author: Fort, J.

text:
    Fannie Turner, complainant and appellant, v. James H. Davenport et al., defendants and respondents.
    [Submitted March Term, 1901.
    Decided June 17th, 1901.
    Filed June 17th, 1901.]
    1. The last clause of section 14 of the Married Women’s act of March 27th, 1874 (Gen. Stat. p. 2015), declaring that nothing in the act should “enable husband and wife to contract with or to sue each other except as heretofore,” is not repealed by the amendatory act of June 13th, 1895. Gen. Stat. p. 2011.

      2. Section 4 of our Married Women’s act makes the wages and earnings of a married woman, since the passage of the act, in any employment in which she is employed, separately from her husband, her sole and separate property as though she were a single woman.
    3. Under our statute a married woman may engage for wages, Dy contract, with any person other than her husband, and whether her husband consent or not, she is entitled to receive the money due her for such service as her separate property.
    4. The rule of the common law that a husband, by virtue of the marital contract, was entitled to the earnings of the wife, is superseded by our statute, where the wife contracts for her services with any other person than her husband, and wages to which she is entitled under such a contract are her separate property and cannot, as against her claim therefor, be reduced to possession by the husband.
    5. A married woman may contract with a firm in which her husband is a member and recover'in equity for wages for her personal services under such contract.
    On appeal from' a decree of tbe chancellor, whose opinion is reported in IS Fióle. Gh. Rep. 18.

      Mr. Walter J. Knight, for tlie appellant.
   The opinion of the court was delivered by

Fort, J.

This was a bill by a married woman to have it decreed that the defendants, constituting a co-partnership, of which her husband is a member, pay her for her services to the firm.

The opinion of the chancellor in this case, as reported, correctly states the facts.

The performance of the services was admitted. The amount claimed is found by the chancellor to have been reasonable.

The claim is a just one. The only question is, can a wife recover for her services to a firm in which her husband is a member ?

The claim of right to recover is first put upon the ground that a wife may contract with her husband and maintain a suit in equity even against him to enforce such a contract, under the amendment to our Married Women’s act, passed June 12th, 1895. P. L. of 1895 p. 821.

The insistment is that this amendment of 1895 so modifies the Married Women’s act, approved March 27th, 1874 (Rev. Stat. 1871 p. If69 § 5), as to permit her to contract with any person, and hence with her husband, and 'making such contracts enforceable, both at law and in equity, by or against such married woman, even as to her husband. Gen. Stat. p. 2017 § 26.

A full discussion of the effect of the amendment of 1895 will be found in the opinion of the learned chancellor in this ease. With his conclusions upon this statute we agree. His construction of the statute is adopted by us on this branch of the ease for the reasons stated by him. Turner v. Davenport, 16 Dick. Ch. Rep. 18.

The other ground upon which reversal is asked is that the learned chancellor -erred in denying the relief prayed and holding that the complainant is not entitled to relief in equity, because the money sought to be decreed to be paid to her is for her wages, for her labor and personal services to the firm in which her husband is a member, the right to which wages is in her husband, by virtue of the marriage relation, and hence no part of her separate estate for which she may maintain a bill in equity against her husband or a firm in which he is a member.

That a bill could be maintained at common law by a wife even against her husband, where he held money of his wife’s separate estate, the learned chancellor concedes in this case, and cites the authorities fully to sustain that position. Turner v. Davenport, supra.

This court held the same doctrine in a later case. Adoue v. Spencer, 17 Dick. Ch. Rep. 782.

It is well settled at common law that the wages and earnings of the wife became, or could become, by reduction to possession, the absolute property of the husband. Moneys due her were dioses in action, which he could reduce to possession.

- Our Married Women’s act has intervened, if not to entirely change this, certainly to change the presumptions arising from the mere fact of services performed and wages due a wife.

She may now contract with any person.

She may engage to labor or serve in any capacity for wages. She may engage in business on her own account. She may sue for the recovery of debts or wages due her, apart from her husband.

If a husband may still be said to be in a position to claim his wife’s'earnings, if he demand, or make claim to them before they are paid, or assert a right thereto as against her claim or suit therefor, his right is not one which courts will assume to exist, or allow by operation of law, to defeat the wife’s claim or suit to recover for such earnings when due.

Under our statute permitting a wife to contract “with any person” as if she were a feme sole, it will at least be presumed, in default of any dissent on the part of the husband, and certainly -when it appears he had knowledge of it, that he assents to her receiving the wages of her labor to her own use.

By section 11 of our Married Women’s act a wife is given express statutory right to maintain a suit in her own name for her wages and earnings, which are, by our statute, made her separate property. Gen. Stal. p. 2011/..

Section 4 of our Married Women’s act makes

“tlie wages and earnings oí any married woman acquired or gained by her after the passage of this .act in any employment, occupation or trade in which she is employed and which she carries on separately from her husband, * * * her sole and separate property as though she were a single woman.” Qen. gtat. p. 2013 § If.-

It is clear that, under our statute, a married woman may engage for wages, by contract, with any person other than her husband, and that, whether her husband consent or not, she may receive the moneys due her for .such services as her separate property, and, as it seems to me, this statute expressly negatives the right of the husband to reduce such wages to possession, by declaring that such wages “shall be her sole and separate property,” for at common law he could not reduce property of her sole and separate estate to his possession to such an extent, at least, as to be'free from liability to account to her therefor in equity. Story Eq. Jur. § 1880; 8 Pom. Eq. Jur. §§ 1098, 1099, 1103; Taylor v. Meads, 4 De G. J. & S. 597, 603, 604; Jones v. Clifton, 10 U. S. 225, 229; Peacock v. Monk, 2 Ves. Sr. 191; Kelly Mar. Wom. 251 § 2.

The rule of the common law was founded upon the theory that husband and wife were one in law. .When our statute, by express provision, gave to the wife the right to contract, as if she were a feme sole, with any person, except her husband, the reason for the rule ceased.

When the reason for a rule ceases, the rule is no longer in force. McBlain v. Edgar, 48 Atl. Rep. 600.

In this case services were rendered by the complainant to the firm of which'her husband was a member. The learned chancellor says: “If the contract between them established a chose in action, it was one which the husband could, prior to the passage of the act, reduce to possession and hold absolutely, and a bill in equity would not lie therefor; for it would be absurd to say that the husband, having the earnings of his wife in his pocket, and refusing to pay them to her, had not reduced them to possession.”

This does not seem to us to be the position of the husband. He and Ms partner were made parties defendant to ber bill and neither of them answered. The bill stands confessed as to all. Not only the justice of her claim, but her right to have it to her own use, is admitted by tire default. The husband makes no claim to possession of the funds, nor claim or right to reduce the same to possession. To us this seems a complete abandonment of- such right, even if it exists.

Nor clo we agree to the suggestion that the husband, who is a member of the co-partnership for which his wife has labored for wages, can be said to have her earnings in Ms pocket. Partnership assets are first liable ,to pay partnership debts. 8 Lind. Part. *599; Hill v. Beach, 1 Beas. 31; Blackwell v. Rankin, 3 Halst. Ch. 152, 162.

As an individual, he cannot be said to have any part of the firm assets in his pocket, or a right to so have, until all the partnership debts are paid.

A bill by a wife asking to be paid, on the distribution of the co-partnership assets, wages admittedly due her for her labor and personal services rendered to the co-partnership, cannot be said to be a bill seeking to recover moneys due the wife which the husband has reduced to possession, simply because he is one of the firm.

We think that the wages due the wife for services to the co-partnership became, by our statute, and also with the assent of her husband by his confessing her bill, her sole knd separate property, and that she is entitled to enforce her claim in equity against the assets of the firm in which her husband is a member.

For this reason the decree roust be reversed, and a decree directed to be entered allowing the complainant’s claim as established by the evidence.

For reversal—The Chiee-Justice,Van Syckel;Dikon, Garrison, Collins, Gummere, Fort, Garretson, Hendrickson, Bogert, Krueger, Adams, Yredenburgi-i, Yoorhees—14.

For affirmance—Yroom—1.


source: Caselaw Access Project

author: Garretson, J.

license: Public Domain

text:
    Sadie Howell, appellant, v. Clinton G. Howell, respondent.
    [Filed July 2d, 1901.]
    AVhere a husband left his wife under a false statement of the purpose for which he was going away from home and of the place to which he was going, taking with him her engagement ring and two watches, which he had formerly kept in his house, and the same day wrote to his wife’s father that he had run away; that there was no use tracing him; that he did not know as he would ever be back; that he did not know where he would go, and asking his father-in-law to go and get his wife and move her home; that in a few letters he wrote her, after leaving, he never expressed any intention of returning, nor asked her to join him, nor manifested any regret at the separation, nor contributed anything towards her support and never returned to her, the absence continuing for two years and five months before the petition was filed, the willful, continued and obstinate desertion declared in the statute to be sufficient ground for divorce is proved and the petitioner is entitled to a decree.
    On appeal from a decree advised by 'Vice-Chancellor Grey, dismissing the petition of the appellant, whose opinion is reported in J/S Atl. Rep. 510.

      Mr. George M. Shipman, for the appellant.
   The opinion of the court was delivered by

Garretson, J.

The appellant filed her petition for divorce April 3d, 1900, on the ground of. desertion, and alleges that her husband deserted her. in the month of October, 1897. The defendant filed no ansAver, and the case was heard ex parte.

It appears from the evidence that the petitioner and the defendant were married June 2d, 1897; that the defendant lived with the petitioner from the time of the marriage until the 16th day oi October, 1897, and taught school from September 1st, 1897, to the 16th day October, 1897; that on the 16th day of October, 1897, which was a Saturday, the defendant left home on the morning train, having told his wife the day before that he had received a letter from a butcher at a certain place asking him to come and post his books, as he had been in the habit of doing. He -usually went on his wheel and came back in the evening, and on this occasion he said first that he would go on his wheel, but afterwards he said that he was tired, and would go on the train; he said he would be back at night; he took his wheel with him. He did not stop off at the place to which he said he was going, but went on with the train beyond there to another place, from which place he wrote and mailed a letter to his father-in-law, stating that he had run away, and was on his road then; that he was going to Port Jervis, and it was no use of tracing him; that he did not know as he would ever be back; he did not know where he would go to; that he was in debt, and could not pay, and wanted his father-in-law to go. and get his wife and move her home; that he has never been back, and has never contributed anything to the support of his wife since.

It appears from the evidence that when he went away he took with him his wife’s engagement ring, which he had given her, and two watches which he had kept in a trunk, besides a watch which he carried. He owed $150, which he had gotten upon a note the morning he was married, and which note his wife has since paid.

When he first went away he wrote from Baltimore to his father-in-law for clothes and money, and his father-in-law sent him clothes and money. ITe afterwards wrote to his sister from St. Louis, asking for money, and his wife sent him $20. It does not appear that he ever acknowledged the receipt of this $20. The petitioner had received some letters from him after he left, and before sending him the $20, but it does not appear that in any of them he ever spoke of returning to her, or asked her to go to him, or expressed any regret that they were not able to live together.

On the 30th of June, 1899, more than twenty months after he had left his wife, she received a letter from him, dated Chicago, in which he addressed her as his “dear wife;” tells her where he is; that he had left the hospital; gives some account of his ailments, and the treatment for them; asks her to remail him a letter which he supposes she had written, and which he had directed should be sent back to the place where he had Jived when he left her; tells her he will keep her posted as to his progress; gives her some of his expectations of employment, and what he will make by.it; says, “Don't forget and send me back the letter, love, as I don't want to lose any more communications from you;” tells her of the condition of the weather, and concludes, “Remember to sister and the other folks, and don't forget your own husband.”

This could hardly be called a letter expressive of very much regard, still less of affection, and it is absolutely destitute of any regret at, separation from his wife, or of any desire that she should join him, or of any intention of returning to her.

We have, then, a husband going away from his home, after giving a false reason to his wife for leaving; sending" word to her father that he has left with a purpose of not returning, and informing him of that fact, and requesting him to look after her. He carries out his intention, and gives no indication of change in his intention for more than two years and five months before the bill was filed.

It is not necessary that the petitioner should show any motive for her husband's desertion of her. That he was in debt was surely no sufficient motive for his going away; it is no answer to her charge. We can only judge of his intention by his acts, and his leaving his wife under a false statement of his purpose in going away; his taking her property with him; his saying that he was going away; that there was no use trying to trace him; his continued absence for more than the statutory period; his failure to make any provision for his wife," and the total absence, in the few letters he sent her, of any expression of an intention to return, are surely sufficient to satisfy the court that he has been guilty of willful, continued and obstinate desertion.

We think that his act of going away, in the light of the deception practiced upon his wife; his statement of his purposes in his letter to his father-in-law, and ,his subsequent failure to give that act any other color, was desertion, and so intended by him, and the use of a few mildly affectionate words in a letter cannot deprive his acts and previous words of their legitimate force.

We, then, have cessation of cohabitation; an intention in the mind of the defendant to desert, and a separation against .the will of the petitioner, which, under the decisions in this state, are held sufficient to-justify a decree for divorce upon the ground of desertion. Taylor v. Taylor, 1 Stew. Eq. 207; Sergent v. Sergent, 6 Stew. Eq. 204.

The petitioner has made out such a ease as, under the statute and decisions in this state, justify a decree for divorce.

For reversal—Ti-ie Chief-Justioe,Yan Syckel, Dixon, Garrison, Gummere, Colltns, Fort, Garretson, Hendrickson, Bogert, Adams, Vredbnburgi-i, Voorhees, Yroom—-14.

For affirmance—None.


author: Vredenburgh, J.

text:
    Catharine Coffey et al., appellants, v. John H. Sullivan et ux., respondents.
    [Filed June 17th, 1901.]
    1. A father, seventy-eight years old, conveyed to one of his sons all his real estate (which was substantially all his property) by a deed of conveyance of bargain and sale operating under the statute of uses, for the expressed consideration of $1, and without power of revocation inserted _ in it; under the unequal position as well as the other -relations of the parties, together with the circumstances shown by the complainants and narrated at length in the following opinion, it was held that the complainants had- sustained the burden of proof assumed by them; that the inference of fraud in the procurement of the deed by the son from the father was legitimate and warranted, and that the deed should be declared void.—
      Held, also, that the conveyance could not, under the evidence, be sustained as a mortgage to secure debts, nor could it be supported upon the theory of a resulting or implied trust for the future care or support of the grantors, nor as a voluntary settlement from donor to donee.
    2. Upon a sale of property, gross inadequacy of pecuniary consideration, joined with inequality in the position of the contracting parties, is a ground of equitable relief, and fraud will be presumed by the court if the circumstances and relations of the parties “either lend themselves to sucb> presumption, or are without probative force sufficient to neutralize it.”
    3. A trust cannot be implied in favor of the grantor of land by deed operating under the statute of uses, the liabendwm, clause declaring the use to be for the grantee.
    4. An express trust, not manifested in writing, made by a grantee of a deed of conveyance of lands, in favor of the grantors, is void under the statute of frauds.
    5. If, under the evidence, the conveyance must be regarded as a voluntary settlement from donor to donee, the burden of proof was cast upon the donee to clearly establish that the donor fully appreciated what he was doing, or at the least, in the doing had the benefit of independent and competent advice.
    On appeal from a decree advised by Vice-Chancellor Stevens, who delivered the following opinion:
    The evidence in this case on both sides is very meagre. The complainants, by their bill, attack a deed made by their father, James Sullivan, to his son John, on the ground that John procured it by fraud and undue influence. There is no affirmative evidence of either fraud or undue influence. The grantor, it is true, was about seventy-eight years old when he executed the deed, but the evidence, so far as it goes, shows that at that time he was an active old man, engaged in farming and capable of transacting business, whose mind did not become impaired until within a few months of his death. He died three years after the deed was made. Complainants do not show that John stood in any confidential relation to his father—that he acted as his agent or adviser—consequently the burden of proof is upon complainants to establish the fraud or undue influence they allege, not upon the defendant to show affirmatively that the deed was fairly obtained. Several of the cases cited do not apply for this reason. The case in hand appears to me to stand upon substantially the same footing as Le Gendre v. Goodridge,
      1 Dick. Oh., Rep. 120, and I will therefore advise a dismissal of the bill.

      Mr. Alan II. Strong, for the appellants.

      Messrs. Vail é Ward, for the respondents.
   The opinion of the court was delivered by

Vredenburgh, J.

This bill is filed by three of the four children of James Sullivan and Julia, his wife, to set aside a deed of conveyance of land, claimed to have been fraudulently obtained from their father by their other brother, John H. Sullivan. The deed is dated and was formally executed February 6th, 1896, by the father (who was seized of the fee of the lands), joined with the mother, who had an inchoate estate of dower therein. The father died intestate on January 6th, 1899, aged about eighty-one years, and must have been, at the date of this conveyance, about seventy-eight years old; and the mother, who is still living and was then about eighty-two or eighty-three years of age, was, according to the uncontradicted evidence, feeble-minded or demented to such a degree as to have been incapable of intelligently transacting-business. The mental capacity of the father,, about the time of the execution of the deed, is in dispute under the evidence; two witnesses testified that, in their opinion, his mind was very feeble, and two witnesses swore, on the contrary, that, in their opinion, the condition of his mind was good. No witness has testified as to the father’s mental condition referring to the precise occasion of either the signing or the acknowledgment of, or the delivery of, the deed. The deed is of the ordinary “bargain and sale” form under the statute of uses, without covenants of warranty, and conveys to John the title in fee-simple absolute to four lots of land situate in Rahway, New Jersey (the value does not appear), one of which embraces the homestead' propertjg which had been the grantors’ home for many years. It is established by the evidence, and is conceded in the case, that this deed conveyed away all of the lands owned by the father,. and tliat his personalty was of trifling amount. No administration of it appears to have been taken out. The deed contains no power of revocation reserved by the grantors, nor any covenant or agreement by the grantee for the future care or support of the grantors in consideration for the grant. John did not, at any time, ■ either before or after the transfer, consult with or inform his brothers or sisters concerning it, and, in fact, when asked about it by his sister on an occasion some time after the delivery of the deed to him, evasively denied that ho had the property. The consideration recital of the deed is in the usual form, and recites that the grantors, “in consideration of the sum of one dollar to them in hand paid, * * * have granted, liar-gained, sold * * * and conveyed" to the grantee “and his heirs and assigns forever," the four tracts of land above referred to (describing them by their metes and bounds). There is no legal evidence in the case, other than this recital, that the grantors, or either of them, ever received any consideration money for this deed. The defendant (the only other party to the bargain and sale evidenced by this deed now alive and mentally capable of giving competent evidence as to any consideration agreed upon between them) has not been sworn as a witness. The bill prays answer without oath, and the statements of the defendant’s unverified answer, in respect to any consideration, whether responsive or not to the bill, cannot, under the statute and our settled practice, be either regarded or received as evidence against the complainants. So far forth as this deed of “bargain and sale” rests upon a money consideration received, it must, under the evidence, be found and presumed that only the nominal sum of $1 was received, for it by .the grantors—a sum so grossly inadequate as, of itself, when viewed in the light of the circumstances and relations of the parties, to be a convincing proof of fraud or imposition. The rule adopted by Chancellor Vroom in the case of Executors of Wintermute v. Executors of Snyder, 2 Gr. Ch. 490, was that “if the inadequacy be such as to shock the conscience, it will amount to evidence of fraud and will be so considered," citing eases. 2 Pom. Eq. Jur. 927 states the principle -as follows:

“Although the actual cases in which a contract or conveyance has been canceled on account of gross inadequacy merely, without other inequitable incidents, are very few, yet the doctrine is settled by a concensus of decisions and dieta that, even in the absence of all other circumstances, when the inadequacy of price is so gross that it shocks the conscience and furnishes satisfactory and decisive evidence of fraud, it will be a sufficient ground for canceling a conveyance or contract whether executed or executory ; even then fraud, and not inadequacy of price, is the true and only cause for the interposition of equity and the granting of relief.”

In the case of Gifford’s Administrator v. Thorn, 1 Stock. 702, the principle was stated by Chief-Justicé Green (sitting for the chancellor), with a modification, as follows: That “upon a sale of property gross inadequacy of price, joined with inequality in the position of the contracting parties, is a ground of equitable relief.” See, also, Lundy v. Seymour, 10 Dick. Ch. Rep. 7; Weber v. Weitling, 3 C. E. Gr. 441. And in Phillips v. Pullen, 18 Stew. Eq. 836, the opinion of this court, delivered by Mr. Justice Garrison, recognizing that fraud in such cases is the true ground for the interference of equity, lays down the rule in this wise: “Fraud will be presumed from inadequacy of consideration, standing alone, if the inadequacy be so gross as to satisfy the court that it could have been brought about only by deceit or imposition, provided the circumstances and relations of the parties either lend themselves to such a presumption, or are without probative force sufficient to neutralize it.” Testing the present transaction either by the rule as stated by Chancellor Vroom and Pomeroy, that fraud would bo presumed from gross inadequacy of price alone, or by the later modifications announced in Gifford v. Thorn, supra, and by this court in the case of Phillips v. Pullen, just referred to, to the effect that the position, circumstances and relations of the parties are to be considered before the making of such presumption, this deed, so far as its validity depends upon the feature of bargain and sale, cannot bo sustained. The parties to it did not occupy a position of equality. John lived within three or four blocks from his father, and had continual access to him; the other children lived at a distance, and only saw their parents occasionally. The father was, in some degree at least, under the weight of the evidence, enfeebled botli mentally and physically, and the mother, who joined him in the conveyance, instead of being capable of assistance by her advice, must rather have been an obstacle to a correct appreciation by the father of the gravity of the act. The grantors had not the benefit of independent advice in the making of this important transfer. The lawyer who seems to have been consulted about the matter as the “medium of the transfer of the property” was the selection of the grantee alone. No family consultation or arrangement appears ever to have been had or held upon this subject. That the defendant exercised great influence upon the father cannot be doubted. The delivery of this deed to John, divesting, as it did, the father of all his property, without power of revocation reserved by him, and without the slightest legal assurance or security for his future support, is, in and of itself, strong evidence of such influence. The father, when in the son's presence, did not assert his right to confidences with others. It appears, by the undisputed evidence of two witnesses, that in the year of 1895, and also in 1896, at about the time of this transfer, John, by his almost constant presence and repeated entrances into the room where his father (who was sick) was confined, designedly prevented private conversation with the father, and on several occasions, in the early part of the year of 1896, when one of the complainants was engaged in private conversation with the father, John's coming into the room caused the father to “drop the subject” of conversation. Instead of affording his father the fullest opportunity to consult with his other children, and with others, upon private subjects, John, by his conduct, actively discouraged the father's confidences, both with them and others. Not only so, but when his sister, who had heard that he had “got the place,” naturally asked him concerning it, he denied the fact, and answered her in such equivocal language as tended to put her off her guard upon that subject. Without adverting more at length to the evidence upon this head, it must be considered that the circumstances above related and the relations of this favored son to the father were such as to “lend themselves” decidedly to the presumption of fraud, and this instrument cannot stand the applied test. Can the conveyance be supported as a mortgage to secure debts ? In his answer, without oath, to the bill of complaint John charges the truth to be that he

"had for many years loaned and advanced money [no amount is specified] for the purpose of paying taxes, assessments and other charges against the said property, and for the purpose of supporting in comfort”

his father and mother, and that, on February 5th, .1(890, his father

“freely and voluntarily conveyed said property to this defendant in full satisfaction of the money which this defendant had theretofore loaned to the said James Sullivan, and as a recognition of the care and assistance which these defendants had theretofore given to the said James Sullivan and his wife.”

But no evidence can be found in the case showing, or even tending to show, that this charge is true, and it must therefore be held to have no foundation in fact. If we are to regard this deed as a voluntary settlement from donor to donee, and such, there is some reason for believing from the evidence to have been its real character, it cannot be doubted, under the uniform authorities, both English and American, that, at the close of complainants* evidence, the burden of proof was cast upon the donee to establish that the donor fully appreciated what he was doing, or at all events, in the doing had the benefit of disinterested and competent advice. Hall v. Otterson, 7 Dick. Ch. Rep. 528, and cases cited. The facts in White v. White, 15 Dick Ch. Rep. 104, and the authorities there cited by Vice-Chancellor Pitney, are so apposite in almost all respects to the case in hand that ('.special attention is here called to them. See, also, Pironi v. Corrigan, 2 Dick. Ch. Rep. 135, 156, and the English cases of Parfitt v. Lawless, L. R. 2 P. & D. 468; Rhodes v. Bate, L. R. 1 Ch. App. 257.

Can the deed be sustaiiied upon the theory of a resulting or implied trust in favor of the parents for their future support? One o[ the difficulties we meet here is that the defendant, by his statements to his sister (which he has not attempted either to deny or explain), has negatived the existence of any implied trust; on the contrary, he asserted that the property was given him, under what is equivalent to an express parol trust, “to take care of his parents.” In August or September of the year 1898, on a very impressive occasion, when the Reverend Bernard Brogan, the priest of whose parish John was a member, together with the father and sister, were present, in answer to questions asked him as to his obtaining this property from his father, John answered that

“what he had got, he got to take care of his parents; that what was given him he got to take care of his parents, and he was going to take care of them.”

In making this declaration it will be observed that ho expressly antagonized the statements of Ms answer to the effect that the deed was given for money loaned and as a recognition of the care and assistance which he had “theretofore” given to Ms parents. But, aside from this evident contradiction, and the doubt thereby suggested of any previous payment of consideration, it must be apparent that if there had been any agreement between the parties, such as may be inferred from this conversation of John, it discloses an express parol trust entered into by him for the future care of his parents. If such an express trust had been manifested either in the deed when accepted by John, under his signature, or by any other writing, signed by him so as to satisfy the requirements of the statute of frauds, the case would have presented a different aspect. But such a trust cannot arise in this case in favor of the grantors as a resulting trust; their deed, upon its very face, was made for a consideration, though nominal, and the habendum clause declares the use to' be for the grantee. In such a conveyance no use results to the grantor. The authorities upon this branch of equity jurisprudence hold that “where a deed expresses a consideration which is merely nominal, no use results to the grantor, and parol proof that the conveyance was intended to be in trust for the grantor is not admissible and will not raise a trust.” Nor can a trust be implied in favor of the grantor of land, “by deed operating under the statute of uses, in favor of the grantee; where a use is declared, no other use can be shown to result.” 1 Perry Trusts 162; Whyte v. Arthur, 2 C. E. Gr. 523; Hogan v. Jaques, 4 C. E. Gr. 123; Lovett v. Taylor, 9 Dick. Ch. Rep. 311, and other cases cited at top of p. 319; Browne Fraud 111; Leman v. Whitley, 4 Russ. 423.

These declarations of John, if they are to be relied upon as stating the fact, go to establish an express trust, which it must be held was void because not reduced to writing and not signed by him, and was therefore unenforceable. In the court below it was considered that there was no affirmative evidence that this deed was procured by either fraud or undue influence, and the case was compared with that of Le Gendre v. Goodridge, 1 Dick. Ch. Rep. 420, and upon the strength of the comparison the opinion advised the dismissal of the bill. But it will be found by an examination of the instructive opinion filed in that case that the result there reached was based, not only upon proofs showing “perfect capacity” in the grantor to make the deed, but also, in a very marked degree, upon the testimony of the grantee, who met the burden of proof by swearing, inter alia, that “the first she knew that her mother contemplated making the deed was when she announced that she would make it,” and that “she did nothing designedly to put a desire in her mother’s heart or mind to make” the deed. Vice-Chancellor Van Fleet was thus evidently convinced by the testimony of the grantee that the purpose to make the deed was, to use his forcible language, the “spontaneous product of the grantor’s mind,” and that it “originated entirely with her, without solicitation, hint or suggestion of any kind from the grantee.” We have no such assurances from the accused grantee in the case in hand. On the contrary, he has advisedly elected to remain silent as a witness, and to challenge only the legal sufficiency of .complainants’ evidence to sustain the burden of proof as to the charges of fraud and imposition against him upon which their right to relief depends. But in view of the circumstances and relations of the parties above narrated; in view of the complainants’ proofs showing the designed concealment and misrepresentation by the defendant of the fact of the conveyance to him when information was asked of him by his sister, and when it was his duty to disclose the truth to her; in view, also, of his interference on several occasions with free conversation between his father and sister, and also between Ms father and Mary Dawson, the burden of proof was, I think, thrown upon him to rebut and overcome, by evidence, the presumption of fraud, which these facts, in connection with the recital in his deed of his payment of only a nominal consideration for the property, raised up against him. In this he has utterly failed. Matters of grave-moment seem to me to enter into the questions presented for our decision upon this appeal. They involve the extent of the protection and relief which courts of equity will deem it their duty and within their equitable powers to afford, in their anxiety to restrain improvidence—to prevent the success of fraud and imposition attempted to be practiced upon the aged and feeble-minded—to secure to those having equal claims upon parental generosity the equality of the division of property against the schemes of grasping avarice, thus to preserve the ultimate peace and happiness of the family circle from lifelong animosity, certain to be aroused by any attempt to obtain from old and trusting parents any unfair advantage in the disposition of their property. These, and other considerations relating to the policy of,our laws for the exemption of the public from charges for the support of the poor and the improvident, all unite to condemn the transaction which forms the subject of this suit. The decree below should be reversed, and a decree entered in favor of the complainants declaring the deed void, in accordance with the prayer of the bill.

For reversal—The Chiee-Justice,Yan Syckel, Dixon, Garrison, Gummere, Collins, Bogert, Yredenburgh, Voorhees, Vroom—10.

For affirmance—-Garretson, Hendrickson, Adams—3.


author: Voorhees, J.

text:
    John W. Bennett, defendant and appellant, v. Isabella A. Bennett, complainant and respondent.
    [Filed June 25th, 1901.]
    Where the remedy at law is ample, the court of chancery will not interfere to compel specific performance of a decree of another state.
    On appeal from a decree advised by Vice-Chancellor Pitney, granting alimony and the custody of children.

      Messrs. Parker & Van Gelder, for the appellant.

      Mr. Samuel A. Patterson, for the respondent.
   The opinion of the court was delivered by

Voorhees, J.

The appeal in this cause is taken from a decree of the court of chancery, which, among other things, directs the payment of certain moneys decreed to be paid by the appellant to the respondent by the district court of the third judicial district of North Dakota.

The parties had been residents of New Jersey, were married here, and had children; the husband moved to North Dakota, commenced proceedings for divorce, and the wife entered an appearance in the cause, filed an answer and was represented by counsel. The court granted a decree dissolving the bonds of matrimony, and directed the husband to pay certain sums of money at certain times, therein set forth, to the wife for the education, support and maintenance of their minor children. It gave the wife the custody and control of the children, but directed that the husband be allowed to see them at reasonable times and that he .he permitted to take and keep them from the 1st of July to the 1st of September in each year. A copy of the decree is included in, and makes a part of, the bill of complaint. The relief prayed for was that the defendant be directed to pay to the complainant the moneys decreed to her by the North Dakota court.

The defendant, in his answer, admitted the substantial averments of the bill, but denied that the complainant had shown such right or interest therein as entitled her to the relief of a court of equity, and claimed the same benefit of such objection as though he had formally demurred to the bill of complaint. He then attached a cross-bill, in which he prayed for affirmative relief in certain matters connected with the former decree in case the complainant should be successful in her application and the demurrer be overruled.

The defendant, in effect, demurred to the bill when he claimed the benefit of the objections set forth by him as though he had formally demurred thereto.

Chancellor Zabriskie, in Veghte v. Raritan Water Power Co., 4 C. E. Gr. 142, said: “This objection as taken here is really a demurrer, and is none the less so because written on the same sheet, between the paragraphs of the answer, instead of being engrossed and filed as a separate paper.”

The filing of the cross-bill after demurrer to the bill of complaint did not prevent the court from considering whether the bill of complaint was demurrable.

A litigant may demur to a part, answer to part and plead to a part of a bill; .all the modes of defence may be joined, provided each relates to separate and distinct parts of the bill. Mitf. PI. 106; Story Eq. PI. 439.

The effort of the complainant in this cause was to procure, ■the court of chancery to specifically enforce so much of the decree of the North Dakota court as directed the payment of money.

Article 4, section 1 of the constitution of the Hnited States provides: “Full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every other state.” This provision does not make the foreign decree or judgment a record to be enforced withoiit further proceedings in the state to which it is taken, nor does it refer to the remedy or means of enforcing it, but only provides that the facts found in the foreign court upon which the judgment or decree was entered cannot be inquired into by the courts, of the sister states.

Mr. Justice Catron, in D’Arcy v. Ketchum, 11 Row. 175, said that “a judgment where the defendant had been served with process concluded such defendant, when sued thereon in another state, from going behind the original cause of action in like manner as he was concluded in the state where the judgment was rendered.”

A judgment of another state is a debt of record, not examinable upon its merits, but it does not carry with it 'into another state the efficacy of a judgment upon property or upon persons to be enforced by execution; to give it that force it must be made a judgment there and can only be executed in the latter as its laws permit. McElmoyle v. Cohen, 13 Pet. 312; Bank v. Dalton, 9 Row. 522; Mills v. Duryee, 7 Cranch 485.

It was held in Bullock v. Bullock, 6 Dick. Ch. Rep. 444, that such judgment, when properly obtained, is conclusive evidence in another state of the matter litigated, but can only be enforced in such sister state by another suit. This case was affirmed (7 Dick. Ch. Rep. 571), in which Mr. Justice (now chancellor) Magie said: “When the foreign court was empowered to dissolve the bonds of matrimony, it would be clothed with authority to determine the amount of alimony and render judgment therefor, but it. could not require security for the payment of alimony to be given by mortgage of lands beyond its jurisdiction.” And further on (at p. 567) said: “If, by the decree to pay alimony, an indebtedness arises, from time to time, as such payments become due, an action at law would lie thereon, and the foreign decree would form conclusive evidence of such indebtedness.”

A decree for divorce with an allowance for alimony or support is as much a judgment as if it had been obtained in a common law court. Barber v. Barber, 21 How. 582.

The effect of a judgment or decree recovered in one state when certified to another state, under the act of congress and tlie above-stated clause of the constitution of the United States, is to furnish an indisputable- proof of the amount due, where both the parties were properly before the court, but does not authorize a judge or chancellor to proceed upon such decree or judgment until recovery shall have been had thereon in the court of the state to which the same had been transferred.

In Bullock v. Bullock, 28 Vr. 508, the supreme court held that an action at law may be maintained in this state upon a decree for-alimony made in New York, if the New York court had jurisdiction of the subject-matter and of the person of the defendant.

Mr. Justice Field, in Public Works v. Columbia College, 17 Wall. 521, said: “It must be shown that legal means for the collection of debts have been exhausted before the court of chancery will interfere.”

The general rule is that the court of chancery will not take jurisdiction of a cause where no fraud or special equities appear and there is an adequate and complete remedy at law. Agens v. Agens, 5 Dick. Ch. Rep. 566; 1 Pom. Fq. Jur. § 178.

The complainant below undertook to recover from the defendant moneys decreed to her by the court of North Dakota. The defendant demurred to the bill-upon the ground that she had a full and adequate remedy to recover the same in the courts of law; no question was raised by her prayer -requiring the interposition of the court of-equity; the remedy at law was ample, and the court of chancery erred in overruling the demurrer and undertaking to specifically enforce the decree. The decree of the court of chancery should be reversed and the bill dismissed.

For reversal—Ti-ib Chief-Justice,Van Syckel, Dixon, Garrison, Gummere, Collins, Fort, Garretson, Hendrickson, Bogert, Krueger, Adams, Yredenburgi-i, Yoori-iees, Yroom —15.

For affirmance—None.


text:
    George Bayliss and The Mayor and Council of the Borough of North Arlington, appellants, v. The Newark and Hackensack Traction Company, respondent.
    [Filed July 2d, 1901.]
    The jurisdiction of the court o£ chancery denied in the case stated.
    On appeal from a decree advised by Vice-Chancellor Pitney.

      Mr. Addison Ely, for the appellants.

      Mr. Charles D. Thompson, for the respondent.
   The opinion of the court was delivered by

Voorhees, J.

The Newark and Hackensack Traction Company was operating a traction road on Belleville avenue, in North Arlington, under and by virtue of an ordinance of the borough passed December 16th, 1896; this ordinance provided that the rails comprising the tracks of the company should be laid so as to conform to the surface of the avenue at the time they were laid, and should be raised or lowered at the expense of the company to conform to any alteration of the grade which might thereafter be made by the borough.

On the 24th of May, 1900, George Bayliss, the mayor of the borough, saw a body of men at work on the company’s tracks on Belleville avenue. They had proceeded about four or five feet over the line dividing the town of Kearny from North Arlington when he approached the foreman and asked them what they were doing; he was informed by him “that they were raising the tracks through there.” He notified the foreman that he could not proceed further with raising the tracks through the borough; that they were already above the surface of the street, and that he would not, as mayor of the borough, permit them to be raised to any higher elevation.

The company then applied to the court of chancery and procured an order to show cause, with a restraining order, commanding the mayor and council to desist and refrain from interfering with the work of the company on their tracks in the borough. This injunction was afterwards made perpetual. The company had no further or greater authority in the avenue than was granted to it by the ordinance. They were required, under its terms, to maintain the tracks so that they should conform to the surface of the avenue. It appears that the rails were at that time beyond the restrictions of the ordinance and above the surface of the street, and the mayor was informed by the foreman in charge of the workmen that they were in the act of raising them still higher. As the executive officer of the borough he directed them to stop the work and forbade further raising of the tracks. Ho force or violence was used, and the mayor does not appear to have done any improper cr unlawful act. He was justified, from the information he received, in forbidding further elevation of the tracks and (in ordering the work thereon to stop. The facts do not justify the interference of the court of chancery, and the injunction should be dissolved and the bill dismissed.

For reversal—"Van Syckel, Dixon, Garrison, Gummere, Collins, Garretson, Hendrickson, Bogert, Krueger, Adams, Vredenburgh, Yoorhees, Yroom—13.

For affirmance—None.


author: Per Curiam.

text:
    Simon E. Bernheimer et al. v. William P. Verdon et al.
    [Filed June 19th, 1901.]
    On appeal from a decree advised by Vice-Cháneellor Stevens, whose opinion is reported in 49 Atl. Rep. 752.

      Mr. John J. Fallon, for Bernheimer.

      Mr. Robert 8. Hudspeth, for Verdón.
   Per Curiam.

The decree appealed from by both sides in this ease is affirmed, for the reasons given in the court of chancery, except that the date of January 31st, 1900, stated by mistake in the decree, should be changed to January 31st, 1899.

For affirmance—The Chief-Justice, Van Sycicel, Dixon, Garrison, Gummere, Collins, Fort, Garretson, Hendrickson, Bogert, Krueger, Adams, Vredenburgh, Voorhees, Vroom—15.

For reversal—None.


author: Depue, Ci-iief-Justice.

text:
    Richard D. Norton, complainant and respondent, v. John Sinkhorn and Charles B. Walton, partners, &c., defendants and appellants.
    [Filed November 15th, 1901.]
    1. Bill filed by Norton, a subcontractor, against S. and W., contractors with the county of M. for building a road. The lien was filed under the act passed March 30th, 1892 (Gen. Stat. p. 207S), to secure the payment of laborers and others employed upon or furnishing materials in the performance of any work for public improvement in the municipalities of this state.—Held, that a proceeding under this act is a proceeding in rem, a controversy over the particular fund, involving the amount due the contractor from the municipality for'the work done, and the amount due to the lien claimants, respectively. No personal judgment, either for or against a lien claimant, can be given. Nor does the statute provide for a judgment against a municipality in case the amount due to the contractor exceeds the sums due to the lien claimants.
    2. In the suit under this statute the court is required to determine the validity of each lien claimed, the amount due from the municipality to the contractor under his contract, and from the contractor to the respective claimants, and by a decree or order direct the municipality to pay out of the sum found to be due from the municipality to the contractor, to the several claimants, for work done and materials furnished in the execution of said contract, so much as will satisfy their liens or claims, to the extent of the amount due from the municipality to the contractor. The act. does not provide for any judgment or decree in favor of the claimants for any balance that may remain due after the fund is exhausted.
    3. A set-off with respect to the rights and liabilities of the parties to the suit is considered as a cross action brought by the defendant. The right of set-off is restricted to liquidated damages. If the amount found due to the defendants from the plaintiff shall equal or exceed the amount due the plaintiff on his cause of action, the defendant shall be entitled to a verdict and judgment; and in case the amount due to the defendant shall exceed the amount which shall be due to the plaintiff, the defendant shall have judgment for such excess.
    4. Recoupment is a claim in abatement of the damages to be recovered by the plaintiff by reason of the plaintiff’s failure to perform obligations which, by the same contract, devolved upon him, whereby the defendant has sustained damages. It applies to cases where the damages are unliquidated as well as where they may be considered liquidated.
    5. The complainant’s bill set out that the complainant had performed labor and furnished materials, namely, stone, to the contractors, in and about the work of macadamizing and grading a public road under a contract by the defendants with the board of freeholders of the county of M. To this bill the contractors filed an answer, setting up an abatement of the amount alleged to be due from their firm to the complainant because the defendants were obliged to pay the sum of $684 for demurrage to a railroad company on carloads of stone shipped by the defendants, which, by the contract, the complainant was obliged to haul and distribute upon said road, but which the complainant allowed to remain at said stations an undue length of time, thereby subjecting the same to the charge for demurrage aforesaid which the defendants were obliged to pay.—TLeUL, '(1) that this is not a claim by way of set-off, but is a claim of recoupment for unliquidated damages; (2) that this claim was properly made in the answer. It was also made in the answer by way of cross-bill, which was properly struck out, for the reason that in the proceeding under this statute there could be no judgment in favor of the complainant as against the contractor as a debtor.
    6. The order of the chancellor striking out that part of the answer is reversed; the order striking out the answer by way of cross-bill is affirmed, and an order should be entered that the fund be retained in the court of chancery and the case be allowed to stand over until the defendants shall have their damages, arising from the breach of contract by the complainant set out in the answer, assessed in a court of law, within such time and in such manner as the court of chancery may direct.

      On appeal from an order advised by Vice-Chancellor Grey striking out part of the defendants’ answer and dismissing cross-bill.' See opinion reported in 16 Dick. Ch. Rep. SOS.

      Messrs. Beasley £ Walker, for the appellants.

      Mr. Linton Saitertkwaii, for the respondent.
   The opinion of the court was delivered by

Depue, Ci-iief-Justice.

The-facts of this case are so fully set out in the opinion of Vice-Chancellor Grey that a brief statement is all that will be necessary here. Briefly, the case is this: The defendants, Sink-horn & Company, entered into a contract with the board of chosen freeholders of the county of Mercer on the 24th of March, 1900, for the grading and macadamizing of a public road in the county of Mercer. The firm entered upon the performance of the contract and completed it on or about the 27th of October, 1900. The bill charges that, under the contract, the sum of $3,000 was due and payable by the board of freeholders upon the completion and acceptance of the work of macadamizing said road. It also charges that between September 1st. 1900, and October ’28th, 1900, the complainant, Norton, performed labor for the said Sinkhorn & Company in and about the work of macadamizing and grading said road and towards the completion and performance of said contract with the board of freeholders, by furnishing to them teams and drivers and carting stone and other materials, and that he sold and delivered to Sinkhorn & Company certain materials which were used in the performance and completion of the road, under said contract, to the amount of $862.50. The bill further charges that on or about the 29th of October, 1900, and within fifteen days after the completion of said work, the complainant filed with the director of the board of freeholders, and with the collector and financial officer of said county, a notice that the complainant claimed a lien on the moneys in the hands or under the control of the board of freeholders of the county of Mercer, due or to grow due under said contract, pursuant to an act entitled “An act to secure the payment" of laborers, mechanics, merchants, traders and persons employed upon or furnishing materials toward the performing of any work in public improvements in cities, towns, townships and other municipalities in this state,” approved March 30th, 1892. Gen. Stat. p. 2078. No answer was filed by the county, and the balance due to Sinldiorn & Company from the county is not disputed.

The defendants filed an answer, in the course of which they set up an abatement of the amount alleged to be due from their firm to the complainant, reducing it to the sum of $259.20, because, the defendants aver, that they were obliged to pay the sum of $684 for demurrage to the Pennsylvania Railroad Company, by reason of carloads of stone shipped by the defendants to Windsor and liighistown, in the county of Mercer, and which, by the terms of the contract between the complainant and the defendants, the complainant was obliged to haul and distribute upon said road, but which the complainant allowed to remain at the said stations for an undue length of time, thereby subjecting the said carloads of stone to the charge for demurrage aforesaid, which the defendants, as the shippers of the same, were obliged to pay. The answer further sets out that the complainant agreed with the defendants to cart said stone in quantities of two hundred tons per day, and by reason of said complainant carting less than two hundred tons per day, as aforesaid, the said claim for demurrage arose, which said claim the defendants would not have been obliged to pay but for the default and neglect of the complainant to perform his contract in that behalf, &c.

. The same facts are set out in the answer, .by way of a cross-bill, which concludes with a prayer that an account may be taken between the complainant and the defendants, and that, by the order and decree of the court of chancery, the complainant may be decreed to pay to the defendants the true balance and amount owing from him to them, and also for other and further relief.

On notice an order was made by the court of chancery that so much of the answer filed by the defendants as claimed a reduction from the amount claimed by the complainant for materials furnished and labor performed, &c., on account of the demurrage alleged to have been paid by the defendants on carloads of stone, be and the same was thereby stricken out of said answer, and further, that the answer by way of cross-bill be dismissed. From this order this appeal was taken.

The construction of this statute is settled by the opinion of this court in Delafield Construction Co. v. Sayre, 31 Vr. 449. This court there held that suits to ascertain and enforce the liens given by the act in question must be brought in the court of chancery. The reasoning upon which that decision was based was that, in such a case, “the court is to determine the validity of each lien claim, the amount due upon it and the amount due to the contractor from the municipality, and is to render judgment directing the municipality to pay over to the several lienors the sums found to be due to them respectively, so far as the fund will go, according, to the priority prescribed by the act. * * There is no provision [in this statute] for a personal judgment against the contractor as a debtor, but the right of the claimants to obtain such judgment against him in other actions is expressly preserved.” It was for this reason that this court held that suits under this act were cognizable only in the court of chancery. In other words, the proceeding is in rem—a controversy over a particular fund, involving only the amount due to the contractor from the municipality for the work done and the amount due to the lien claimants respectively. Section 8 of the act makes this construction clear. It provides that the court “shall determine the validity of the lien, the amount due from the debtor to the contractor under his contract, and from the contractor to the respective claimants, and shall render judgment directing that the city, town, township or other municipality shall pay over to the claimants for the work done and the materials furnished in the execution of said contract or contracts, whose claims ox liens it shall hold to be valid and just, in the order of their priority as determined b3r said court, to the extent of the sum found due to said claimants from the contractor, so much of said funds or money which may be due from the city, town, township or other municipality to tlae contractor, under his contract, against which the lien is filed, as will satisfy their liens or claims, with interest and costs, to the extent of the amount due from said city, town, township or other municipality to said contractor.” Gen. Siat. p. 2079. The questions raised in this case are controlled by this statute. Where the amount due to the contractor is undisputed, the sole questions for adjudication is the amount due to the lien claimants respectively from the contractor. When that has been ascertained, then the function of the court is to apportion the amount due the contractor among the lien claimants in the proper proportion, provided the fund under the control of the court is sufficient to answer that purpose; if not sufficient, then pro rata until the fund in hand is exhausted. At this stage the jurisdiction of the court under the statute ends. No personal judgment, either for or against a lien claimant, can be given; nor does the statute provide for a judgment against a municipality in case the amount due to the contractor exceeds the sums due to the lien claimants.

By statute, a set-off, with respect to the rights and liabilities of the parties to the suit, is considered as a cross-action brought by the defendant. Practice act § 131/.J Gen. Stat. p. 2555. The statute which gives the right to set-off restricts the right to liquidated damages. It also provides that if, on the trial, the amount found to be due to the defendant on his set-off shall equal or exceed the amount due to the plaintiff on his cause of' action, the defendant shall be entitled to a verdict and judgment, which verdict and judgment shall, in case of such excess, be for the amount or balance which shall appear to be due to the defendant on the adjustment and allowance of the debts and demands of the parties under the act. Gen. Stat. p. 3109. In Naylor v. Smith, 34. Vr. 596, it was held by this court that a builder, sued under the Mechanics’ Lien act, could not set-off claims due to him from the plaintiff in a different right. Mr. Justice Garrison, in delivering the opinion of the court, uses this language: “The statutory remedy of set-off rests, in spirit and in reason, upon the avoidance of circuity of action, by compelling the adjustment, in one suit, of all such mutual demands as are counter-claims. When, therefore, the legislature has created an action that does not admit of this mutuality of adjustment, it has created one to which neither the spirit, the reason nor the statute of set-off applies.” -If the claim set up by the defendants, in their answer, be considered as a set-off or counter-claim, it cannot be made available to the defendants in any proceeding, under the statute, in virtue of which this suit is maintained.

But the defendants’ claim, as set out in the answer, is not a counter-claim for liquidated damages, such as would constitute-it a set-off. The claim set out in the answer is for unliquidated damages arising from the failure of the complainant to perform his contract according to its terms. The distinction between a set-off and recoupment is well settled. Recoupment, at common law, was a claim in reduction of the amount due to the party. It was defined in section 129 of the Practice act (Gen. Stat.-p. £656), and in the second section of the supplement of March 30th, 1896, in these words:

“In actions on contract, whether under seal or not, the defendant may set up as a defence in abatement of the damages to be recovered by the plaintiff, a defect in or partial failure of the consideration of the contract sued on; the defendant may also recoup all damages which he may have sustained by reason of any cause of action arising out of the contract or transaction set forth in the plaintiff’s declaration as the foundation of the plaintiff’s demand, or connected with the subject of the action.” P. L. of 1896 p. 186.

It will also be borne in mind that the doctrine of recoupment had been adopted in courts of equity long before it was introduced, by statute, into the practice of courts of law.

The principle that lies at the foundation of this doctrine is that the amount which the plaintiff is entitled to recover shall be abated or reduced by reason of his own failure to perform obligations which, by the same contract, devolved upon him, whereby the defendant has sustained damages. In substance 'and effect, it may be likened to the reduction of the amount recoverable upon a contract because of a failure of consideration. There is.great propriety in the application of that doctrine to cases of this kind. The controversy over the distribution .of such a fund concerns all the lien claimants, where there are more than one lien claimant. A court of equity cannot “decide as to the extent, justice and priority of the claims of all parties” ■without considering such a defence, if it is property presented. Inasmuch as a defendant, under such circumstances, has an option either to use recoupment in reduction of the amount recoverable against him, or to waive it in that action and bring a separate suit to recover his damages,' it is settled, by all the cases, that a defendant who has made his election to recoup must give notice of his purpose to do so by an appropriate form of pleading.

In the present case the defendants gave notice of their election to recoup their damages by setting out their claim in the answer. The question then arises as to what disposition shall be made of that part of the answer. The vice-chancellor directed that it be struck out. This ruling appears to have been made on the ground that a court of equity cannot entertain a claim for the recovery of unliquidated damages. This principle is well settled in terms as laid down by the vice-chancellor. Trotter v. Heckscher, 13 Stew. Eq. 656, and Alpaugh v. Wood, 18 Stew. Eq. 157. But, nevertheless, we think the order striking out this part of the answer, considered simply as notice of the purpose of the defendants to claim recoupment, was erroneous. We think the fund should be retained in the court of chancery, and the case allowed to stand over until the defendants shall have their damages arising from the breach of contract by the complainant set out in the answer assessed in a court of law, within such time and in such manner as the court of chancery may direct.

That part of the answer which is in the nature of a cross-bill is superfluous, and is not adapted to present the defence. It is true that, by the act of 1896, it is provided that if the amount of such damages recouped shall exceed the demand of the plaintiff, that judgment shall be given in favor of the defendant and against the plaintiff in such action for such excess, with costs; but that part of the statute is inapplicable to this procedure. There is in this statute no provision for a personal* judgment against the contractor as a debtor. The proceeding is in rem— a controversy over a particular fund, involving only the amount due to the contractor from the owner and the amount due to the lien claimants respectively. This part of the answer, which is in the nature of a cross-bill, was properly struck out by the vice-chancellor. To that extent, the order appealed from is affirmed; but that part of the order which directed the striking out of the same allegations in the answer should be reversed, and a decree entered in accordance with the views expressed in this opinion.

No costs shall be allowed to either party.

For reversal—-Ti-ie Chief Justice, Yan Syokel, Garrison, Gummere, Garretson, Hendrickson, Bogert, Adams, Yre-DENBURGH, YOORI-IEES, YrOOM—11.

For affirmance—None.


author: Dixon, J.

text:
    Charles C. Keen, complainant and appellant, v. The Maple Shade Land and Improvement Company et al., defendants and respondents.
    [Filed November 15th, 1901.]
    1. Under the circumstances of this case the dealings between the complainant and the agent and officers of a corporation created a contract binding on the corporation.
    2. A domestic corporation contracted to sell to the complainant a lot of land which it did not own, and received part of the price therefor; after-wards it was dissolved by voluntary action, under section 31 of the Corporation act (P. L. of 1896 p. 277), and its assets, more than sufficient to reimburse the complainant, were divided by the directors among the stockholders, without paying the complainant.—Held, that under sections 54 and 55 of said act the directors were personally chargeable with the debt due the complainant, and his bill in chancery could be maintained against them as trustees for discovery and relief.

      On appeal from a decree advised by Vice-Chancellor Grey, whose opinion is reported in 16 Dick. Ch. Rep. 497.

      Messrs. Carr & Stackhouse, for the appellant.

      Mr. David J. Pancoast, for the respondents.
   The opinion of the court was delivered by

Dixon, J.

The object of this suit is to recover from the defendants, the directors of the Maple Shade Land and Improvement Company, the money paid by the complainant as the price of a plot of ground known as lot 154.

The company was organized to deal in real estate, and in June, 1896, appointed James P. Demaris as its sales agent and delivered to him a map of its property on which the said lot appeared. In'fact, the company did not then own lot 154, and it is claimed by the defendants, but denied by Demaris, that he was then so informed. In July, 1896, Demaris, as agent for the company, sold the lot to the complainant and delivered to him a contract, partly printed and partly written, the terms of which bound the company to convey the lot to the complainant on payment of $275, which was payable in installments. This contract was signed by the proper officers of the company—the president and secretary—who testify, however, that they had signed the printed form in blank before the sale was made, and had given it thus to Demaris to be filled up by him in case he made a sale, while Demaris and his assistant swear that it was completely drawn before it was signed. In pursuance of this contract the -complainant paid several installments to Demaris, who turned them, less his commission, over to the treasurer or president of the company and received therefor proper acknowledgments, signed by one of those officers, as for purchase-money of lot 154. After paying $250 the complainant learned that the company had sold that lot before making the contract with him, and so could not carry out the agreement, and thereupon he demanded from the defendants repayment of his money, which was refused. The company had then been dissolved, by voluntary action, under section 31 of the “Act concerning corpora-lions” (P. L. of 1896 p. 277), and the assets, which are admitted to have been sufficient to meet the complainant’s claim, had been divided among the stockholders. This state of facts being shown by the pleadings and proofs, the court of chancery dismissed the bill, oh the opinion of Vice-Chancellor Grey that the sole basis of suit charged in the bill was a fraudulent contrivance on the part of the company to cheat the complainant by falsely pretending to own lot 154, which charge was not sustained by the testimony.

We think the complainant is not so restricted. The bill explicitly charges the directors with breach of trust in refusing and neglecting to apply the assets of the company to the payment of debts upon its dissolution, according to the statute, and on that basis seeks discovery of the assets and of the disposition made of them, and prays that the directors may be decreed to pay the complainant’s debt in case such misappropriation of assets appears. The complaint thus framed rests upon sections 54 and 55 of the Corporation act, above cited, which declare that on the dissolution of any corporation the directors shall be trustees thereof, with full power to settle its affairs, collect the outstanding debts, sell and convey the property, and divide the moneys and other property among the stockholders, after paying its debts, so far as such money and property will enable them, and that the directors thus made trustees shall be suable in their individual capacities for debts owing by the corporation, and be jointly and severally responsible for such debts, to the amount of the moneys and property of the corporation which shall come to their hands as such trustees. To establish a breach of the trust thus imposed, and to ascertain the measure of responsibility incurred by such breach, the jurisdiction of chancery is peculiarly appropriate.

It remains to determine whether the debt has been proved.

We think the general terms in which the company delegated to Demaris authority to sell, the form of the written contract expressed as being made by the company with the complainant for the sale of lot 154 and signed by the company’s president and secretary, whether before or after it was filled up, and the receipt of several installments of the price by the company’s treasurer and president, with notice that the installments had been paid by the complainant for lot 154, preclude the company from contending that it was not bound by the agreement. Remembering that the ordinary business of the company- was the sale of lots, it is difficult to see what more could be required to constitute such a contract with it, than that its agent should negotiate the sale on its behalf, its administrative officers should execute a written agreement for the sale, and its financial officers should receive the price.

It also appears that the reception by Demaris of the several installments was within the scope of his authority as agent of the company, for the secretary testifies that “Mr. Demaris was our recognized agent, in good standing with us,” and the president testifies that Demaris’ duty was “to notify us of the sale of the lot or lots, and he was to make a weekly return to us of the money he received, less his commission.”

This testimony clearly indicates that payments to Demaris of the price of lots sold by him as agent of the company were payments to the company.

Our conclusion therefore is that the decree appealed from should be reversed, and a decree be rendered that the complainant is entitled to recover of the individual defendants the principal of $250 and interest on the several installments from the time of their payment to Demaris.

For reversal—Van Syokel, Dixon, Garrison, Gummere, Collins, Fort, Garretson, Hendrickson, Bogert, Adams, Yredenburgh, Yoorhees—12.

For affirmance—Yroom—1.