the same property referred to in the Bilder deed. 'This deed contains a provision requiring the daughter' to support the mother during her life. From 1897, to a short time before the filing of the bill, in August, 1913, the • daughter had supported the mother, who at the time of filing the bill was ninety-two years old, and had spent considerable sums of money on the property. The case came on for hearing before an advisory master; some four hundred pages of testimony were taken. The advisory master found against the defendants, and a decree was made, setting aside the deed without any provision for reimbursement to the defendants of the moneys expended by them. After the decree had been signed the cause was allowed to sleep for some time, and then proceedings were taken against Mary S. F. Sisco, for contempt in failing to comply with the decree which had directed her to reconvey. the premises. At that juncture, and on or about November 24th, 1914, Mary S. F. Sisco came in contact with the defendant, David H. Bilder, with a view to retain him in her difficulty. He advised with her and made an examination of the record. From his examination he discovered that the Us pendens had been filed before the bill, with the result that, although more than three months had elapsed since the making of the decree, there was no question but that an appeal could be taken. Bilder advised an appeal. Her previous counsel had advised in writing against it. On November 30th, 1914, an order of substitution was made. Bilder had received $100 on November 22d, 1914, for services in the contempt matter. On December 9th, 1914, an agreement was made between Mrs. Sisco and Bilder & Bilder, attorneys, of which firm David H. Bilder was a member, providing, substantially, that Bilder & Bilder would take such proceedings as might seem necessary or proper for the protection of the rights of Mrs. Sisco in the court of errois and appeals, also in the contempt proceedings and in an ejectment suit then pending in the supreme court; that as compensation Bilder & Bilder should be entitled to receive a sum equal to one-third of any and all recovery which Mrs. Sisco or her husband should be awarded or receive, in the premises either by suit, settlement, compromise, or otherwise, and that in the event that the deeds of conveyance made by Mary Soper to Mrs. Sisco should not be set aside or declared invalid, then that Bilder & Bilder should receive one-third of the value of the- lands conveyed by Mary Soper to Mrs. Sisco, said one-third to be computed upon the value of said land as the same should be at the time of the said determination. In ease of non-success, Bilder & Bilder were to receive nothing. The disbursements for printing on appeal, and the deposit required upon appeal, were to be paid by Mrs. Sisco and her husband. The agreement is acknowledged and testimony given by the master before whom it was acknowledged is to the effect that the agreement was read over and explained to Mrs. Sisco and her husband before they signed and acknowledged it. Counsel then prepared the very voluminous petition of appeal that was filed, and also briefs. His original brief and • brief in reply consists approximately of sixty pages; the brief of the respondent of seventy pages. # The briefs indicate upon their face work of the highest standard. On March 23d, 1915, the cause was submitted to the court of errors and appeals on briefs. It was decided, on November 15th, 1915, in favor of Mrs. Sisco in an opinion delivered .by Mr. Justice Trenchard (85 N. J. Eq. 165). The opinion covets some ten pages of the report. Nine judges voted to reverse; five to affirm. Whatever my personal opinion may be as to the apparent equity of Mrs. Sisco, at least for reimbursement for moneys which she had advanced upon the faith of the deed, the conclusions of the advisory master and the opinion of the court of errors and appeals, and the fact that five judges dissented, indicates beyond cavil that the case was most difficult, and that Mrs. Sisco when she came to Bilder & Bilder was in a desperate position. This very fact, of, course, increased the burden of the duty upon the defendant toward the client. The necessity could not be availed of to get from her an unconscionable contract. The situation demanded the very highest quality of legal ability and most assiduous application, and it received both to a marked degree. Upon learning of the determination of the court of errors and appeals the Siscos telegraphed counsel congratulating them. On December 4th, 1915, Mrs. Sisco and her husband, in pursuance of' the agreement of settlement, and to recompense counsel, made the deed now in question. The master before whom this deed was executed testifies that Mrs. Sisco understood fully what she was doing. On March 8th, 1916; Mrs. Sisco executed her last will and testament, naming David H. Bilder as executor, and the preserit- complainant residuary legatee and devisee. ' On April 5th, 1916;-and while Mrs. Sisco was confined to the hospital at Passaic during her last illness, the deed was recorded. On May 31st, 1916, she died, and on August 4th, 1916, the present bill was filed. After the determination of the court of errors and appeals there- were further hearings before the advisory master for the purpose of fixing the amount which should be paid by the Siscos for'-the support and maintenance of the complainant, Soper, which'she should have previously received, and also for' fixture 'support: There were at least two formal hearings before the advisory master. Most excellent briefs were submitted. The result was that the amount asked by the complainants, which was. in the neighborhood, I think, of $4,000, was reduced to approximately $1,800, and the amount of future support asked for, to wit, $25: was reduced to $10. Mrs. Soper then died. An order exhbody*. ing the conclusions of the advisory master was entered after the death of-Mrs. Sisco, without reviving the cause, nunc pro tunc, as of the clay of the argument. A copy of the contingent agreement was found among the papers of Mrs. Sisco. There' -is! no proof that at the time of the making of' thé contract ■ fop compensation Mrs. Sisco was under any physical or mental' disability. Indeed, the complaint derives his title through :a will made three months after the deed was executed. The-ease is absolute^ barren of proof that any misrepresentations as to her-rights or as to the value of the property were made to her. It is'conceded bj' the defendant that the property is worth in' the neighborhood of $12,000. ' It is claimed by the coinplainant, and he is supported by the testimony of one witness; that-it is worth in the neighborhood of $18,000. Two witnesses for the defendant substantiate the twelve-thousand-dollar valuation. It is probable that the real value lies somewhere between the two extremes. But in my view of the case it is not necessary for me to determine precisely its actxxal valixe:

The property is unimproved, in the small borough' of Lodi'; there is no evidence of a present demand for it. .It will have to be improved, filled in before, it can be made of use. • The amount which may finally be received for it is highly problematical. ' . '

Contracts which provide that an attorney should receive a certain proportion of the proceeds of litigation where, as in this case, the-amount to be received cannot be approximated, and in case of fáilure' should receive nothing, are to be most strongly, in my opinion, condemned, and I think that it is immaterial whether the agreement was made before or after the technical relation of attorney and client began, notwithstanding the inference that might be drawn to the contrary from the language of Vice-Chancellor Pitney in Adams v. Schmitt, 68 N. J. Eq. (at p. 178). The’ evils to which such contracts lead far outweigh any advantage which there may be in permitting them. The m'oinent an attorney enters into a contract of this kind he ceases to be in a position where it can be said that he can in all- cases properly advise--his client. I will point out but one example. If a proposition of settlement is made of a doubtful claim it may be highly to the interest of the cliént to compromise. The attorney, on the other hand, gambling not with his own property, but merely interested to the extent of his services, may think it highly desirable that the cause should be prosecuted with a view to getting a larger amount for his services, and, as in some cases which have come to my knowledge, the client may finally lose his entire property, which he cannot afford to do, and the attorney merely the value of his services, which, presumedly, he can afford-to lose else he'never would have entered into such a contract. On the contrary, it may be highly desirable from the client’s standpoint that the cause should be prosecuted to determination, and the attorney may think it advisable from his standpoint, in order to immediately reap the. reward of his contract to settle. I am not intimating that there was any such condition in this case. What I say is that tire possibility of such a situation arising is such that by entering into such a contract the attorney puts himself in a position where he can no longer act as he should,'solely with a view to the interest of his client. There is no one thing that has more strongly tended to get the bar in disrepute with the general public than this class of contracts. Such contracts, however, have been sustained by the courts of this state. Hassell v. VanHouten, 39 N. J. Eq. 105 (at p. 109); Wilson v. Seeber, 72 N. J. Eq. 523. From a consideration, however, .of Lynde v. Lynde, 64 N. J. Eq. (at p. 749); Brown v. Bulkley, 14 N. J. Eq. (at p. 458); Crocheron v. Savage, 75 N. J. Eq. 598; Porter v. Bergen, 54 N. J. Eq. 405; Wagner v. Phillips, 78 N. J. Eq. 33; Johnston v. Reilly, 68 N. J. Eq. (at p. 150), it seems to me that upon such an agreement being called in question by a client it will be sustained only to the extent’ of , securing to the attorney reasonable compensation under all the circumstances of the case, which is but another way of saying that the contract under such circumstances will be entirely disregarded. In computing what is reasonable compensation many elements must be taken into account. There is no yardstick by which the value of legal services can be measured; no rate per diem or j>ercentages can be employed with justice to both parties." The'legal ability of the attorney, the amount of work which he does, the skill with which he does it, and, of much importance, the amount involved, and the success of his efforts. There may also be considered the contingency that in case he is ■unsuccessful he will receive nothing, and the fact, if it be a fact, that the fund was created through the efforts of the attorney.

I have already commented upon the circumstances surrounding this particular case. As I construe the contract, and the deed must be considered as merely carrying into effect the provisions of the contract under it, if it i>e valid, the attorney is entitled to one-third the value of the property after deducting all the costs of litigation, approximately six or seven hundred dollars which have been paid by Mrs. Sisco, the amount which Mrs. Sisco was decreed to pay to Mrs. Soper, and, if Mrs. Soper liad lived, an amount equal to the present value of the future payments which Mrs. Sisco had to make for the 'support and maintenance of Mrs. Soper, for it is this net amount which represents the net avails to Mrs. Sisco. I think the intent was that the one-tliird should be of the net avails. The result will be, therefore, that the attorney at some future time when this property is sold may receive something in the neighborhood of between $3,000 and $3,500 if the properly be worth $12,000; -that he taires his chance on receiving it in this method must also enter into consideration.

I am not obliged, I think, to determine what action this-court would take upon such a contract if it were questioned by the client. Clients have a right to make contracts with their attorneys; they have a right to make gifts to their attorneys. Originally, compensation of counsel was by way of gift. Such contracts will be scrutinized with great care, but if it fairly appears that the client voluntarily and intentionally made such a contract there is no reason why it should not Ire sustained, certainly as against all except the client, unless peculiar circumstances exist Mrs. Sisco had the absolute power to do what she did do. Is it to be presumed that were she alive now that she would repudiate? In the face of the circumstances here existing, I would have to find that the amount which the attorney will receive is so far in excess of any reasonable amount which he could demand that it is to be conclusively presumed that had the client understood tire circumstances she never would have made the contract; that it results in such an over-reaching as that she cannot be presumed to have intended it, or that there was some fraud, or that she would not have made it except induced by her precarious condition, coupled with her inability to pay cash, or that had she been able to pay cash she would have preferred to pay reasonable compensation rather than to enter into such a contract. I do not think I am justified in so finding. That Mrs. Sisco fully understood the effect of what she was doing I think is demonstrated by the testimony. She ratified the contract more than a year after its making, by delivering the deed. She reaffirmed her confidence in Bilder and her acquiescence in what had been done by three months after the making of the deed, making her will in which she made Bilder her executor. She kept the contract among her papers, indicating clearly that there was no concealment, and that she knew what had been done. Under the circumstances, I do not think that' it lies in the mouth of the present complainant who obtained his title by gift of his sister to question this completely executed transaction. I do not want to be understood as holding that the court will not in any case after the death of a client examine such contracts. If there was any evidence indicating that during her life Mrs. Sisco had expressed dissatisfaction, or that there was the least concealment or over-reaching, and if there was not the positive evidence of ratification, the case might be different. Each case must be determined on its own facts. ■

Counsel for the complainant suggests a compensation of $500 would be adequate in a case of this kind. I think not, even if the client was able and willing to pay cash. The services were worth much more than any such sum, and I do not think that the difference between their fair value and the amount that the attorney is to receive is so great as to practically create the presumption of fraud.

I will advise a decree declining to set the deed aside, but the pleadings may be so framed as to permit a decree defining the rights of tire attorney under the deed as I have herein expressed. Fo costs to either side.


source: Caselaw Access Project

author: Lane, Y. C.

license: Public Domain

text:
    Alfred Hugo Posselt et al. v. R. Seabury D’Espard et al.
    [Decided April 21st, 1917.]
    1. In view of the express terms of the president’s proclamation declaring the existence of a state of war with the German government, a suit for injunction by an individual complainant, a subject of Germany, resident in the United1 States, who has taken out -his first naturalization papers, and by a German corporation, against persons charged with having deliberately set about to wreck a New Jersey corporation wherein complainant held stock, will not be stayed on the ground of alien enemy.
    2. The treatment to be accorded alien enemies and their property within this country during a state of war, is purely a matter of public policy to be established bj' the proper executive and legislative governmental authorities.

      On bill. On order to show cause.

      Messrs. Lintott, Kahrs & Young {Mr. Joseph KaJirs), for the complainants.

      Mr. Randolph P whins, for the defendants.
   Lane, Y. C.

A preliminary objection is made to the' prosecution of the cause upon the ground that the complainants are’ alien enemies. The facts are conceded. The individual complainant is a subject of Germany, resident in this country, and has taken out his ■first papers. The corporation complainant is a subject of, and resident in, Germany. The bill is for the preservation of the rights of the complainants as stockholders in a Now Jersey corporation and also in the interest of the New Jersey corporation for the protection of its rights against the action of the defendants. The German corporation is a majority stockholder, practically the owner, of the New Jersey corporation. The charge is that the. defendants have deliberately’set about to wreck the New Jersey corporation. No money decree is prayed for. If I should deny relief upon the ground stated by the defendants, then the property of alien enemies within this country,, acquired in time of peace, may be ruthlessly taken away from them, not by the government, but by individuals, subject only to -the restraint of criminal law. I am familiar, of course, with the very many learned opinions of publicists of other days, and also with the opinions of the supreme court of the United States, but I think that at this time to attempt to consider them in detail would unduly extend this opinion, and, in the view that I take of the present situation, would he wholly unwarranted. The right of government to confiscate property of alien enemies and close the doors of its courts to them, whether resident here or elsewhere, may be conceded. Whether that right is to be exercised is a matter of policy. The modern trend is to ■ discourage interference with property rights, ,whether of' friends or enemies, in time of war, except so far as may be necessary to effectively accomplish the objects of the war. The solution of tlie problem now before me, I think, is found in the president’s message to congress, which, in view of the nature of its reception by congress and the action of congress under it, has'become the voice of the country; and the president’s proclamation declaring a state of war and defining rights of residents, an official act under authority of congress. German residents who comply with needful regulations, and who properly conduct themselves, are assured that they will be undisturbed .in the peaceful pursuit of their lives and occupations and be accorded the consideration due to all peaceful and law-abiding persons, except so far as restrictions may be necessary for their own protection and for the safety of the United States. To shut, the door of the court in the face of an alien enemy resident here would be a distinct violation of not only the spirit bu.t the letter of this proclamation.

With respect to the alien enemy resident in Germany the situation is somewhat different, but I think not essentially so. The president has very carefully distinguished between the German government and the German people, and the sins of that government ought not to be visited upon the people except so far as the legitimate interests of the United States require. I am convinced that there is no interest of the United States which requires the court, in advance of a definite command by the constituted authorities, to refuse to protect, at their instance, the rights of alien enemies resident abroad in property in this country. If'it be said that this is in conflict with certain prior decisions, the answer is that the solution of the question depends upon public policy, and while it is not the function of the court to establish a public policy, it is the function and the duty of the court to .determine, as a matter of fact, what the policy actually is, and it is the policy of the present day, not that of some years ago, that must be determined. Tolerance is the keynote of the president’s proclamation, and by that I am bound. If the contention is made that to permit alien enemies resident abroad to sue in our courts would be to lend aid and comfort to the enemy, I think the answer is that either the court or the government may so act as to prevent any property coming into the possession of the enemy. I am unwilling to conceive that either the government or the courts are powerless to prevent aid and comfort being given to the enemy without exercising the drastic power of refusing absolutely at the instance of an alien enemy to protect property rights within this country. I think the doors of the court are still open to all persons who properly behave themselves.

The result is that the motion to stay the prosecution of this cause on the ground of alien enemy will be denied.


text:
    Alfred Hugo Posselt et al. v. R. Seabury D’Espard et al. R. Seabury D’Espard et al. v. Fritz Schulz Junior Company.
    [Decided June 21st, 1917.]
    1. Under the peculiar circumstances of this case, Held, that a receiver should be appointed under general equity powers to run the business and protect the property.
    2. Where a state of war exists, and it is necessary for alien enemies to appeal to a court of equity to protect their interests in a domestic corporation, all the stock of which is owned by alien enemies, the court will not by the exercise of its injunctive powers turn over sole control to the representatives of the alien enemies, but will, where there is p. dispute as to who are legally directors and officers, appoint a receiver under its general equity powers to run the business and protect the property.
    3. It is the duty of a court of equity during a state of war in granting-relief to alien enemies, to see to it that the effect of the relief will not be to permit the transfer of property to an enemy country, or to lend aid or comfort to the enemy.

      On bill, &c.

      Mr. Randolph Purlins, for B. Seabury D’Espard and "William Howard Hoople.
    . Mr. Joseph Kahrs, for Alfred Hugo Posselt, Fritz Junior Aktien Gesselschaft and Fritz Schulz Junior Company.

      Mr. Randolph Perkins, for the complainants.

      Mr. Joseph Kahrs, for the defendant.
   Lane, Y. C.

(orally).

I am going to decide the case of D’Espard v. Fritz Schulz Junior Co., on application for appointment of a receiver.

The following- facts appear: In October, 1905, the company was incorporated under the laws of this state for the purpose of manufacturing a. metal polish. The capital stock was owned wholly by a German corporation. No money was invested except that invested by the German concern. At that time the German company had a sales agreement with a company known as Raimes & Company, Ld., of London. The purpose of 'the incorporation of the Fritz Schulz Junior Company in this country was to avoid the necessity of transferring the manufactured product from Germany here. The Fritz Schulz Junior Company entered into a sales agreement with a company in New York, a concern incorporated by Raimes & Company, Ld., of London, for the purpose of acting in this country in the same manner as Raimes & Company, Ld., acted in Europe. The relations then existing between Raimes & Company and the German corporation were extremely friendly. The board of directors of the Fritz Schulz Junior Company consisted, I think, of three Germans and two representatives of Raimes & Company. The directors held one share of stock each, but were pure dummies.

At the outbreak of the war, in 1914, the rights of the German concern in England were by act of parliament forfeited and were taken over by Eaimes & Company of London, Ld. When there was prospect of war between this country and Germany, I think the conclusion is irresistible that the directors of the Fritz Schulz Junior Company, who were, or had been, representatives of Eaimes &, Company of New York, conceived the idea that in view of'the absence in Germany of one or two of the German directors of coirsummating lawlessly in this country what is said to have been permitted by law in England. They thought that the time was opportune to take over the property of the Fritz Schulz Junior Conrpa'ny in this country, not, however, for the benefit of the government, but for the benefit of themselves. They attempted to do this by going to the, office^ of the company in Lincoln, New Jersey, where the general manager, who was the resident director representing the German concern, then was, and finding him there calling a meeting of the board of directors of the Fritz Schulz Junior Company and proceeding to oust the representative of the German concern as general manager and as an officer of the company, and substituting officers of their own selection. They then directed the discontinuance of a suit which had been brought by the Fritz Schulz-Junior Company against Eaimes & Company in New York for breach of contract. They were defeated in this in the New York courts and a judgment was obtained for something like $8,000. That judgment has not yet been collected. The assets of Eaimes & Company, I understand, have been put in such shape as to make it difficult of collection. In that situation the resident representative of the German companjr ajipealed to this court for an injunction restraining the two directors representing Eaimes & Company from acting as directors and officers, upon the ground that théy had committed a breach of trust. The original bill prayed for the appointment of a receiver; subsequently, an amended bill was filed in which the prayer for the appointment -of a receiver was omitted. I advised the injunction. The two American directors then filed a bill praying for the appointment of a receiver upon the ground that the Fritz Schulz Junior Company had no board of directors competent to act, and it is upon that bill that the present application has been made.

There is no doubt but that the company at this time has no proper board of directors. The one director who really represents the stockholders is the ■ general manager of the concern who was ousted by the vote of the two American directors. I think that the two other German directors are now in Germany and cannot get here. That leaves the three directors in this country—one who really represents stockholders and two who really represent antagonistic interests. Because'of the apparent legality on its face of the meeting of-the directors which ousted the representative- of the German company from control, it is necessary that this court should intervene for the protection of the interests of the company. The effect of my injunction will be practically to permit the concern to be run by one director, and he not a citizen of this country. I am unwilling to permit such a situation to exist. The appointment of a receiver is resisted by the' representatives of the German interests. I think that it is not only in the interest of the German company that a receiver should be appointed, but that it is absolutely necessary for the conseiwation of the property of the company. It has been suggested that they would like to take their chances. They have the utmost confidence that if I enjoin the directors from acting that the one German (I think it is now said he is Austrian) director here would be able to continue business in the same manner as it has been continued. I can see that if I permit this it will only lead to endless litigation in other courts, and that it is. really contrary to the interest of the German stockholders. Nor do I think that this court is justified, where a situation exists such as this in which the aid of this court must be obtained in order to protect the interests of alien enemies, and in which this court has undoubted jurisdiction to appoint a receiver, in granting the relief-to the alien enemies without also going further, and seeing to it' that the • effect of the relief granted will not be to permit the transfer of property from this country to an alien enemy.

I will appoint the present general manager as a receiver under a bond of $25,000, and will associate with him as receiver Edwin Maxson, of Summit, .under a bond of $25,000. The active management of the company until further orders will be in charge of the first receiver mentioned. The duty of Mr. Maxson will be supervisory. •

- I also on my own motion will make an order consolidating ■these two causes. It is understood that the appointment of a. receiver is not an appointment under the statute; it is a pure equity receivership and will be continued only so long as the company shall be without a board of directors competent to act, or so-long as the exigencies of the occasion require. The busi- ■ ness will be directed to be carried on. Debts as they accrue will b.e paid. The business of the company is not to be interfered within the slightest degree.


author: Lane, V. C.

text:
    Mathias J. Price v. Emily A. Long et al.
    [Decided May 11th, 1917.]
    1. The court of chancery may, in an emergency, order the conversion of trust assets, not authorized' 'by the trust instrument, or contemplated by the maker thereof.
    2. Under the facts in this case the offer of $400 a share for the stock of the Long & Koch Company should be accepted.
    On bill.

      Messrs. Linddbury, Eepue & Faulks (Mr. Frederic J. Faulles),, for the complainant.

      Messi's. Gortlandt & Wayne Parker {Mr. Gortlandt Parker), for the defendants Walter L. Long and others.

      Messrs. Lupi, Tamblyn & Golyer {Mr. Ernest Lum), for the defendants Emily A. Long and Fred W. Taylor,- as trustee.
   Lane, V. C.

Philip II. Long died on December 9th, 1908. Under his will he gave to his executors and trustees, .Frederick W. Taylor and Mathias J. Price, sixty-five shares of stock of the Long & Koch Company, to be held by them in trust for a period of twenty-five years. The income or dividends from twenty-seven and a half shares of such stock is to be paid to his wife, Emily A. Long, so long as she lived; if she dies prior to the expiration of the twenty-filve years, then the income on such twenty-seven and a half shares is to be paid to her brother Edmund Taylor, a sister, Kate Prosser, and her sister-in-law Mrs. Emily Taylor, and such of her nephews'and nieces as shall be living at the time of her death, except that if her nephew Harry E. J. Taylor should predecease her, the share that he would be entitled to if living is to be paid to his wife and children. The income on the remaining thirty-seven and a half shares is to be divided equally between testator’s two brothers, Frederick T. Long and Walter L. Long, and such of testator’s nephews and nieces as shall be living at the time of testator’s death, and his cousin Philip J. Long also is to share in the income so long as he shall remain an employe of the company. At the end of twenty-five years the said sixty-five shares of stock is to be sold and disposed of, certain relatives having the first right to purchase. The proceeds are to be divided among certain charities and among certain relatives. Some of the beneficiaries are at this time unascertained; the residences of those that have been ascertained are widely scattered in this country and abroad; some are infants.

The Long & Koch Company is a manufacturing concern founded by Philip Long and to which he gave his attention up to the-time of his death. Its chief business is the making of cheap jewelry, with a very small margin of profit. During the life of Mr. Long it was extremely successful, and for a few years after his death continued to be. Its dividends for several successive year’s were as follows: 1904, eighty per cent.; 1905, one hundred per cent.; 1906, one hundred and thirty per cent.; 1907, one hundred and seventy-five per cent.; 1908, one hundred per cent.; from 1908 to 1912, one hundred per cent. In 1913, the dividends were reduced to fifty per cent.; in 1914, further reduced to twenty per cent.; and since 1914, no divi'dends have been declared. The testimony is to the effect that, although a dividend may be declared for the year 1911, it will be small. The corporation is a close corporation; it has but one hundred and fifty shares of stock. Of this the estate holds sixty-five; Mrs. Emily Long, ten; Julius Koch, seventy-four; Mrs. Koch, one. The control is 'evenly divided between the Koch and the Long interests. Mr. Koch is now at the head of the concern, and Frederick W. Taylor, one of the trustees, is emploj^ed by the coloration at a salary.

The reason for the decline of the business is attributed to two sources—first, the loss of Mr. Long; whose genius had built up the business; second, the general depression in the jewelry trade. The book value of the stock is in excess of $1',000 a share. Mr. Koch has offered to buy out the interest of the estate at a price óf $400 a share.’ Frederick W. Taylor, one of the trustees, is against the acceptance of the offer, whereas Mr. Price, the other trustee, considers it not only advisable in the interest of the estate, but necessarj; if great loss is not to be sustained, that the offer be accepted. He, therefore, brings this bill asking this court to direct the sale, and malee parties.all persons whom he knows to have an interest in the estate. The application is resisted by certain of those entitled to income, among them the widow, and also by the co-trustee. Many of the parties have not appeared. The answering defendants, while admitting that because of the uncertainty attending the present investment it may be desirable that the stock be sold, yet insist that the price is not adequate and raise by their answers the question of the power of the court in the premises. Mr. Price is in nowise connected with the company, and he takes the position that it is his duty to bring the situation to the attention of the court. The attitude of Mr. Taylor is unconsciously affected by the fact that 'a sale of the stock may mean the loss of his -position with the company, and will,' unquestionably, lead to the loss' of the influence which he now enjoys. While the book-value of the stock is in excess of a thousand 'dollars, it is impossible to sell i't to anyone except Mr. Koch for any reasonable figure. Mr. Taylor frankly concedes this. Koch says $400, considering all of the circumstances, is about fair value of the stock, and I think that under all the circumstances it is. Counsel for the. complainant furnished me memoranda of the cases on both sides of the question, and I have considered them.

Chancellor Eunyon, in Fidelity Company v. United Company, 36 N. J. Eq. 405 (at p. 408), says: “It is the rule that the directions for investment contained in .an instrument of •trust are imperatively obligatory on the trustee; but by the direction of a competent court he may depart from them. The court, however, should exercise its authority only in view of the existence of a necessity. The power of this court to abrogate or annul any of the terms of the before-mentioned agreements should not be exercised except for clear and cog'ent reasons, and with full opportunity to the parties who are to be affected by such action to he heard.”

Chancellor Yroom had said, in Oliver v. Oliver, 3 N. J. Eq. 368 (at p. 373) : “One thing is certain, this court will not interfere with the appropriation of this trust fund, or direct it differently from the intention of the testator except in a very clear case.”

In Dodd v. Una, 40 N. J. Eq. 672, the court of errors and appeals held that this court had no power to. impose its view upon the method in which the funds of a savings bank was to be dealt with where the details were specified by statute. In Lister v. Weeks, 61 N. J. Eq. 623, the court of errors and appeals sustained an order made by the court of chancery directing a certain investment to be changed, but put its decision upon the ground that the parties in interest, especially the appellants, had consented to it and could, not thereafter withdraw their assent. The power of the court of chancery in the exercise of its general administrative jurisdiction to sanction or direct trustees to perform acts contrary to the provision of an instrument of trust where there arises an emergency or a state of circumstances which it may reasonably be supposed was not foreseen or anticipated by the author of the trust, and is unprovided for by the trust instrument, and which renders it desirable and perhaps even essential in the interest of the beneficiaries that such act should be done, has been sustained in England in the cases of In re New et al. (1901), 2 Ch. Div. 534; In re Tollemache (1903), 1 Ch. Div. 955. In the first case, Bomer, J., said: “The principle seems to be this—that the court may, on an emergency, do something not authorized by the trust. It has no general power to interfere with or disregard the trust; but there are cases where the court has gone beyond the express provisions of the trust instrument, cases of emergency, cases not foreseen or provided for by the author of the trust, where the circumstances require that something should be done,” and, further, “it is impossible, and no attempt ought to be made to state or define all the circumstances under which, or the extent to which, the court will exercise the jurisdiction; but it need scarcely be'said that the court will not be justified in the sanctioning of>e'ypry act desired by the trustees and beneficiaries merely because it may appear beneficial to the estate; and certainly'the court will not be- disposed to sanction transactions of a speculative or risky character.”

I have grave doubt as to‘the power of this court, but because of the existence, I think, of the present emergency, and the fact that if I should decline to exercise jurisdiction, the applying trustee will have performed his duty and there will 'probably be no review by the court of errors and appeals, whereas if I exercise jurisdiction the present defendants will have the opportunity to appeal, and the matter may be pas§ed upon by that court, I am going to resolve the doubt as to jurisdiction in favor of the complainant. The situation is such that I cannot assume responsibility for the continuance of this investment in this stock. Not only has the business of the company suffered seriously because of the loss of Mr. Long, and the general depression in the business, to such an extent that its dividends have been reduced from one hundred and seventy-five per cent, per year to nil, a condition which I think was not in the contemplation of the testator, although it may be said that he must be presumed to have contemplated it; but a world war has, since his death, broken out, in which this country has now become involved, a condition- which he certainly did not contemplate, and which, I think, it is not to be presumed he contemplated. As a matter of fact, no one contemplated it, except, possibly, the governmental authorities of Germany. It is impossible to determine how long the war will last or what its consequences will be or what the conditions will be upon a readjustment after its close. It must have a disastrous affect upon such businesses as' that carried on by the Long & Koch Company, manufacturing, as I before stated, cheap jewelry at a very narrow margin of profit. Coming on the heels of the condition created by the loss of Mr. Long, and the general depression in the jewelry business, it may have a very disastrous effect upon the business of Long & Koch. It should also be kept in mind that the control of the .business is equally divided between the Koch and the Long interests, and this equal division must inevitably, if the business continues to lose money, lead to discord within the company itself. Under the circumstances, I think that the offer of $100 a share is á fair one; that it should be accepted, notwithstanding the opposition of the co-trustee and of certain other beneficiaries.- Indeed, the co-trustee and the beneficiaries appearing concede in their answers, and conceded on the oral hearing, that it was advisable that the stock should be sold. The only question was the question of price. They all conceded that no more could be obtained. Dissolution cannot be forced. Unless this offer is accepted it seems to me that this risky investment must be continued.

I will advise a decree permitting and directing the sale of the stock at $100 a share, and at the foot of the decree application may be made for instructions as to the investment :of the proceeds. Settle the decree on one day’s notice.


text:
    Edna S. Wilson and William C. Wilson, her husband, et al. v. George L. Vogel.
    [Decided May 19th, 1917.]
    1.. A court of equity will not. decree specific performance where doubt as to -the vendor’s power to convey a good title arises in ascertaining the true construction and' legal operation of an instrument.
    2. A devise to two daughters, their heirs and assigns, share and share alike, but if either die without issue and intestate her share shall go to the survivor, presents.a question not free from doubt as to the devolution of the property, and therefore specific performance will not be decreed! upon a deed signed by both daughters and releases of the powers of disposition.
    3. Qucore: Is the estate a life estate with power of testamentary disposition, or a fee defeasible upon the happening of the contingency?
    On bill, &c.

      Messrs. Riher & Riher, for the complainants.

      Mr. Arthur R. Denman, for the defendant.
   Lane, Y. C.

This is the familiar friendly suit in specific performance to determine the validity of a title. The conclusions I have reached renders it unnecessary for me to express an opinion as to whether the title is valid or not. Complainants derive their title from Esther C. Shelby,- their mother. The will, so far as material, provides as follows:

“I give, devise and bequeath to my said daughter Edna D. and my said daughter Mabel E., their heirs and assigns to be divided between them, share and share alike [the property in question and also certain personal property]. * * * In case either of my said daughters dies without issue, and intestate, her share in said house lots and stable and contents thereof shall go, to the- survivor.”

A deed has been tendered, signed by Edna L. Wilson and Mabel E. Eeleases of the powers of disposition have also been duty executed by them and their husbands to each other and tendered. The sole .question is whether the complainants can with the aid of such releases convey an estate in fee-simple to the defendant. The residue of the estate is to be held by trustees, not only for the benefit of the two daughters and their issue, but also a son. The rule appears to be settled that if a doubt raised depends upon a question involving the application of general principles of law, it is the practice of courts of equity to decide the point of law in a suit for specific performance, but that in such cases specific performance should not be decreed if there is reasonable ground for saying that the question is not settled by previous decisions, or if there are dicta of weight which indicates that courts might differ as to the determination of the point involved, and that one of the categories in which the courts decline to compel specific performance is where the doubt as to the vendor’s power to convey a good title arises in ascertaining the true construction and legal operation of some ill-expressed and inartificial instrument. This is almost precisely the language of Vice-Chancellor Grey in Richards v. Knight, 64 N. J. Eq. 196, and see Lippincott v. Wikoff, 54 N. J. Eq. 107, and Fahy v. Cavanagh, 59 N. J. Eq. 278. I have reached the conclusion that no construction which I can put upon this clause of the will is so free from doubt as to warrant this court in dedreeing specific performance. The contention of the respective parties is, the complainant, that the devise creates- a fee-simple defeasible upon the first taker ctying without issue, and intestate, in which event the executory devise over would operate, and that the executory devisee being in esse and ascertained she may join in the deed and thereby transfer her interest, and that the testamentary power of disposal being a power in gross may be released and the result is a good title; the defendant, that, under the determination of the court of errors and appeals, in Kellers v. Kellers, 80 N. J. Eq. 441; Cantine v. Brown, 46 N. J. Law 599, and Kent v. Armstrong, 6 N. J. Eq. 637, the devise is that of a life estate only with a power of testamentary disposition, and that inasmuch as the estate is one for life only, if the first taker dies without issue and intestate, then the executory devise over would operate, and that if she dies with issue either the issue will take or the estate will fall into the residue of first testatorls estate. Defendant further contends that in view of Thompson's Executors v. Norris, in the court of errors and appeals, 20 N. J. Eq. 489, that there is at least dictum in this state which would indicate that the power of disposal is not such a power in gross as may be released, with the result that the first taker might, notwithstanding her release, subsequently exercise her power of disposition by will. If the case of Kent v. Armstrong is to be given full force and effect, then there is no doubt but that the estate created by this will is a life estate only. It is said that the force of the case is weakened because it rests, to some extent at least, upon the fact that the effect of the words “should die without heirs” was to create at common law a fee tail and under our law a life estate at the time of the decision, but that subsequent to that case, in 1851, a statute was passed (4 Comp. Slat. (1910), Will, p. 5870 27) which provides that in any devise or bequest of real or personal estate the words “die without issue” or “die without lawful issue” or “have no issue” shall be construed to mean a want or failure of issue, in the lifetime or at the death of such person, and not an indefinite failure of issue, unless a contrary intention should otherwise appear by the will, and that this statute has been considered in numerous cases, among others, Patterson v. Madden, 54 N. J. Eq. 714; Brazzale v. Diehm, 86 N. J. Law 276; Dean v. Nutley, 70 N. J. Law 217; Steward v. Knight, 62 N. J. Eq. 232; Vreeland v. Blauvelt, 23 N. J. Eq. 483; Dilts v. Clayhaunce, 70 N. J. Eq. 10; Condict v. King, 13 N. J. Eq. 375; Davis, Administrator, v. Steel, Administrator, 38 N. J. Eq. 168; McDowell v. Stiger, 58 N. J. Eq. 125, and that such cases construe the statute as creating in the first taker a vested but defeasible fee-simple estate the condition of the defeasance being the occurrence of the devisee dying without issue.. Cantine v. Brown, 46 N. J. Law 599, was decided, however, by the' court of errors and appeals subsequent to the passage of this statute. There the devise was to three daughters, their heirs and assigns, with a proviso that in case one should remain unmarried and should make no disposition of her estate by will, her share should at her death be equally divided among her sisters, and the court of errors and appeals said: “The question presented is whether under that devise she takes a fee or merely a life estate with power of testamentary disposition of the property. The decision of this court, in Kent v. Armstrong, 2 Hal. Ch. 637, disposes of the question.” Again, the court of errors and appeals, in Kellers v. Kellers, 80 N. J. Eq. 441, where the devise was to testator’s wife, her heirs and assigns, and should she acquire the estate and die without making a will, then that his will should operate and his estate be divided between his children as therein provided, said, again, quoting Kent v. Armstrong: “It was held in that case that the primary devisee took a life estate only, with a power of testamentary disposition, and that in the event of her dying intestate the executory devise over became operative. Thirty-five years later we again had before us, in the case of Ccmtine v. Brown, supra, the question of the construction of a devise similar to that under scrutiny in Kent v. Armstrong, and declared that the decision in the earlier case must be regarded as the law of construction in this state on such devises.” If the estate taken by the first taker is merely a life estate, then if she dies with issue but intestate it would seem that either the issue take by implication or the property falls into the residue of the testator’s estate. This result might be avoided by holding that the first taker took a fee defeasible upon the happening of .the contingencrq and I might be inclined, if the matter was novel, to so hold, but I cannot conceive that such a holding would be so free from doubt as to permit me to require specific performance. The court of errors and appeals must have given some effect to the words “and intestate” in determining the nature of the estate created.

So, with respect to the po-wer 'to release the right of testamentary disposition. I have considered the numerous cases cited by the complainant, and Norris v. Thomson’s Executors, 19 N. J. Eq. 307, in the court of chancery, and Thomson’s Executors v. Norris, supra (at p. 524). Chief-Justice Beasley, in the latter case, said that “I have not found any ease in which it was maintained the power to appoint to 'strangers after the expiration of an interest given to the donee of the power was a power in gross.” There was in existence at that time Albany’s Case, 1 Coke 110 D; 76 Eng. Reprint 250, which has been cited in the case below by the chancellor. To the same effect is Smith v. Death, 56 Eng. Reprint 937. In Grosvenor v. Bowen, 10 Atl. Rep. 589, there was a bill for specific performance, the question of title being raised under a will which gave property to A for life, on his decease to such person as he might appoint by his will, and in default of such appointment to the heirs of testatrix; it was held that he might 'release his power to appoint to the tenants in remainder or to extinguish it by joining with the other complainants in a deed conveying the bargained lot to the defendant in fee-simple and therein releasing the power to him. There is a full discussion of the law in this case. There may also be a very cle'ar distinction between a'power to appoint among designated strangers and a general power to appoint among all the inhabitants of the earth. In view of the dictum of Chief-Justice Beasley in Thomson’s Executors v. Norris, supra, it cannot, I think, be said that the law is so well settled on this point as to permit a decree for specific performance.

I will advise a decree dismissing the bill. '


author: •Lane, Y. C.

text:
    Joseph Hirschberg v. Benjamin Flusser.
    [Decided June 21st, 1917.]
    1. A court of equity will enjoin continuous trespass where the injury is irreparable, and will issue a mandatory injunction where the legal right is settled, if equitable considerations do not prevent, and if the remedy obtained at law be not adequate. 2. D. L. IK v. Breehenridge, 55 E. J. Eq. 11¡1, Boyden v. Bragcm, 53 E. J. Eq. 26, and Golloty v. Stein, 8() E. J. Eq. J/05, distinguished.
    3. The question of laches in this case is not determined.
    4. After a suit in ejectment in which it has been determined that defendant has encroached! upon complainant’s land by building a wall thereon, and it appears that the wall cannot be removed without danger of damage to defendant’s property, a mandatory injunction may be granted by a court of equity to compel defendant to remove the encroachment.
    On motion to strike out.

      Mr. Philip J. Schotland, for the complainant.

      Mr. Samuel Roessler, for the defendant.
   •Lane, Y. C.

This is a motion to strike out a bill. The bill allegés that ’complainant is the owner of certain property; that defendant, who is the "owner of adjoining property, on or about May 3d, 1911, intending to build an addition to his building, excavated to a depth of twenty-four feet, and in so doing excavated a portion of complainant’s property substantially twenty-six feet five inches by nine inches; that defendant then proceeded to build on his own land and also on the land of complainant his foundation and side wall up to the lpvel of the ground, but that above the.level of the ground the defendant continued with his building on his own land; that about the 3d day of .July, 1911, complainant brought suit in the New Jersey supreme court to recover possession of the land occupied by defendant’s foundation and side wall below the level of the ground, and on the 25th day of September, 1913, procured a judgment against the defendant, and it was therein found that the complainant was entitled to recover the possession of the premises referred to in the bill of complaint; that the defendant did not remove the foundation wall or side w'all, and the complainant has been unable by means of execution to get the sheriff of the county of Essex to remove such encroachment because a large part of the; wall which encroaches on the complainant’s land is built with stones so -large that they not only encroach upon complainant’s land but extend into and form part of the wall of defendant’s building on defendant’s land, and it is impossible to remove tire part that encroaches without trespassing upon defendant’s land and injuring his building.

I assume that the bill may be considered as charging that the complainant actually issued execution and that the sheriff has failed or refused to remove the encroachment. The motion to strike out is based upon, first, that there is an adequate remedy at law, and second, that there is laches. It is insisted by the defendant that the complainant by virtue of the judgment in ejectment has been awarded the possession of the property in dispute and may remove whatever may be thereon; further, that he may compel the sheriff, if the nature of. the defendant’s property on the land in question is such that it may be removed, to remove it and to put him in an actual physical possession of the soil as it was prior to defendant’s interference with it; that the sheriff may, however, require indemnity, and if any part of the defendant’s building is injured by the action of the sheriff acting under the writ, the complainant will be responsible ; and, finally, that if the nature of the property of the defendant upon the land of complainant is such that’ it may not be removed without injuring defendant’s property, then the complainant is entitled only to constructive possession. Where the injury is irreparable this court will enjoin continuous trespasses. In cases where the fundamental right of the complainant to equitable relief depends upon legal title in dispute the court of’errors and appeals has said that it is the duty of the court to retain the bill and to send the complainant to law so that the legal title may be settled. Todd v. Staats, 60 N. J. Eq. 507, and cases following, the complainant in the meantime proceeding with the building at his peril. The logical result of Todd v. Siaats is that the legal right having been settled in favor of the complainant a mandatory injunction will go to compel the defendant to remove the offending structure if equitable considerations do not prevent and if the remedy obtained at law be not adequate." In Stanford v. Lyon, 37 N. J. Eq. 94 Vice-Chancellor Van Fleet held that the court would grant a mandatory injunction compelling defendants to remove portions of buildings erected by them which prevented complainant, from exercising rights in a yard. The court of errors and appeals, in 42 N. J. Eq. 411, modified the decree so as to define the complainant’s rights as they were defined -in an action at law which he had previously brought against the defendants and in which his rights had been determined. The court of errors and appeals did not question the power of the court of equity to, after the right had been settled at law, protect the right by mandatory injunction if that were necessary. '"‘The first head of equitable jurisdiction stated in Hart v. Leonard, 42 N. J. Eq. 416, is that of cases where the legal right has been established in a suit at law and the bill in equity is filed to ascertain the extent of the right and enforce or project it in a manner not attainable by legal procedure. And see the sixth and ninth head. In Haitsch v. Duffy (1914, Delaware), 92 Atl. Rep. 249, the chancellor, in a ease in which 'an injunction was prayed against defendant enjoining him from asserting a right of air and light over complainant’s land and compel the removal of a structure which interfered with complainant’s rights, held that a court of equity had the power to grant such relief prior to the determination of the right at law. He said, referring to Herr v. Bierbower, 3 Md. Ch. 456: “The court considered that it was no answer to say that by suit in ejectment the complainant -would recover possession of the land encroached upon and would so get any wall or building erected on-the land so recovered. The structure would still remain, and in order that the complainant be restored to the full use of his land, it would be necessary that the wall or structure be removed.” He further said: “This equitable jurisdiction is probably based not on the irreparable character of the damage by the aggression, nor to relieve the necessity of multiplicity of suits as if it were a continuous trespass. The right to- a mandatory injunction to require the removal of the encroachment on land is based on the peculiar nature of the right invaded and the subject-matter affected, viz., land.” I am inclined to think that the jurisdiction is in the last analysis based upon the impossibility of securing at law any adequate relief for the damage done, either by ejectment or by numerous suits in trespass. In Baron, v. Korn, 127 N. Y. 224, opinion by Parker, judge, the New York court of appeals in an action to restrain tire erection of a portion of a building on land of complainant said: “Assuming plaintiffs’ title to be established, the authority of the court in a suit in equity to interfere and prevent an appropriation of their lands to the use of another for building purposes cannot be longer questioned, not only for the purpose of avoiding multiplicity of actions, but also because they are without adequate remedy at law. * * * The sheriff might not regard it as his duty to deliver possession'by taking down the Avail, which would burden him with the risk of injury to other portions of defendant’s building, not included within the nine inches. (It is to be observed that the amount of land involved in that case Avas almost precisely what it is in this, at least so far as width is concerned.) But in equity the obligation to remove can be placed directly on the parties who caused the Avail to be erected.”

The court did not consider the question as to whether it was necessary tlrat the title should first be determined at law, holding that the question had not been properly raised. Upon the authority of the foregoing eases, I think that the bill may be maintained. The title and right of complainant has been settled at law. The law courts are not by reason of the nature of their processes able to- give .complete and adequate relief. Neither the sheriff nor the complainant should be compelled to take the risk, on removal of this structure, of injuring property of the defendant. To give the complainant constructive possession is 'no remedy at all, he has always had that. To remit him to actions for trespass will not afford adequate' relief. He is entitled to the enjoyment of the land in the position it was before the defendant encroached upon it. It is only by the process of mandatory injunction that the obligation to remove, in the language of the New York court; can be placed directly on the party who caused the Avail to be erected. - The case of D. L. W. v. Breckenridge, 55 N. J. Eq. 141; affirmed, 55 N. J. Eq. 593, is not in conflict with this holding, nor are the cases of Boyden v. Bragaw, 53 N. J. Eq. 26, and Colloty v. Stein, 80 N. J. Eq. 405. In the first, Vice-Chancellor Emery, in dealing Avith an application for an injunction directing tlie removal of certain water pipes, did say that the equitable remedy could give no different relief from the execution in ejectment, but the inability to execute the execution without clanger to complainant was not considered by him, moreover, the effect of his order was merely to retain the cause until the legal title had been settled at law. In the second, Vice-Chancellor Bird held that there was an adequate remedy at law, to wit, damages measured by what it would cost the complainant to remove the offending monument and put the land back in 'the condition it was before.the. erection. Such relief cannot be granted here. In the third, Vice-Chancellor Learning merely held that prior to determina-' tion of the legal title at law equity would not intervene to prevent the erection of a building alleged to encroach on complainant’s lands.

ISecond, on the question of laches. Whether the complainant has been guilty of laches depends, I think, upon a consideration of facts which are not before the court upon the present motion. 'The bill alleges that the construction was started on or about May 3d, 1911, and that the ejectment suit was started on or about July 3d, 1911, two months afterward. When the complainant knew of the encroachment is not disclosed. Nor is it disclosed to what extent the building had progressed at the time of the ejectment suit. By the commencement of the ejectment suit defendant had notice of the claim of complainant’s right. The suit was not brought to judgment until September, 1913. Whether that was the fault of complainant or because of necessary delay in court is not disclosed. This bill was not filed until May 8th, 1917. Whether this delay was occasioned by the complainant endeavoring to obtain relief at law is not disclosed. It may very well be assumed, I think, that no injury occurred to the defendant between September, 1913, and March, 1917, as the building had unquestionably been fully completed. Whether it was the duty of the complainant to file a bill in equity at the same time as commencing the suit in ejectment, applying to the court to retain the bill until the right at law had been settled, under the case of Todd v. Staais, may depend upon, circumstances which are not now before me. I will withhold consideration of the question of laches until final hearing.

¡In view of the fact that if an order is made sustaining the bill, and it is taken to the court of errors and appeals and there affirmed, there will have to be a trial upon at least the question of laches, and the case may then again go to that court, I am inclined to think that the proper order in this case is an order carrying over the motion to dismiss the bill until final hearing.

•I-wish counsel would communicate with me as to their views on this point.,


author: Garrison, J. Swayze, J.

text:
    The First National Bank of Houtzdale, Pennsylvania, appellant, v. Thomas B. Parker et al., respondents.
    [Argued March 8th, 1917.
    Decided June 18th, 1917.]
    A court of equity, when its remedial jurisdiction is invoked in aid of or in lieu of an action at law, will examine not only the transaction in question, but the relations of the parties and all of the surrounding circumstances, to the end that if there is a well-grounded suspicion of fraud or deception it may withhold its aid and leave the complainant to his legal remedy.
    On appeal from a decree of the court of chancery advised by Yice-Chaneellor Learning.

      Mr. John D. McMullin, for the appellant.

      Mr. George J. Bergen, for the respondents. •
   The opinion of the court was delivered by

Garrison, J.

The bill of complaint is exhibited to collect a judgment at law out of a fund placed in trust for his own use by the judgment debtor. Such a bill will lie to prevent a fraud upon tona fide creditors. Biat. Frauds § 11; Chancery aci § 70.

Upon three previous occasions similar bills were filed by the same complainant, who in each case obtained the relief prayed for. Upon the filing of this fourth bill the vice-chancellor who heard the cause and who had made the previous decrees became convinced that the statutes of this state were being used not to protect a bona fide creditor of the settler of the trust, but to unable such settler to -do what he could not lawfully do, viz., to regain the corpus of the trust fund. Some of the reasons that led the vice-chancellor to this conclusion were stated by him to counsel upon the argument as follows: “When on three successive occasions; namely, in 1910, 1912 and 1914, Mr. Parker has -borrowed on the dates named, respectively, ten thousand, twelve thousand and thirteen thousand dollars in the same manner, and on each occasion the bank has been obliged to resort for the collection of the loans to the same method now pursued, namely, a judgment in New Jersey, personal service upon Mr. Parker out of his own state, in the New Jersey law suit—service which it is reasonably apparent is made possible by Mr. Parker for the convenience of the bank—then a bill in equity in New Jersey identical with the present bill with personal service on Mr. Parker procured in the same way, is not the bank chargeable with knowledge of circumstances that make it impossible to escape the conclusion that when they make the fourth loan in the same manner they are simply making themselves the instrument for Mr. Parker to accomplish indirectly what he cannot accomplish directly?”

The fact that these remarks were made to counsel while the trial was still in progress has a marked significance upon the bona, fides of the complainant. Such a statement by the court while the case was still open afforded an opportunity, if it did not amount to an invitation, to the complainant to offer proof of any facts that would tend to rebut the impression the vice-chancellor had formed as to the collusive character of the suit. That no such proof was offered is practically tantamount to an admission that no such facts existed.

The vice-chancellor had, moreover, the advantages of the familiarity with the case gathered in previous litigations, and of the presence before him of the witnesses. Without these advantages we are in danger of dealing with the case upon more legal abstractions, whereas he dealt with it as the practical application of an equitable remedy to the given case.

In his final conclusions the vice-chancellor, referring to the ■previous litigation, said: “In that litigation complainants became fully apprised of the fact that the trust was void only as to bona fide creditors of Parker’s, and that Parker could not in his own behalf recover from the trust company, the principal of the trust funds. The three subsequent loans made by complainant to Parker, and the proceedings taken in each instance by complainant for recovery from the trust company of the money so loaned, render it impossible to escape tire conclusion that in making the loan here in question complainant deliberately and knowingly constituted itself an agency to enable Parker to regain control of his property. The circumstances that complainant actually advanced money and sought to make a profit for itself is immaterial; the practical status which complainant has deliberately assumed is that of a permanent conduit between Parker and the trust company from which Parker may draw funds at pleasure; complainant has constituted itself a creditor for the sole and definite, purpose of appropriating to itself the superior benefits of that status, creditors’ rights'which appeal to equitable protection are of an inherently different quality. * * * I am fully convinced’that this court cannot be properly made the involuntary machinery for carrying out an arrangement of that nature for the ultimate benefit of Parker.”

We fully concur in the conclusions thus reached by the learned vice-chancellor, and in the consequent dismissal of the complainants’ bill which may well be rested upon a well-grounded suspicion that a collusive deception was being systematically practiced upon the court of equity in order to obtain for one purpose the extraordinary aid it accords only for a totally different purpose.

A positive demonstration of actual fraud is not necessary. In the well-considered opinion in the case of Watts v. Worth, 76 N. J. Eq. 299, Mr. Justice Parker points out that when parties having a. right of action at' law seek the aid of a court of equRy, such court will examine not only the transaction in question, but the relations of the parties and all of the surrounding circum-stances, to the end that if “an atmosphere of suspicion surrounds and permeates the whole case,” a court of equity will refuse its extraordinary relief ' and leave the complainant to his legal remedy. That is this case.

The circumstance that in the ease just cited the same vice-chancellor sat below gives concrete emphasis to the -fact that “stare decisis” is only a more technical term for judicial consistency.

The decree of the court of chancery is affirmed.

Swayze, J.

(dissenting).

The trust in this qase was created by Parker himself. As soon as he attained his majority he assigned securities amounting to more than $150,000 to his mother and she immediately assigned them to the Camden Safe Deposit and Trust Company. The declaration of trust provides that the income shall be'paid to Parker during his life for his sole and separate use so that the same shall not be liable to or for his debts and contracts or for debts or contracts or under the control of ,anjr other person; immediately after his death the property is to be. assigned to such person and for such uses as he shall by will appoint in default of a .will to his mother if living, freed and discharged of the trust; but if she die before Parker, then to such person as she may by will appoint; and in default thereof to such persons as would be entitled under the laws of Pennsylvania to. the estate of Parker. A right is reserved to Parker with the consent of his mother, if living', to revoke the trust; and to Parker alone to revoke it after his mother’s death. She died in 1901. The trust was made irrevocable just before her death by consent of her and Parker. The deed of trust is clearly void as to creditors under section 11 of the statute of frauds (Comp. Stat. p. 0617), because made in trust for the use of the person making the same, and also because on its face it shows an intent to defraud future creditors. The case comes also within section 70 of the Chancery act, subjecting to the rights of creditors moneys held intrust where the trust has been created by the judgment debtor himself. It does not come within the rule of Ruckmam, v. Con-over and Winans v. Groves, to which the vice-chancellor appeals. In those cases the rights of third parties were involved. So much the court now concedes. No one is interested -in the fund except Parker himself. No one opposes the complainant’s recovery of its money except the trust company which has no beneficial interest in the fund, except possibly commissions to be earned. Parker has apparently done all he could to secure the complainant its money, except to make a binding agreement to execute his power of appointment in favor of his credit&r which he can do if it be necessary. The question, 'therefore, resolves itself into whether he is .to be prevented, in spite' of himself, from securing payment of his debts by a judgment, 'execution and proceedings in chancery supplementary thereto. Tire case goes further than to protect the corpus of the fund. The bill is dismissed and the complainant is thereby1 deprived of its remedy even against the income of the fund which is clearly Parker’s absolute property, and is probably in excess of the $4,-000 mentioned in the statute. Comp. Stat. p. 2259 § 300; P. L. 1880 p. 274.

We have not heretofore adopted in this state the doctrine of “spendthrift trusts,” and our legislature has evinced hostility-to them by subjecting income in excess of $4,000 to supplementary proceedings at law, even where the trust is created by another. We are now by this decision going far beyond any doctrine .of spendthrift trusts-that has ever come under my notice. 'And "we are doing it without any evidence that Mr. Parker needs the protection of the court as he certainly does not ask for it. We do it because, without .proof, we guess that a man who borrows about $10,000 a year and chooses to pay it out of a fund of which 'the equitable and beneficial right is wholly his own, by means of judgment and execution, must be doing wrong and without evidence we attribute moral delinquency to a creditor who loans him the money at the legal rate and in the ordinary course of business. There is no evidence as to Parker’s other means or his fortune aside from the trust fund; there is no evidence as to his need of the money or the use he made of it. It may have been used for a highly profitable investment; it ma3r have been used to discharge debts incurred by him of the highest moral obligation. In effect, we say the bank was right in loaning him $35,000 in four years; the court of chancery enforced its right to recover out of this fund three different times; we now say that for it to loan him $13,000 in the fifth year and to attempt to recover it by the thrice approved method, shows that it is guilty of some moral delinquency; that its hands are unclean because it is assisting him to get control of his own property in which no one else has any beneficial interest and to discharge that property of a trust created by himself and pronounced void by statute. If the court is correct, tradesmen who supply him with the means of living, must be likewise guilty of moral delinquency if they supply him' for a fifth year after having enforced their claim for four years out of this fund. This must be so since, as far as the case shows, the money loaned by the bank ma3r have been loaned for the express purpose of meeting Parker’s legitimate living expenses, which may not have been extravagant for one of his means. I cannot understand on what legal principle the bank can have imposed upon it the duty to explain what becomes of the money it loans. The legislature has recently shown a desire to go to great lengths to assist creditors in recovering their debts; a workingman’s wages “due and owing or thereafter to become due and owing” may be sequestered. P. L. 18-15 pp. 182, 'IflO. We are protecting an income on a trust fund in excess of $100,000 created by the debtor himself and expressly declared by him alone not 'to be “liable to or for his debts and contracts.” The way is made easy for a man of fortune to escape the ordinary obligation to pay bis debts, in spite of legislation to compel him- to pay. I confess I cannot follow the court’s reasoning. I pass over the question that might-well be raised as to- the estate in the trust fund of a life tenant with an absolute power of disposition by will.

For affirmance—Garrison, Trenci-iard, Parker, Bergen, Minturn, Kalis ci-i, Black, Heppeni-ieimer, Williams, Taylor, Gardner—11.

For reversal—Swayze—1.


author: SWAYZE, J.

text:
    Eva Goldstein v. Hyman I. Goldstein et al.
    [Argued March 12th, 1917.
    Decided June 18th, 1917.]
    1. A Jewish betro-thal agreement whereby the prospective husband obligates himself to care for the property brought him by the wife and pledges his own property as security for doing so, constitutes marriage articles, which give rise to' an executory trust, and impose upon the trustee and the court the duty of carrying it into effect in accordance with the intent of the parties.
    2. The nature of such an executory trust indicates that the settlement will provide not only for the husband a,nd wife, but for children, and it is the duty of the court to work out the details of the scheme so as to do justice and carry out the intention of the parties.
    On appeal from a decree advised by Vice-Chancellor Backes, whose opinion is reported in 86 N. J. Bq. 361.

      Mr. Henry S. Alvord, for the complainant-appellant.

      Mr. Albert 8. Woodruff, for the defendants-respondents.
   The opinion of the court was delivered by

SWAYZE, J.

The hill is tiled to establish a trust in the sum of $5,000, to charge it on lands of the defendants, and to secure the return of wearing apparel, jewelry and wedding presents brought by the complainant on her marriage to the defendant Hyman I. Gold-stein. The important question is as to the title to the $5,000. The facts are as follows: Eva Lipitz, then under sixteen years of age, the complainant, entered into a written betrothal agreement with the defendant Hyman I. Goldstein on June 10th, 1914. The agreement was signed by both. It provided for . a marriage with ceremony of canopy and sanctification according to the rite of Moses and Israel; that they should share in their possession, just portion and portion as is the universal custom. The bridegroom bound himself to give presents to the bride according to the custom; the bride obligated herself to bring in as dowry $5,000 and clothing, beddings and trousseau, according to the manner of the prosperous. At the time of the betrothal, the father of the complainant deposited $5,000 in bank and received therefor a certificate payable to Eva Lipitz and Dr. Fly-man Goldstein ten days after legal marriage notice. This certificate was then delivered to Dr. Goldstein who satisfied himself by inquiry that it was good for the money. Subsequently, in September, the marriage took place with ceremony of canopy and sanctification. We are furnished with a translation of a Jewish marriage certificate, translated from the original Aramaic, which sets forth the obligations of the parties. This is only a blank form. Mrs. Goldstein testifies that her husband took the original certificate from her. He testifies that he understood it was a certificate certifying to the fact that they were man and wife and that he was to feed and support her. He does not deny that he took the certificate from her. It is not questioned that this form is followed in a case of ceremony under the canopy and with sanctification and is included as a part of the ceremony. Dr. Goldstein’s father testifies that they positively do it in every Jewish marriage. The certificate states that the bride consented to become the bridegroom’s wife and brought unto him the dowry given her by her family, consisting of gold and of silver, of ornaments and of garments, of furniture and of bedding, which the bridegroom accepted and agreed to ,add thereto and give her an equal sum, declaring:

“I accept the responsibility to tbe integrity of this dowry and of my addition thereto, for myself and my heirs that will follow me, to compensate with the most valuable of my estate and possessions, which I do possess anywhere beneath the sky, that which I have bought already and that which I may buy hereafter whether of land or of goods and chattels, all of which I hereby pledge as security and hold them subject to the collection of the sum set forth in this certificate, to wit, the amount of this dowry and my addition thereto even pledge the very cloak I wear 'on my shoulders in payment during my lifetime and after ■my lifetime from this day forever.”

The. certificate of marriage goes on to state that the bridegroom took upon himself, in accordance with the certificate, the responsibility for the dowry and the addition thereto. The certificate is declared to he subject to strict enforcement as all certificates of dowry customary among the daughters of Israel. It closes with the declaration that—

“We have purchased the rigbt of this man, namely the bridegroom, and have vested it in this worthy woman aforementioned * * * to all that is written and set' forth in the foregoing by means of an article with which the right and title may be properly purchased.”

Dr. Goldstein obtained his wife’s endorsement of the certificate of deposit and drew the money, most of which, $1,000 or more, he has invested in a house in Camden in his own name. Some of it seems to have been used to buy- presents for the complainant, and some invested in a house, the title to which is in the doctor’s mother.

The rights of the parties obviously depend on the betrothal agreement, the certificate of deposit and the marriage certificate. Dr. Goldstein’s testimony as to the conversation with his prospective father-in-law is unimportant, since the negotiations, to Call them by their proper name, finally took form in mitten documents. We think it clear that there was no gift of the money to the defendant. The fact that the certificate of deposit was in the joint names of the prospective spouses is conclusive on that point. The betrothal agreement contemplated a subsequent marriage according to commonly-used Hebrew rites which involve obligations on the part oí the prospective husband to care for the property brought him by the wife, and to add thereto; the pledge by the marriage ceremony of his own property as security indicated that he was to have either complete or partial control of the property, and that the wife was to have some beneficial interest therein secured by his pledge. If we lay aside the terms, unusual to our ears, in which the documents axe couched, we have what is familiar to English law under the name of marriage articles, and we have a case of the legal situation, which so often arises out of marriage articles, of an executory trust, where to use the language of a clas'sic text-booty “the creator of the trust has merely denoted his ultimate object, imposing on the trustee or on the court the duty of effectuating it in the most convenient way.” Adams Eq. *40, a statement commended by Pomeroy as “very accurate.” Pom. Eq. Jwr. § 1001:

“In the case of executory marriage articles,” continues the author, “there is an indication furnished by the nature of the instrument, independently of an expressed intention leading to this construction of the trust; for it is assumed, in accordance with ordinary practice, and in the absence of reason to conclude the contrary, that the settlement contemplated by such articles is one which will not only provide for the husband and wife, but will also secure a provision for the children of the marriage. If therefore the articles, strictly interpreted, would have a different result they will be moulded in conformity with the presumed object.”

Pomeroy says (section 1001) that where marriage articles or agreements to settle are general in their terms, a court of equity presumes that it was the intention of the parties to provide for the issue of the marriage and will therefore direct a settlement to be made which does provide for the children. The subject is discussed in Lord Glenorchy v. Bosville, 1 Lead. Cas. Eq. 1, and the notes thereto, but we need go no further than the opinion of _ Mr. Justice Depue, speaking for this court, in Cushing v. Blake, 30 N. J. Eq. 689 (at p. 701), followed by us in Pillot v. London, 46 N. J. Eq. 310. In those cases, indeed, the trusts were definitely and perfectly expressed in the declaration; here they are left indefinite and uncertain. Indefinite and uncertain as the terms are, the intent is clear. It is to create a trust fund in consideration of the marriage and for the purposes thereof. It is for the court, to work out the scheme of the marriage settlement. The fact that cases of this kind are uncommon and unfamiliar to our courts arises out of our different social customs and usages, which are apt to treat gifts of this kind as made to the bride and take little thought in the case of small fortunes of the objects of the marriage and the possible claims of future children. Uncommon and unfamiliar as such marriage articles are there is no reason why they should not be enforced and carried out as marriage articles and executory trusts are-enforced and carried out by the English law. Since we think the case is one of an executory trust, it is not important to determine the effect of the complainant's endorsement of the certificate of deposit. Her husband was also a trustee, and-the fund in his hands alone would be charged with the same trust as in their joint hands. It may be well to add that even if the complainant had a title free from the trust to any part of the fund, it would be presumed to remain her property. Black v. Black, 30 N. J. Eq. 215. (The reversal of that decree (31 N. J. Eq. 798), although without opinion, can only be interpreted under the facts of the case as emphasizing the principle, which has since been followed in this court. Cole v. Lee, 45 N. J. Eq. 779, at p. 785).

If a proper settlement had been drawn to effectuate the intent of the marriage articles, it would have provided that the trustees should hold the estate during the continuance of the marriage. Such a clause was approved in Harvard College v. Head, 111 Mass. 209, and may prevent the injustice of allowing the spouse who is guilty of misconduct to profit by the settlement as the law in England permitted prior to legislation. Evans v. Carrington, 2 De G. F. & J. 481; Fitzgerald v. Chapman, L. R. 1 Ch. Div. 563; 45 L. J. Ch. 23; Chase v. Phillips, 153 Mass. 17; 26 N. E. Rep. 136. The case is like New Jersey Title Guarantee and Trust Co. v. Parker, 85 N. J. Eq. 557.

In case the marriage shall be dissolved, as seems not improbable, in view of what has happened, the scheme of the settlement should provide for that contingency. Where husband and wife had separated, Lord Romilly, M. R., in Munt v. Glynes, 41 L. J. Ch. 639, directed that the legacy be paid to the wife. Each case depends on its own circumstances, but there would be all the greater reason for this direction where the fund came from the wife or on her behalf and a trust would result upon failure of the purpose of the marriage articles. Speaking, generally, the court of chancery will now b.e in a position to work out a scheme in the light of what has happened, which shall be calculated, to do ■ justice and effectuate the intention of the parties. Illustrations of the length to which the court may go in settling the scheme to effectuate tire intention may be found in the cases cited in the notes to Lord Glenorchy v. Bosville, in the Leading Cases in Equity, and in Taggart v. Taggart, 1 Sch. & Lef. 84; Young v. McIntosh, 13 Sim. 445; Cogen v. Duffield, 2 Ch. Div. 1044; 45 L. J. Ch. 307. The- report in 18 Sim. gives a form of decree. Other ¡decedents' may be found in Seton Dec. 1285. The opinion of the vice-chancellor was adverse to the complainant, and the scheme of the settlement was a matter which, under his view, it was unnecessary to consider.

The claim of the complainant to personal chattels was only touched upon in the court below and not discussed in this court. The evidence is not detailed enough to enable us to express any opinion that would be helpful. If important, it can be, dealt ■ with by the court of chancery upon more complete evidence. •

The complainant is entitled to a decree charging upon the land owned by Dr. Goldstein, the amount which he invested therein out of the $5,000; appointing a trustee and settling the terms of the trust or the destination of the fund if the trust must be considered at an end. As to the amount invested in property owned by defendant’s mother, we find nothing in the testimony to charge her with notice of the trust. As to that and any other sum that he may have spent out of the trust fund, the decree can only be a personal decree against him. The existing decree must be reversed and the record remitted to the ' court of-chancery for further proceedings in accordance with our opinion. The complainant is entitled to costs in both courts.

For affirmance—None.

For reversal—Garrison, Swayze, Trenchard, Bergen, Mtnturn, Kalisch, Black, White, Heppeniieimer, William's, Taylor, Gardner—12.


author: Swayze, J.

text:
    In re estate of Henry R. White.
    [Argued March 16th, 1917.
    Decided June 18th, 1917.]
    Under the amendment of the Orphans Court act (statute of distributions) in 1914 (P. L. 1914 p. 69), surviving brothers and sistei's take to the exclusion of children and grandchildren of deceased brothers and sisters.
    On appeal from -a- dec ’ee advised by Vice-Ordinary Lewis and reported in 87 N. J. Bq. 294.

      Mr. Arthur B. Seymour, for the appellants.

      Mr. Clifford L. Newman, for the respondents.
   The opinion of the court was delivered by

Swayze, J.

Henry R. White died intestate December 29th, 1914. There survived him two brothers (the present appellants); children of a deceased sister; children of a deceased brother; a grandchild of a deceased brother. The prerogative court directed that the estate be distributed, one-fifth to each of the brothers, one-fifth to thé children of the deceased sister, one-fifth to the children of the deceased brother and one-fifth to the grandchild of the other deceased brother. The brothers appealed.

The result turns on the construction of the amendment of 1914 (P. L. 1914 p. 69-) to sections 168 and 169 of the Orphans Court act, paragraph 3 of which reads as follows:

“If there be no husband or widow, as the case may be, then all of the said estate to be distributed equally to and among the children; and in case there be no child, nor any legal representative of any child, then equally among the parents and brothers and sisters, except where the intestate is a minor, in which case all of the said estate shall be allotted to the parents, if living, but if not, then to the brothers and sisters equally.”

It is necessarily conceded that if the words of paragraph 3 of section 169, as amended, govern the case, the brothers.are entitled to the whole estate. The effort of the respondent is to vary the plain meaning of the words of that paragraph by “reading into it,” as the learned vice-ordinary said, a .provision that the children of a deceased brother or sister take by representation the parent’s share. He found a warrant for this interpolation in the provision of section 168 that the distribution should be. just and equal, and to the next of kindred to the intestate in-equal degrees, or legally representing their stocks. It is always dangerous to read words into a statute that are not there, as we said in Blanz v. Erie Railroad Co., 84 N. J. Law 35. It can rarely, almost never, be done, and only when it plainly effectuates the legislative intent and is, as in that case, within a possible construction of words actually used. It can never be done when the language of the act shows that the legislature has considered the subject and omitted the words sought to be interpolated. That-is the present case. Paragraph 3 in the act of. 1914 answers to paragraphs 3 and 4 of the old act (Comp. Stat. p. 387-5), but there is a most significant change of'language. The old act provided for distribution under paragraph 3 • to the next of kindred in equal degree “and their legal representatives as aforesaid;” the words “as aforesaid” refer to the language of section 168, “legally representing their stocks.” Paragraph 4 of the old act provided for a distribution “to brothers and sisters and the representatives of them.” With these words in both paragraphs of the old act before them, the legislature, in 1914, carefully, almost ostentatiously, omitted them in the new act. They not only dropped them out but dropped thejn out after using substantially the same words in the very next preceding line of paragraph 3, which provide for the representative of a child. That this omission was no mere oversight appeal’s more clearly when we consider the object of paragraph 3. The old act, in paragraph 4, gave brothers and sisters and the representatives of them an equal share with the mother. The new act, paragraph 3, gives the brothers and sisters an equal share with the parents, except where the intestate is a minor. If the legislature had added the words which the vice-ordinary has read into the act, it would have provided for a distribution equally among the parents and brothers and sisters and the representatives of them. It could hardly be meant to allow representatives of parents to share since the brothers and sisters and representatives of brothers and sisters would necessarily be the representatives of parents also; yet the legislature by coupling parents • with brothers and sisters has shown that they were to be treated alike; they are to share equally.. For this there is reason in the fact that parents and brothers and sisters form a family group. But it could hardly have been meant to compel a father who, before this legislation took the whole estate, to share, not merely with his wife, his children, and in case of divorce and remarriage, with his wife’s children, but with his children’s ehil- • dren to the remotest degree. This result was avoided by the legislature when it abandoned the idea of representation. No argument can be drawn from the provision of section 168 that the distribution shall be just and equal; for, as we said in Smith v. McDonald, 71 N. J. Eq. 261, any distribution authorized by the statute would be just; changes in old-established rights of inheritance are becoming frequent and no one would be so bold as to suggest that the rule of the legislature can be challenged as unjust because novel. Is it unjust to deprive the father of his former right to take the whole of the child’s personal property; and shall we therefore say that the word “parents” in the new' act does not mean parents? We must read the law as the legislature makes it, even if it conflicts with ideas of justice that have prevailed for centuries.' Our whole scheme of inheritance taxes rests on the theory that the right to inherit is the gift of the legislature, not a natural right. The words which it is proposed to interpolate mean representation to the remotest descendant of a'brother and sister, and would not be limited in the same way that the right of representation had been limited by the wisdom and sense of justice of the Boman jurisprudence as well as of our own until 1899, as we pointed out in Smith v. McDonald. Justice, the old idea of justice, at least, excluded representation beyond brothers’ and sisters’ children. The construction of the prerogative court opens the door to a contest of a testator’s will by descendants of nephews or nieces who have nothing to lose and in whom the testator could have little interest at best. Nor do we derive any help from the use of the word “equal” since a distribution per stirpes, i. e., by representation, is distinguished from a distribution per capita, by the very fact of inequality between individuals. Nor do the words “representing their stocks” help us, since in the case of nephews and nieces and other next of kin, there had been no representation among collateral beyond brothers’ and sisters’ children for centuries prior to 1899. The words of section 168, as to representation of stocks, had never been applicable except in that limited way to the next of kin before the omission of the proviso in that ji-ear. Smith v. McDonald, 71 N. J. Eq. 261, 262. All that the legislature did in 1914 was to take away representation of brothers and sisters, perhaps because the amendment of 1899 threatened the dissipation of estates in -small fragments among persons not the next of kin of the decedent and in most cases unknown to him, by allowing them to share with parents; perhaps because it was realized that nephews and nieces were a degree more remote than brothers and sisters and still more remote than parents; while grandnephews and grandnieces were still further removed. It would be a'step backward for us to read into the statute words that the legislature has taken pains to omit. The legislation of 1899 is a precedent to the contrary. The legislature in that year omitted from paragraph 2, as it then stood, the proviso “that no representation shall be admitted among collaterals after brothers’ and sisters’ children.” The omission caused serious difficulty in Smith v. McDonald, but no one was hardy enough to suggest that we should interpolate words the legislature had omitted in order to make the act correspond with our • ideas of justice and equality. Whatever argument in favor of the justice of a method of distribution can be drawn from its antiquity and continuous and unbroken existence had to give way then- as now to the will of the legislature. The decree must be reversed and the record remitted in order that a decree may be entered dividing the estate equally between the two surviving brothers. Costs will properly be paid out of the estate.

For affirmance—Kalisch, Black, White, Williams—i.

For reversal—Ti-ie Chiee-Justice, Garrison, Swayze, Trenci-iard, Bergen, Minturn, Hepeeniibimer, Taylor, Gardner—9.