text:
    Mary McDermott, respondent, v. Lynn M. McDermott, appellant.
    [Decided October 21st, 1920.]
    On appeal from a. decree of the court of chancery advised by Vice-Chancellor Griffin, who filed the following opinion:
    “The bill in this cause is filed for maintenance based on extreme cruelty. The parties were married in January, 1915. A week before the first child was born, which, .as I recall it, was the latter part of 1915, he threw a shoe at her, strildng her in the stomach, apparently -without reasonable provocation. On September 28th, 1915, he threw a pocket-book at her, striking her in the face and bruising her. On July 15th, 1917, he threatened to kill her. All the foregoing acts of cruelty are corroborated, and I take them to be true, notwithstanding his sole denial.
    “The wife charges that on October 25th, 1915, he threw her downstairs. This is not corroborated. In October, 1915, she says he threw her down and had a carving knife in his hands, and, fearing that he would use it on her, she bit him in the arm. He says he now bears the scar from this. His story is that she threatened him with the knife, and he took it out of her hands, and that she bit him. Neither side is corroborated as to this.
    “On May 11th, 1919, she says he punched her in the jaw, raising a swelling, and struck her on the leg with a file, leaving a blue bruise. The existence of the swelling and the bruise is testified to by Mrs. Schofield, who says that on the same afternoon she asked the defendant what was the matter with them1, and he said that ‘she got fresh and he hit her/ I regard this, therefore, as corroboration.
    “The wife also ,sa]rs that on June 2d, when about to retire, she, being in her menstrual period, he desired to have sexual intercourse, and she declined on account of her condition, and that he seized her by the hand, wrenched her wrist, forced her into bed and forced the intercourse, which resulted in a prolonged flowing, for which she afterwards sought a doctor. The doctor testified to his treating her, but said that while this flow could come from intercourse during the menstrual period, yet it could also come from other causes. She left him on the 3d of June, 1919, and filed her bill on June 7th, 1919. About a month after she left she called him on the ’phone and asked him to come to see her, and he told her to see his lawyer. She, also, had a lawyer at the time.
    “At the hearing neither party appeared willing to resume marital relations, he putting it on the ground that he wanted her to reform, namely, to stop nagging him; and she, on the ground that she was afraid of a continuation of his cruelty, and said that if she knew he would reform she would live with him.
    “I think the evidence clearly demonstrates that the defendant was guilty of extreme cruelty. Close .v. Close, 25 N. J. Eq. 526; 2 Bid. Div. Frac. 96. . I am satisfied, from the character of the defendant as portrayed by the testimony, that he has not repented of his misconduct, and there is no reasonable certainty that he will amend his ways; thus, the defendant, if she returned, could be reasonably apprehensive of a continuance of his past conduct.
    “The husband denies, in tolo, the charges made against him, but I think it is perfectly plain that they are true, at least, in so far as the corroboration extends.
    ' “As a counter-charge against the wife (not, as I take it, in justification of his conduct) he asserts that his wife was a nagger; that she called him a 'dope’ and a 'poor fish;’ I cannot bring myself to believe that, giving the greatest effect to. these charges, they would justify the action of the husband. Duvale v. Duvale, \&> ,N. J. Eq. Ill; affirming, 84 Atl. Be,p. 888, and the cases cited, in the note to 2 Bid., Div. Frac. 98. But I am satisfied, from the appearance and demeanor of the complainant on the stand, that she was not a nagger. She may have had cause to complain against her husband for his inability to support her. But there was not the slightest indication in the personality of the complainant which would support the theory that she was anything other than of normal temperament. The witnesses in her behalf testify to her even temperament, and the only testimony to the contrary is that of the parent and the relatives of the defendant, all of whom, as I perceived them on the stand, gave exaggerated opinions of the conduct of the complainant; but, giving all the weight that necessarily attaches to this testimony, I am not prepared to say that, in any one instance, tire assaults made by the husband on the wife were, based upon any provocation.
    “I will advise a decree for the-complainant.
    “In view of tire- fact that tire wife is now earning $15 a week, and the husband $34, I will allow the wife, at the present time, $5 a week, with leave to apply to change the allowance if the situation of the parties changes.
    “Counsel may come before me with a form of decree on- Monday, the 19th of January, 1920, at the chancery chambers at Jersey City.”

      Mr. Brie JentZj for the respondent.

      Mr. Edward Stover, for the appellant.
   Per Curiam.

The decree appealed. from will be affirmed; for the reasons stated in the. opinion filed in the court below by Vice-Chancellor Griffin.

For affirmance—The Chief-Justice, Swayze, Trenci-iard, Bergen, Minturn, Kaliscit, Black, Katzenbaoi-i, White, Hehpenheimer, Williams, Taylor, Gardner, Ackerson—14.

For reversal—None.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Clifton N. Phillips, appellant, v. Martha K. Thomas et al., respondents.
    [Decided October 21st, 1920.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, who fitted the following opinion :
    “I entertain the view suggested early in the argument that this case is purely a question of evidence; in the last analysis it reduces itself to that, and that alone, in my judgment. The inquiry is": Does the evidence justify with clearness a finding of fact that an option of purchase' for $10,500 was given at the time the lease was made ?
    “The lease contains what has been referred to' as an option of purchase. I scarcely know whether it can. be called that or not. It is clearly meaningless, or forceless, at best. It, in terms, gives to the tenant an option of purchase without specifying anything more, consequently, it gives him nothing in the form it is executed. Now, what was in fact agreed upon and intended to be put in that lease is not at all free from doubt in my mind, and the existence or non-existence of such doubt is the test of right to relief in a specific performance case. The law will not privilege a court of equit]r to grant that form of relief where there is an element of material and substantial doubt, either of law or of fact. It may have been that when that lease was signed both parties clearly understood that they were obligating the landlord to sell that property at any time during the succeeding year to the tenant for $10,500 in cash; it may be, I say, that Mrs. Thomas understood that and that Mr. Phillips intended to state that when he wrote the lease, but it is-far from certain that either of those propositions is true. Mrs. Thomas on her part says she did not know there was an option in the lease, and that never prior to that time had she given him a price on that property in the nature of an option. If her testimony is true, she signed the lease without knowing there was any suggestion of an option of any kind in the lease or without realizing that she was obligating herself in any manner to sell that property for a given price, should the tenant elect to take it, during the succeeding year.
    “Nor do I think it clear that in the form that the supposed option is expressed it was really intended to be anything more than that type of option which we frequently find in leases which gives a tenant what is called the preference right of purchase. In other words, the landlord engages that if a purchaser is found the tenant shall have the first right at the proposed selling price. There is nothing in the form of the imperfect option that clearly indicates that it may not have been intended to be of that nature, and if the testimony of Mrs. Thomas is at all to be relied upon, I think it is very doubtful whether she ever understood that she ever was under any obligation greater than that to Mr. Phillips. Her'testimony is that she never offered it to him for a given price, either by option or otherwise, prior to the succeeding March; that she did not know that this option was contained in this lease in any form, and I very much doubt whether any court of equity in a specific performance ease would have the right to disregard her testimony under all the circumstances that are here present.
    “Of course, these inquiries could not be indulged at all, but for the fact that in the following October Mrs. Thomas signed a writing, in effect, reciting that she had in tire preceding January given an option to Mr. Phillips for the succeeding year at a price of $10,500. If the option given in January had in fact been to that effect, and had been imperfectly stated in the lease, I can see how the subsequent writing could have supplied the error in the lease and satisfied the statute of frauds and rules of evidence. Otherwise, the October incident was clearly a new contract. Mrs. Thomas says that what she wrote in October she wrote merely at Mr. Phillips’ dictation, and that it did not truly state any January contract, and her daughter testifies that what she wrote, on that occasion she wrote at Mr. Phillips’ dictation. In other words, her desire or friendship' or appreciation of Mr. Phillips was such that she desired to aid him and she was at that time apparently quite as willing to depend upon and trust him as she had been in the preceding January when she signed her ■lease without knowing it had an option of purchase in it after he had prepared it. If that statement on her part is true the October uniting did not supply any missing terms of the January lease.
    ■ “The argument is made by Judge Cole that this act on hex part in October was purely conditional, and it seems to me almost impossible to escape the conclusion that it was in spirit conditional; if it was not expressly so; it seems to me the spirit of the occasion imposed such-a condition, the condition being that what she was doing was to help Mr. Phillips, providing she could help him without embarrassing herself by reason of the agreement she had already executed for the sale of the property to another. No one can suppose for a moment that Mrs. Thomas would have deliberately tied herself up- in that manner had she realized the position she was placing herself in. If Mr. Phillips had known,, as it seems to me he must have known, the position the paper which he was having her sign was placing her in, his act would have been, to say the very least, ungallant; and it seems to me that it is impossible for the mind to rest upon that meeting of the parties in the home of Mr. Phillips and visualize what there transpired upon any theory or upon any conception other than that what Mrs. Thomas did, and all she did was because, and only because, she was induced to- believe by the very-nature of the whole occasion that she could help Mr. Phillips without injuring herself or in any way embarrassing herself. I cannot believe but that that condition pervaded the atmosphere of the entire occasion from beginning to end, and that any writing signed by her at that time must be accepted with such an implied condition, if it was not in it expressed, and for Mr. Phillips at this time to seek to enforcé that against her in such manner as will embarrass her with the persons to whom she has made a prior agreement of sale violates, to my mind, the conscientious spirit of that occasion to such an extent that it would be unjustified and inadequate to support an equitable decree.
    “But entirely aside from that, I think the evidence cannot be said to clearly disclose an original contract or option in the original lease made in January for the sale of that property for any fixed price.
    “Unless further reflection leads me to a conviction that I am in error in this, I shall advise a decree dismissing the bill. I will give the case further reflection, first, having my stenographer transcribe the views which I have expressed, and should I be led to another conviction I shall be entirely free to say so.”

      Messrs. Bourgeois .cfs Coulomb, for the appellant.

      Mr. Clarence L. Cole and Mr. William L. Charltoiv, for the respondents.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court, below by Vice-Chancellor Learning.

For affirmance—The Chibe-Justice, Swayze, Trenci-iard, Bergen, Minturn, Kalisci-i, Black, Katzenbach, White, Heppenheimer, Williams, Taylor, Gardner, Aokerson—14.

For reversal—None.


text:
    Gertrude C. Rhodes, respondent, v. Albert A. Rhodes, appellant.
    [Decided October 21st, 1920.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lane, who filed the following opinion:
    “At the conclusion of the case I orally expressed my conclusions on the facts. Upon reflection I see no reason to change them. I shall not reiterate them except in so far as may be necessary to indicate the reasons which have led me to the final determination.
    “The couple were married July 29th, 1915. Complainant was nineteen years old; the husband was thirty. He had two children—girls—now ten and eleven years old respectively. His prior wife had been divorced by him on the ground of adultery and is still living. At the time of the marriage his mother was living with him. The courtship1 of the parties was extremely short. His mother was adverse to the marriage. The wife was of a passionate, disposition, loved children and was desirous of having children of her own. The husband, although enjoying a good income, yet, in part, at least, for financial reasons, desired no children. Complainant was placéd in a most difficult position. Within a week after the marriage the mother-in-law left the house and for nine months thereafter the husband did not see his mother. The difficulties which arose between the mother and the wife I have found were due to the acts of the mother. Complainant performed her duties in a creditable manner and took extremely good care of defendant’s children by the prior marriage. On October 29th, 1915, complainant was induced by defendant, against her protest, to submit to an abortion, which was performed by an unskilled individual. In July, 1916, com¡plainant was again induced by her husband to submit to an abortion, which this time was performed by a physician. She was some eighteen hours in labor and almost lost her life. In the spring or summer of 1917 complainant again being pregnant her husband endeavored to induce her to submit to another abortion. I have found that defendant made the statement, which it is alleged he made to the father of complainant, upon being told by tire father that there would.be trouble if there was another' abortion, that maybe he could get her to get rid of it on her own account. The child of the marriage was born on November 22d. On December 3d complainant returned home and remained with defendant until April 29th, 1918, when she left him. On two prior occasions complainant had left the home, once on November 20th, 1915, as a result of a quarrel, in which defendant told petitioner if she was not satisfied sire could get. to hell out of there. She returned upon her husband begging her to return and promising her to treat her in a different manner. In February, 1917, upon the return to her home with her husband from her father’s house, he being intoxicated, or partly intoxicated, cursed and swore at her, ordered her out of bed, called her a God damn hypocrite, God damn bastard, God damn son of a bitch. He stated to her that he would have her where he wanted her in six months or know the reason why. Upon her remonstrance he continued his abusive language, and finally told her when she said she wouldn’t stay, to get out, and the quicker the better; she left and went to her father’s house. The husband went to her again and begged her forgiveness and promised to treat her as a husband should if she would return, which she did. The quarrel which led to the separation on April 29th, 1918, arose because of t-hei insistence on the part of the husband that he would spend every other Sunday at his mother’s, leaving his wife and children alone; words led to more words, until finally the husband made a remark which reflected upon the chastity of complainant, which enraged her to such an extent that she slapped his face, whereupon he accused her of being a lunatic and left the house with the avowed purpose of getting a physician. She telephoned her father, who came to the house. While the father and complainant were packing up, the husband returned and again left, aa he says, with the intention of getting a physician. The father and complainant left before he returned and complainant has been with her parents ever since. No bona fide effort has been made by the husband to induce the wife to return to him. There has been no physical violence on the part of the defendant aside from the illegal abortions. While the quarrels, as I find, have been the fault of the husband and indicate a lack of due consideration for complainant, under ordinary circumstance and standing alone, the conduct of the defendant would not be .sufficient to justify separate maintenance. This court cannot regulate in such minute details the conduct of husband and wife. But, in this case, the wife, a mere girl, has been induced by the husband, a mature man, to submit already to two illegal abortions, defined by our statute as high misdemeanors. The law is generous with respect to the position of the woman in such eases. It is almost universally recognized that, although the woman consent, yet she is not an accomplice. She is generally regarded as the 'victim rather than a perpetrator of the crime. 1 Bul. Ceos. L. tit.-’"Abortion” § Jf. In this case she was, in fact, the victim. She submitted to the abortions against her will'to retain the love of her'husband. He endeavored to get her to consent to a third abortion. His attitude has in nowise changed. He is not now.desirous of having children. If the wife resume matrimonial intercourse with him she must do'it with the knowledge that if she became pregnant her husband will desire her to submit to another abortion. It seems to me'to compel a woman to live with a man under such circumstances cannot but render her life: one of such extreme discomfort and wretchedness as to incapacitate her to discharge the duties of a wife within the language of Vice-Chancellor Learning in the case of Walsh v. Walsh, affirmed by the court of errors and appeals (88 N. J.'Bq. 868), and such an act would be extreme cruelty on the' part of the court. It is true that acts of cruelty may be condoned, but the 'condonation is but provisional. It'seems to me that the conduct of. the husband since the last, abortion, and his attitude at the'present time, is such that in this case the acts of abortion may be considered. At the close of the. trial, without reasonable justification, defendant charged complainant with being engaged to another man and with wearing his engagement ring. The husband’s mother circulated stories to the effect that the wife had been unchaste prior to the marriage. Petitioner now is engaged as a yeoman in the service of the United States. She receives a salary in excess of $100 a month. She has been receiving by the decree of this court $15 a week. It is earnestly urged that she' should be denied separate maintenance, or at least the determination of this ease should be withheld until after the war is over and she loses her position as yeoman in order that it may be ascertained whether the loss of her income may not change her mind as to here attitude towards her husband. In other words, whether she may not be forced back to her husband for monetary reasons. I agree with what Vice-Chancellor Learning said in the Walsh Case that it is the duty of the court to carefully limit the order to the demands of necessity as discerned by the condition and station in life of complainant and the ability of defendant to pay, and that the award of an amount calculated to render separation attractive to complainant is unwarmrted by a statute that favors cohabitation and contemplates only suitable support and maintenance during the period of separation. But I deny that the court should so act as to force a woman to return to a man from -sheer necessity for money.1 The award should not be such as to make the separation attractive nor should it be such as to make cohabitation a necessity. Where the facts warrant a separation, I think the will should be left, as near as may be, unrestrained by monetary considerations.
    • “I have concluded in this case-to grant a decree of separate maintenance and decree may be settled on two days’ notice and the amount of alimony then fixed.
    “There are numerous circumstances, some of which are not apparent from the printed record, which have led me to take the story of the wife rather than that of the husband.
    “The wife and her witnesses testified freely; they had made affidavits several months before upon the application for temporary alimony. They were not shaken on cross-examination, and there is no substantial divergence between the "stories they tell on the stand and the stories they tell in their affidavits. They impressed me favorably as witnesses. The husband, on the contrary, testified hesitatingly. His witnesses exhibited a spirit of venom toward complainant and a desire to do her as much injury as possible, irrespective of the truth.. In their affidavits they made much broader charges against the complainant than they testified to. The husband permitted such charges to be made against his wife as made by one witness that she had appeared dressed immodestly in a bathroom, on one occasion when the husband was present and on another occasion when the children were present, an allegation I have found to be without reasonable justification, and which is in line with the charge made by tire husband at the conclusion of the hearing that his wife was engaged to marry another man. The husband’s absolute impassive attitude throughout the trial, as well as demeanor upon the stand, impressed me most unfavorably.”

      Messrs. Lambert .& Stewart, for the respondent.

      Mr. Frank F. Bradner, for the appellant.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Lane.

For affirmance—The Ci-iiee-Justice, Swayze, Trenci-iard. Parker, Bergen, Minturn, Kalisci-i, Black, Katzenbach, White, Heppenheimer, Williams, Taylor, Gardner, Ackerson—15.

For reversal—None.


text:
    H. J. Jaeger, respondent, v. John M. Hannan, appellant.
    [Decided October 21st, 1920.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lewis, whose opinion is reported in 90 N. J. Eq. 396.

      Messrs. Weller..& Lichtenstein, for the respondent.

      Mr. J. Emil Walscheirl, for the appellant.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Lewis.

For affirmance—Swayze, Trenchard, Bergen, Katzenbaci-i, White, Williams, Taylor—7.

For reversal—The Chief-Justice, Minturn, Kalisci-t, Black, Heppenheimer—5.


text:
    Day-Elder Motors Corporation, appellant, v. Percy K. Hexter, respondent.
    [Decided October 21st, 1920.]
    On appeal from a decree of tlie court of chancery advised by Yice-Chancellor Fielder, who filed the following opinion:
    “A written contract :was entered into- between the Daj'-Elder Motors Corporation of the first part and defendant of tlie second part dated December 26th, 1916, and was immedia,tely assigned to complainant. For convenience I shall hereafter refer to this contract as, having been made by complainant as party of the first part. It recites that complainant was desirous of engaging defendant as its sales manager; that he was desirous of accepting that position and that the parties were desirous of fixing their respective rights and obligations. It then provides that complainant will employ and engage defendant as its sales manager for three years and will pay him for his services as such sales manager a commission of five per cent, on the list price of all motor track chassis sold during said period. Defendant thereby agreed to act as sales manager for said period and to devote all necessary time to the duties of said position and not to engage in any other motor track or automobile pleasure car business, or employment, during the life of the contract. In the event that defendant should sell one thousand four hundred chassis within the three-year’ period, the contract was to be renewed for a further period of five years, upon the same terms and conditions, and in the event that he should sell four thousand chassis, within the second period, the contract was, to he renewed for a further period of five years upon, the .same terms and conditions, except that defendant’s commission was to be four per cent, on the sales. Complainant agreed to deliver to defendant, as further payment for his services, five thousand shares of its stock of the par value of $10, upon the following conditions endorsed on the certificate; that the dividends should be paid ,to defendant so long as he should be employed by complainant; that if defendant should not be entitled to a renewal of his contract, or in the event of a breach of any of the terms thereof by defendant, the stock should revert to complainant; that should defendant perform all the terms and conditions of the contract to be performed by him and sell one thousand four hundred chassis within the first three-year period, a proportionate part of the stock should become his property, unconditionally, and if during the second period of five years defendant should sell four thousand chassis, a. further proportionate part, of the stock should be his; that if defendant should sell ten thousand chassis during the several periods, aggregating thirteen years, and should perform all the terms and conditions of the contract,, the balance of the stock should become his absolutely; that should defendant cease to be employed by complainant without any fault on his part, the stock which had not theretofore become his property should immediately become his unconditionally. The' contract further provides that all the expenses of sales organization of defendant of every kind and description, including salaries of salesmen, should be paid by defendant, except advertising.
    “At the date of the contract complainant had been in business nearly nine months, having its factory located in Newark. Defendant, then a resident of New York City, at once established his office as sales manager in the latter city and proceeded to effect a sales organization, consisting of salesmen, district managers and a, general office force. In September, 1918, defendant decided to enter the military service of this country, and on September 21st, 1918, he and complainant entered into a supplemental agreement that from October 1st, 1918, and so long as defendant should remain in the army, his commissions under the contract should be reduced to two per cent.; that the contracts between: defendant and his salesmen should be assumed by complainant; that all expenses of the sales organization should be paid by complainant; that defendant should be temporarily relieved from his duties as sales manager, and upon his ceasing to be in the army, the original contract should be again in effect.
    “After making this supplemental agreement complainant moved the sales department and defendant’s selling force from New York City to its factory in Newark, and when its new factory building at Irvington, New Jersey, was completed in December, 1918, the sales department was moved there, and has since been conducted from the latter place. Defendant was discharged from the army June 4th, 1919, and a few days afterward, at a conference with the officers of complainant, the subject of continuing the sales department at complainant’s factory was discussed and was disapproved by defendant, and on June 18th, 1919, he wrote complainant that he had found an office in the same building in New York City in which he had. conducted his business prior to entering the army, and that he was prepared to resume work under his contract. Correspondence and conferences then, followed between the parties, in which complainant insisted that defendant should conduct the sales department from its factory, and defendant insisted that his contract did not require him to do so and that he was prepared to locate his office in New York City, and on July 22d, 1919, complainant, solely because of defendant’s continued refusal to comply with its direction that the sales department should be located in Irvington, discharged defendant as its sales manager.
    “The bill alleges a breach of contract by defendant and it .seeks to compel defendant to deliver to complainant the certificate for five thousand shares of stock, complainant tendering itself willing to retransfer to defendant so many shares as the number of chassis sold prior to the termination of the contract, bears to ten thousand. Defendant denies that he has broken the contract, and by counter-claim alleges that he is entitled to the five thousand shares absolutely, and prays that the conditions and limitations- under which the same were issued to him, and which are endorsed on the certificate, be canceled and declared void.
    ‘“The question is whether under the- contract complainant had the right to determine the place from which defendant should conduct the work for which he was engaged or employed, and whether complainant bad the right to terminate the contract because of defendant’s refusal to conform with its judgment and instructions in that respect.
    “The contract expressly purports to fix the rights and obligations of the parties. It is silent as to the .locality from which defendant shall conduct the business for which he was engaged. It does not limit the territory in which he could operate, nor reserve to complainant the slightest right to control any of the actions of-the defendant or the manner in which he should perform his part of the contract, nor does it specify how defendant shall conduct Ms business of sales manager, except that he is to devote all necessary time to the duties of his position, engage in no rival business and bear the expenses of the sales organization. If it was contemplated that the sales department should be located where complainant might from time to time designate, this was a very essential detail which should have been included in the contract, but it would appear that all complainant required of defendant was that he should produce results, leaving him free to devote such of his time as might not be necessary in connection with his duties as sales manager, to any other line of business. This is not compatible with complainant’s claim that it could locate him in any place it chose and thereby possibly limit Ms freedom of action outside the contract. If complainant had the right to compel him to locate his sales office at Irvington, it had the right to designate any other place, no matter how far distant from his home or from the place which he considered best suited for his activities and without regard to the effect such location might have on his sales force or to the possibility that his organization might thereby be broken up. Defendant had a financial interest in the proper location of his office, for his commissions were dependent on his sales, and he was therefore entitled to choose the, place at which he thought he could meet with the greatest business success. The complainant could, if it so desired, by fixing his location and from time to time changing it, affect his¡ right to acquire the stock in question, by shifting him to places where it would- be impossible for him to sell the necessary number of cars to entitle him to the stock. The fact that at the outset of the contract, the parties gave it a particular construction as to location of the sales department, is .significant and throws light upon what their intention was at that time. United Box Board Oo. v. McBwan., 76 Ail. Rep. 550, S6J/.. If it was necessary to have it in or near the factory—if that was the natural location for it—that could have been determined when the contract was made, but defendant’s location of it in New York, and its maintenance there for nearty two j-'ears, was acquiesced in by complainant. While defendant was in the army and complainant was managing the sales department, it chose to move that department to Irvington, but when he returned he could take his organization where he wished. It was a valuable asset to him, which he was entitled to keep, intact, so that when his contract was at an end, he could use it in connection with a new contract with some other automobile company. To compel him to move it whenever and wherever-complainant might require might mean its disruption and loss.
    “Complainant contends that the contract should be construed to read that defendant ‘will act as sales manager for said party of the first part under its reasonable dvi'ection ’ but if that is so; the whole contract is changed, for, beside the right which it now claims to designate the location of the sales agency, such words would also give it the right to specify the territory in which he might work; the number of salesmen he should employ; the hours he should spend at the sales agency; when and how long; he should travel, and many other details which it is clear, from a reading of the contract, precludes the raising of such an implied condition.
    “The right to give reasonable orders and to discharge from service when such orders are not obeyed, exists in the ordinary and usual relation between master and servant, or where the master has expressly reserved the power to manage or direct ther business for which the servant is employed, or where such power must be implied from the nature of the employment, but where one contracts with another to do certain work, and the person so contracting is to do the work according to his own methods and ideas,-.hiring and discharging his assistants, and not being-subject to' the control of Ms employer, except as to results, the contractee is an independent contractor and not subject to-the ordinary rules governing the relations of master and servant. Under the contract in question the defendant appears to be an independent contractor and is governed solely by the contract. 35 L. B. A. 445; 17 L. B. A. (N. S.) 310; Meek. Ag. (3d ed.) §§ 40, 1870; 01. & Sky. L. Ag. 15, and cases therein cited; Lehigh Goal Go. v. Central Railroad Go., 39 N. J. Eq. 1353; Mann v. Max, 107 Atl. Bep. 417.

    “In support of its contention that the' right of complainant to give/reasonable directions’ to defendant must be implied in this contract, complainant cites the following New Jersey cases: Allen v. Aylesworth, 58 N. J. Eq: @4&; Walker v. JohnI Hancock Insurance Go., 80 N. J. Lam 31$; Leíais v. National Gash Register Co., 84 N. J. Lcm\ 598. But an examination of those cases shows that the contract of employment either expressly provided that the employe should follow or obey the master’s instructions and reserved the right to discharge without cause, or that the employer retained control over the actions of the employe, or that the ordinary relationship of master and servant existed.
    “Witnesses for complainant gave some testimony tending to show that early in 19.18 the defendant agreed to locate the sales department in the new factory, then building at Irvington. The defendant denies this, and I think the following facts corroborate his denial: He was seeking a commission in the army about June 1st, 1918, and at that time he stated to complainant’s officers that because his contract specified no location for his sales office, he had the right to conduct his work from New York, Washington • or France, provided he gave the necessary time to it and produced results. This led to notice of cancellation of the contract by complainant which was followed by a suit by defendant against complainant and their differences resulted in the supplemental contract of September 21st, 1918. Tf the location of the sales office had been discussed and was then an issue, as complainant claims, complainant would have insisted rupon settling that, question by lins'erfing appropriate words in the supplemental contract. There is also a letter in evidence written by complainant to defendant, dated June 20th, 1919, on the subject of moving the office to Irvington, but no mention is therein made of the 'alleged agreement on defendant’s part. However, whether or not defendant at any time after malting the original contract verbally agreed to locate the sales office at Irvington, such agreement is not set up by complainant as a new contract and it was without consideration and is not binding on defendant.
    “That defendant gave the necessary time to his duties is evidenced by the fact that one thousand four hundred trucks were sold during the first two years of the contract when that was the number he was to sell in three years. I find that the defendant performed Ids contract as made with complainant and that the complainant’s bill should be dismissed. The contract provides that in the event defendant should cease to be employed by complainant without any fault on his part, the stock in question should become his property unconditionally. The prayer of defendant’s counter-claim should be granted and complainant directed to cancel the conditions under which the stock was issued and as endorsed on the certificate.”

      Messrs. Pitney, Hardin & Slcinner, for the appellant.

      Messrs. Lum, Tamblyn & Golyer, for the respondent.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Fielder.

For ajfw-mance—The Ci-iiee-Justice, Swayize, Trenchard, Parker, Bergen, Minturn, Kalisch, Brack, Katzenbach, White, Heppenheimer, Williams, Taylor—13.

For reversal—None.


text:
    Clarence M. Busch, appellant, v. Mary A. Riddle Company, respondent.
    [Decided October 21st, 1920.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, who filed the following opinion:
    “I find no difficulties in this suit arising from the jurisdictional questions suggested by the defensive pleadings; to the effect - that the relief sought by complainant invades the rule that the courts of this state will not interfere with the internal affairs of a foreign corporation. Obviously, it is in no sense an interference with the internal affairs of the Mary A. Kiddle Company of Pennsylvania for this court to permit that corporation to maintain in this state a suit to recover from an officer of that corporation, who is a resident of this state, the value of assets of that corporation which the officer has appropriated to his own use in violation of his trust duties to the corporation." The additional circumstance that this suit has been instituted by a stockholder of the Pennsylvania corporation for the benefit of, and in the right of, that corporation in no way enters into the inherent nature of the suit. The suit is based upon a cause of action resting wholly in the corporation; the stockholder complainant does no more'than set in motion and contribute to the prosecution of a suit for the benefit of the corporation which otherwise could not be properly prosecuted. In that manner there is fostered the undoubted privilege of the corporation to sue in the state of the residence of the defendant from whom recovery is sought. The only element of management on the part of the managing officers which is interfered with is to be found in the circumstance that they do not authorize, institute or wholly control the suit. But where the recovery is sought in behalf of the corporation from its managing officers no such right exists on their part .as managing officers, since they are necessarily disqualified from acting in such circumstances. That disqualification is everywhere recognized and is operative to confer upon a stockholder the right to act in behalf of the corporation. See Sloan v. Clarkson, 1\05 Md. 171; Loan Society of Philadelphia v. Eamenson, ‘2Jfl Pa. St. 55; Oorry v. Ba/rre Granite Co. (FA), 101 Atl. Rep. SS; Atwater v. Bmkerville (Court of Chancery), S& N. J. Eq. 121,1S5; S. C. on appeal, 90' N. J. Eq. 275; Jackson v. Hooper, 73 N. J. Eq. 592, in m> way conflict with the views herein expressed. All this is, indeed, now conceded in the brief which has been filed by the counsel for the several defendants.
    “But the right of complainant to require in this suit an accounting -from an officer of the Mary A. Riddle Company of New Jersey for the value of assets of the New Jersey corporation which that officer may have misappropriated is by no means clear.
    “Complainant is not a stockholder of the New Jersey corporation. He is a transferee of the Kuehnle stock of the Pennsylvania corporation. It may be that if a sale and assignment had been made by the New Jersey company to the Pennsylvania com,pany, which by its terms could be said to include a transfer to the Pennsylvania company of assets of the New Jersey company of the nature of those now claimed—that is, money that then may have been due to the New Jersey company by reason of then unknown tortious conduct of an officer of the New Jersey company, such assets could be recovered by the Pennsylvania eompan3r in this suit from the tort-feasor by reason of the assignment. But whether, in such circumstances, an action could be so maintained, I think it unnecessary to here consider, since no assignment of the nature suggested has been deposited with me as an exhibit, and I have no recollection that any such assignment was offered in evidence. There is before me, however, the agreement between these tro corporations under date of August 1st, 1912, in. which the terms of the sale are specifically stated and agreed upon. That agreement recites that the vendor, the New Jersey corporation, is the- owner of the property and rights thereinafter described, that the vendee, the Pennsylvania corporation, has an authorized capital stock of $100,000; that the vendee has ascertained, adjudged and declared the said property and property rights of vendor to be of the fair value of $214,943.70, and that the acquisition thereof is necessary for the business of the vendee; the agreement then stipulates that the vendor has sold, assigned and transferred and set over, and does thereby sell, assign, transfer and set over to the vendee all its right, title and interest in the therein described property; then follows a specific description of certain tracts of real estate, each described as subject to specified encumbrances, and also certain shares of capital stock in a specified insurance company; the vendee then agrees in consideration of the sale to it of the property so described to issue to the vendor or its nominees, as thereinafter provided, its promissory note for $119,943.70, payable on demand, and certificates of capital stock of the vendee to the amount of nine hundred and fifty shares, as. fully paid stock; then follows the names of the several persons to whom the stock is to be issued, including two hundred and fifty shares to Mr. Ivuehnle. These two hundred and fifty shares are now held by complainant by assignment from Mr. Ivuehnle, and by virtue of that assignment this suit has been brought.
    “With that agreement accepted as the basis of the sale, it seems impossible to conclude that the Pennsylvania company either contracted for'or paid for any rights of the New Jersey company in the nature of obligations of any of the officers of the New Jersey company to it arising from their tortious conduct in its management. The agreement is entirely specific in its terms as to tire property to be sold and paid for. To enable the Pennsjdvania company to recover assets not contemplated by the agreement would be operative to bestow upon it assets neither purchased nor paid for. If, therefore, the Pennsylvania company has received tire assets which it purchased, and defendant, Eiddle, as an officer of the New Jersey company, is indebted for peculations from that company of the nature charged, it would follow that recovery from him cannot be had in this suit. The circumstance that the New Jersey company has been dissolved by proclamation of the governor for non-payment of taxes appears to present no insurmountable obstacle to recovery; that proclamation is in no way operative to discharge debtors of the proclaimed corporation. But it seems to me impossible to measure the consequences of the transfer of the enumerated assets by the broader assumption that it was intended to convey any undisclosed assets of the New Jersey corporation, since that intent is materially inconsistent with the terms of the agreement of sale; the consideration paid was capital stock of Pennsylvania corporation in amount equal to the stock of the New Jersey corporation, and, in addition thereto, a note of the vendee for a specific amount, which aggregate amount was by the very terms of the contract based upon an appraised value of the specific assets enumerated as purchased.
    “The method adopted in issuing the stock to the stockholders of the New Jersey corporation was apparent!}' irregular, although assented to by all the stockholders of the New Jersey corporation, since the consideration for the sale should have passed directly to the New Jersey corporation. Whether, in a suit for the specific purpose, a trust in favor of the New Jersey corporation could be impressed upon the stock so issued, I am not at liberty to here inquire. But complainant is, in fact, the holder of specific shares of capital stock of the Pennsylvania corporation, and is not, in fact, the holder of stock of the New Jersey corporation; as a stockholder of the Pennsylvania corporation complainant is entitled to initiate this litigation for recovery by the Pennsylvania corporation of the value of assets of that corporation misappropriated by its trust officers. If, as it is claimed, prior to the transfer of assets, Mr. Kiddle was guilty of (fraudulent misrepresentations to or concealments from Mr. ICuehnle resulting in pecuniary loss to the latter, his right of recovery for such loss appears to me to be a purety personal right and enforceable as such.
    “These views1 necessarily limit any recovery herein to the period of operations of the Penns3rlvania corporation.
    “A further objection is urged against the enforcement of an accounting by an officer of the New Jersey corporation based upon the long period of time that has expired since the transactions occtirred for which liability is claimed, and also based upon a settlement of the affairs of that corporation made at the time of the transfer of assets and apparently assented to by all stockholders of that corporation. These transactions during the operations of the New Jersey corporation for which liability is now asserted extend to, and even prior to, the year 1903. The great difficulty and uncertainty in any endeavor to ascertain the facts touching these transactions occasioned by the lapse of time is manifest by the testimony given at the hearing touching them. It may well be doubted whether in a suit of this nature it would be equitable to enforce an accounting during the period antedating the settlement of December 31st, 1911. But transactions since that date, and especially those since, the transfer of assets, have been more formally conducted with books of account purporting to accurately portray all financial transactions, and no insurmountable difficulties should be encountered in the procurement of adequate explanation of any matters which may be questioned.
    “The primary difficulties in this case arise from the fact that all of the stock of the New Jersey corporation, and after the transfer of assets, practically all of the stock of the Pennsylvania corporation was owned or controlled by defendant, Eiddle, and Louis Kuehnle, and through confidence reposed by Mr. Kuehnle in Mr. Eiddle, the latter was allowed to operate these corporations practically without restraint and with inappropriate regard to their existence as corporate entities, defendant, Biddle, during much of the time merely charging himself personally with moneys received and crediting himself with money paid; this was further complicated in the operations prior to the transfer to the Pennsylvania, corporation by numerous personal financial transactions between the two men by way of mutual accommodation. Until 1912 the New Jersey corporation was regarded by these two men ns their own, and defendant, Biddle, was entrusted with .the management with practically no participation or supervision by Mr. Kuehnle.
    “A written settlement of accounts was- made between Mr. Eiddle and Mr. Kuehnle up to January 1st, 1912; January 12th, 1912, a, written agreement was made between them touching the transfer of assets to the Pennsylvania corporation. The latter agreement contemplated the transfer to the Pennsylvania corporation of the assets therein specified for stock of the corporation in equal amount to the stock of the New Jersey corporation, of which stock Mr. Kuehnle was to have one-fourth, and also for a note of the Pennsylvania corporation, for a specified amount, with interest from January 1st, 1912; in the agreement Mr. Kuehnle transferred to defendant, Riddle, his one-fourth interest in that contemplated note in consideration of defendant, Riddle, assuming payment of certain obligations of the New Jersey corporation, for which the two were jointly liable; the .stated accounts between them of January 1st, 1912, were by the latter agreement also expressly confirmed.
    “It is obvious that these two stockholders, though owning practically all the stock, could not, consistently with the provisions of our statutes, divide between them the assets of the New Jersey corporation in that manner. The agreement may, however, be appropriately regarded as an attempt of the two stockholders to determine upon the ultimate results to be worked out. The plan defined in the agreement was accomplished as follows: A .special meeting of the stockholders of the New Jersey corporation was held August 1st, 1912. This meeting appears to have been regularly convened and all stock was represented. At that meeting a resolution was adopted authorizing the directors to enter into a contract with the Pennsylvania company to sell the latter company all the assets, subject to existing encumbrances, for $214,943.70, that amount to be paid by the delivery of a demand note of the Pennsylvania company for $119,943.70, and the balance of $95,000 to be paid by. the issue of that amount of fully paid capital stock of the Pennsylvania company; the resolution further provided that the note should be transferred and delivered to defendant, Riddle, as his individual property in consideration of his assumption of all unsecured debts, liabilities and obligations of the New Jersey corporation; and that the stock be issued and delivered to the persons and in amounts specifically named. The apportionment of stock so named is the same as the corresponding amount of 'stock then held by the same-persons in the New Jersey cor-, poration.

      “On the same date a directors’ meeting was held directing the execution of the agreement in accordance with the authorization of the stockholders’ meeting, and declaring the consideration to be paid for the property to be its fair value; also setting forth that the proposed contract presented to the meeting was approved as to form and ordered executed; also that the note for $119,943.70 be transferred and delivered to defendant, Eiddle, as his individual property in consideration of his execution and delivery to the company of a written assumption of all unsecured debts, liabilities and obligations of the New Jersey company ; also directing the stock to be issued and delivered in the manner set forth in the resolution of the stockholders’ meeting and in the submitted proposed contract. That contract, executed under date of August 1st, 1912, has been already referred to and summarized.
    “I am unable to discern any legal obstacle in the authorization by the New Jersey corporation for the delivery of the note to defendant, Eiddle, in consideration of the pajunent by him of debts of the New Jersey corporation to the amount of the note. The authorization by the New Jersey corporation for the delivery of the .stock to the several*stockholders of the New Jersey corporation encounters the legal obstacle that the stock, as a part of the consideration of the sale, should have passed to the New Jersey corporation as such and not to its several stockholders. But, as already suggested, the stock was issued by the Pennsylvania corporation, as vendee, in the manner directed by the New Jersey corporation, as vendor, and the several holders of that stock have been ever since recognized by the Pennsylvania corporation' as its stockholders; complainant is' assignee of the shares1 so issued to Kuehnle, and as .such is entitled to enforce restoration to the Pennsylvania corporation of the value of any assets that may have been wrongfully diverted by its trust officers.
    “The transfer of assets to the Pennsylvania company was consummated August 1st, 1912, and the books of account of that corporation were opened on that date. I shall, accordingly, give consideration in this case only to claims for liability upon the part of defendant, Eiddle, as an officer of the Pennsylvania corporation arising from transactions subsequent to August 1st, 1912. The item of the $22,500 note, hereinafter considered, had its origin prior to that date; but no substantial dispute touching that item exists except as to matters occurring subsequent to August 1st, 1912.
    “In the testimony taken before me at final hearing all parties were given the fullest opportunity to present all available evidence touching the several matters charged in the bill; the issues of fact were specific, and the testimony touching each issue was voluminous and apparently as exhaustive as either party desired. In such circumstances, and especially under a bill of this nature, I think a general reference to a master unnecessary and improper. I shall, accordingly, undertake to finally dispose of the various charges made, except as to one item hereinafter referred to.
    “1. In June, 1917, defendant, Biddle, was allowed a credit of $56,589.80 for expenditures made by him in the erection of the Knife and Fork inn. It is established that $20,000 of the money expended by Mr. Biddle for the purpose named was paid by him from the proceeds of a mortgage on the property and not from Mr. Biddle’s money. The accountant of Mr. Biddle now concedes the error and attributes the error to himself. The credit was further excessive, in that the account of expenditures, which was made the basis of the credit, included compound interest, calculated yearly, on the several items. Mr. Biddle must accordingly be charged with $20,000, and such interest a.s was charged on that amount, and also charged in addition with the amount that the compound interest exceeds simple interest on the actual expenditures from his money. Since a typewritten statement of the account exists, the exact aggregate charge now to be made against Mr. Biddle is a mere matter of calculation. If counsel cannot agree upon the calculation it may go to a master.
    “2. I am satisfied that the sale of the Pennsylvania avenue property, in March, 1916, was in fact for $7,500 and one yeaPs rental of the Albany a.venue house occupied by Mr Biddle. That year’s rental Mr. Biddle should be charged with, with interest. I think $1,500 the reasonable rental value to be charged' under the circumstances. I am convinced that the entries on the books of account do not adequately portray the actual pecuniary transaction.
    “3. The claim of unpaid rental for the Albany avenue house from December 31st, 1911, to August 1st, 1912, cannot be here considered under the view herein adopted touching the period for which complainant is privileged to recover in this suit.

      “4. The claim for recovery of overpaid salary and commissions is also prior to August 1st, 1912, and is not here considered for that reason.
    “5. I am convinced that Mr. Eiddle cannot be properly charged with penalties incurred through failure to pay taxes when due. In the absence of evidence of a sinister purpose any liability of that nature would be necessarily based upon errors of judgment. It seems impossible to conclude that the owner of three-fourths of the stock of a corporation would permit tax penalties to accumulate in the absence of what he believed to be reasonable necessities of the situation, and the ascertainment of gross error of judgment in that respect would necessarily involve an. almost'impossible consideration of practically all the interrelated affaire of the corporation.
    “6. The claim for $1,839.70 as error in cash in the statement from January 1st, 1912, to August 1st, 1912, falls within the field of claims herein excluded in this suit because arising prior to the sale of assets to the Pennsylvania corporation.
    “7. In January, 1914, defendant, Eiddle, purchased from the Pennsylvania company fifty $1,000 bonds of that company at par. In July, 1915, he sold to that company forty-three of the bonds so purchased at an increased price of $50 per bond, and in September, 1915, sold to the company the remaining seven bonds at the same price; the bond transaction, accordingly, afforded him a profit of $2,500. These same fifty bonds were sold by the company in December, 1915, for $900 a bond; the company thus sold them for $7,500 less than had been paid for them in the preceding July and September. It is defensively claimed that the company was in possession of ample funds in July, 1915, and could then advantageously purchase these bonds at‘their redemption price of five per cent, in excess of their principal; that a fire occurred in August, 1915, which not only occasioned heavy loss- to the company but necessitated funds for rebuilding purposes, and that these changed conditions made it necessary for the company to sell the bonds in the following December at the reduced price. But that explanation, however forceful it may be, in no way accounts for the sale to the company of seven of the bonds a month after the fire at the maximum rate referred to. Mr. Riddle suggested that the record on the books disclosing a sale of the seven bonds after the fire was a mistake in bookkeeping; but no demonstration of error was made.
    “It is entirely clear that the relations of defendant, Riddle, to the Pennsylvania company was such that the law of this state did not permit him to enjoy the fruits of a contract with the corporation he represented against the will of his cestui que trust exercised within a reasonable time. Stewart y. Lehigh Valley Railroad Co., 38 N. J. Law -&0&, 5K®, is conclusive to-that effect, and the doctrine there stated has since been uniformly recognized and repeatedly enforced in this state. The contractual profits enjoyed by Mr. Riddle through the purchase and subsequent sale of the bonds were $2,500. That amount must be returned by him to the company, with interest, unless it be found that the contracts have been intelligently ratified by a stockholders’ meeting or that the present assertion of the claim has not been made within a reasonable time. I am convinced that neither of these essentially equitable limitations upon the rights of rescission and restitution are to be found in this case. Inaction upon the part of the company and its stockholders was an inevitable resultant of Mr. Riddle’s practically unrestrained management of its affairs and the confidence reposed in him. If, indeed, the sale to the company was known by Mr. Kuehnle- his confidence disarmed anything like adequate comprehension of the detailed facts, and no- evidence discloses that Mr. ICuehnle at any time knew that the sale was made at a profit to Mr. Riddle. The profit to Mr. Riddle was $2,500, and that amount, and not $7,500, as-claimed, measures his liability in that transaction.

      “8. I am unable to conclude that there was any irregularity in the exchange of property with Senator Edge other 'than the rent item already referred-to.
    “9 and 10. The claims touching the O’Niel mortgage, the $5,000 paid to Tona Celia and the $4,000 incidental fund are for matters prior to August, 1912, and are also formally waived in complainant’s brief.
    “11. I am satisfied that no recovery can be supported based upon the claim of liability for uncollected rent from Celia.
    “12 and 13. The apparently duplicate charge of $10,000 for the Bacon mortgage, and the claim touching the payment of loan to Atlantic Safe Deposit and Trust Company, both antedate the period of present inquiry.
    “14. December 31st, 1913, defendant, Eiddle, was credited with having paid a note or notes of the Pennsylvania company, amounting to $22,500, as principal, and $1,942.50 as interest. It is claimed by complainant that the obligation of the company there referred to was represented by a certain note of $22,-500, which note had been theretofore fully paid and discharged b3r money of the company. If that be true the credit to Mr. Eiddle of December 31st, 1913, must be eliminated.
    “A great amount of testimony has been taken touching this $22,500 item, and the field of dispute has been reduced to- a very small compass. The testimony fully establishes, as facts beyond the field of dispute, that prior to September, 1911, the New Jersey company was indebted to the Eeal Estate and Trust Company of Philadelphia to the amount of $15,000, that amount then remaining due as the unpaid balance of a former loan secured by mortgage. On that date $22,500 additional money was borrowed from that trust Compaq on a note, making the total indebtedness $37,500. This situation existed at the end of 1911, when Mr. Eiddle and Mr. Nuehnle made their written settlement in contemplation of making the transfer of assets of the New Jersey corporation to the Pennsylvania corporation. That transfer was not consummated until August 1st. 1912, and at that transfer the transactions of the New Jersey corporation covering the intervening period were taken into account, and the books of account of the Pennsylvania corporation were evened on that date- and were made to carry as a liability the note above referred to of $22,500, payable to the Real Estate and Trust Company. That was clearly an error, since the note of $22,500 had been theretofore paid off and fully discharged. The note was paid off by a new loan being made by the Real Estate and Trust Company for $50,000, and out of that new loan the $22,500 note and the $15,000 mortgage balance were deducted and the remainder, $12,500, was paid to Mr. Riddle, and by him credited on the cash statement covering the period already referred to. All this was ultimately conceded at the hearing. The onty remaining inquiry is whether the payment to Mr. Rid- - die of $22,500, with interest, on December 31st, 1913, wa.s in payment of that old extinguished note or was in payment of some real obligation.
    “In view of the erroneous listing of this extinguished $22,500 note as an obligation, and the manifest indications that the payment to Mr. Riddle on December 31st, 1913, may have been of that extinguished obligation, the burden, is clearly imposed upon Mr. Riddle to- satisfactorily establish as a fact not only that the payment was not of the old note, but what it was for. This has not been done. But in view of the elapsed time, and the statements of Miss Palmer that the payment now in question was of two notes aggregating $22,500, and not of the old note referred to-, I think Mr. Riddle should be privileged to further endeavor to establish that fact if he can do so. I will, accordingly, order a reference to a master to- report whether such evidence as may be taken before him adequately established that the payment of December 31st, 1912, was not of the extinguished $22,500 note, and also- adequately establishes what the payment was in fact for, and that it was for a valid obligation of the Pennsylvania corporation. Upon that report coming in I will determine upon the allowance of this claim.
    “15.- The charge of improper allowance for discounts paid antedates the period of present investigation.”

      Mr. Frank Smaihers, for the appellant.

      Mr. Clarence L. Cole, for the respondent.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Learning.

For affirmance—The Chief-Justice, Swayze, Trenci-iard, Bergen, Minturn, Iyalisoh, .Black, Katzenbaoh, White, Heppenheimer, Williams, Taylor, Gardner, Ackerson—14.

For reversal.—None.


text:
    Henry Briggs, appellant, v. United Shoe Machinery Corporation, respondent.
    [Decided October 21st, 1920.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Buchanan, who filed the following opinion:
    “The bill in this case is filed by Henry Briggs, the inventor of certain patents assigned by him to defendant’s predecessor, pursuant to the terms of a. certain contract providing for the mamifacture and sale by defendant of the patented machines and the payment of royalties to complainant, alleging, inter alia, the failure of defendant to account for and pay royalties to complainant as required by the contract and praying for an accounting and a decree for payment of the amount found due upon such accounting.
    ' “The bill contains further allegations as to alleged fraud in connection with certain later patents, and a prayer for reformation of the written contract in case the meaning and effect of the terms thereof should be construed differently from complainant’s contentions in that behalf, but inasmuch as these were abandoned by complainant at the hearing, and no proofs adduced in sujoport thereof, it is unnecessary further to consider them.
    “The main controversy in the case rests upon the construction of the contract, and at the conclusion of complainant’s case-defendant renewed its motion to dismiss- the bill, and was granted-leave to reserve its evidence until the determination of the motion.
    “In this situation the evidence of complainant is, of course, to be taken as true—and from -it, and the allegations of the bill admitted by defendant’s answer, the following facts are obtained :
    “Complainant, Briggs, was, and bad been for many years, an inventor; particularly, if not solely, in the field of shoe- machinery, and from the year 1880 to the year 1901, when the contract before this court for construction was made, had been continuously in the employ of the Goodyear Shoe Machinery Company (the predecessor of the United company) and the United company. He had had twenty-one years’ experience with these companies; was forty-seven years old, and might naturally be expected to have many years of future valuable mental activity.
    “The sewing machine in use by the Goodyear company, up to the time of its absorption by the United compan}', was- the invention of Briggs—that is, his inventions had made it a practical machine. Shortly before the contract he had made inventions for further improvements on this machine, and a new' machine had been built by the Goodyear company, embodying said im-' provements.
    “On February 1st, 1901, he had two applications for patents pending in. the patent office for said improvements, one being an awl actuating mechanism and the other being an elastic tension device. Briggs had an oral agreement with the Goodyear company by which these patents were to be turned over to it, and when that company was merged with the United company about" the year 1900; the United company desired a written agreement with Briggs. This written agreement was prepared and drafted by Mr. Elmer P. I-Iowe, director and general counsel of tbe United company, who previously had been counsel for the Goodyear company. Briggs had no counsel.

      “A reading- of the agreement shows that the United company desired to obtain from Briggs two things, first, the letters patent to be issued upon the pending applications for the'two inventions previously mentioned, and second, to control all other and future inventions which Briggs had made and might make to this shoe sewing machine during the lifetime of Briggs.
    “The contract provides as matters to be done and performed by the company:
    “ T. To cause the two pending'applications to be prosecuted to allowance with diligence; and upon the allowance and assignment by Briggs to the United company of his entire interest in the inventions, to pay to him the sum of $10,000.
    11 ‘2, To proceed forthwith to build shoe sewing machines embodying the said inventions, or some of them, and to offer them for sale or on lease and to pay to Briggs the sum of thirty dollars ($30) as a royalty for each sewing machine leased, sold or otherwise disposed of by it’during the term of that one of the letters patent of the United States granted upon said pending applications which should be the last to expire.
    “ ‘3. To keep accurate books of account which shall show the sewing machines embodying the inventions * * • granted upon said ponding applications, sold, leased or otherwise disposed of by it during the term of said patents * * * and to make true reports to said Briggs in the months of January and July of each year * * * and to pay to said Briggs the royalty * * * ' due as aforesaid * * * during the next preceding six calendar months.’
    “Briggs on bis part agreed:
    “ T. Upon the payment to him of the sum of $10,000 to assign to the United company the two pending applications and the entire interest in the inventions therein described, and to request the commissioner of patents to issue letters of patent to the United company.
    “ ‘2. After the payment to him of the said sum of $10,000, to communicate promptly to the officers or counsel of the United company all inventions or improvements applicable to the sewing machine which he should thereafter invent or make, and to explain the same in such manner that the United company could reduce them to practice and embody them in its machines, and have applications prepared for the grant of letters patent therefor, and, without further consideration to be paid to him, to execute such applications, assignments and other written instruments to secure the grant of letters patent for the inventions or improvements described in the pending applications and for all other or future inventions applicable to the sewing machine which he had at that time invented, or should thereafter invent, upon the condition that the entire expense attendant upon all such applications, &e., should be borne by the United company.’
    “After the contract was executed, the patents were allowed in due course/and assigned by complainant to the company, and he received the $10,000. He continued for some six or seven years to make further inventions and turn them over to the company, a breakdown in health finally causing a termination of his employment. It is conceded that he fully performed his part of the contract.
    “'As to defendant’s performance—it paid to Briggs- the $10,-000, and then proceeded, in accordance with the terms of its contract, to build- sewing machines embodying his inventions, or some of them, and down to the year 1910 rendered accounts to Briggs everjr six months, and paid him roj’alties, the last payment being made in January, 1911. Since that date- the company has failed to render accounts to Brigg?, and has paid no royalties on the sewing machine.
    “The defendant has, between 1910 and 1918, made and disposed of many sewing machines of the same kind as the machine to which complainant’s awl actuating device and elastic tension device were added subsequent to the contract, but,' although there is a bare allegation in the bill to the effect that defendant has'between 1910 and 1918 made and disposed of many of these machines which did embody the two said inventions, and has not paid royalties thereon, there was no- proof submitted thereof, and in view of the sole contentions made in complainant’s argument, that claim, if, indeed, ever seriously advanced, has been abandoned.
    “It is a fact, however, that defendant has, during the period in question, made and disposed of many of these- sewing machines, which did not embody complainant’s awl actuating device nor his elastic tension device, but which did embody inventions made by him subsequent to the contract, namely, a locking device and a yielding needle device, which are entirely different and distinct from the specific inventions mentioned in that contract.

      “Complainant contends that under the provisions of the agreement, royalties were to be paid to him until October 15th, 1918 •—that being the expiration date of the term of the later of the two patents granted on the applications in question.
    “The sole grounds upon which he rests this contention are two:

      “First. That under the true inteipretation and meaning of the contract, defendant bound itself (under its agreement to proceed forthwith to build machines embodying ‘said inventions, or some of them’) to manufacture during the life of this contract as many machines with the. said inventions of Briggs in them as it could by due and ordinary diligence find a market for; and if it failed to do this, and chose to manufacture its machines without using any of the Briggs inventions, and supplied the market demand therewith, it is liable to Briggs for the royalty on each such machine, as if it contained the Briggs inventions.

      “Second. That if the first contention of the complainant is unsound and defendant could escape the payment of royalties at any time by ceasing to embody Briggs’ two specific inventions in the machines, yet, as the machines which it has manufactured from 1910 to 1918 have embodied some of the subsequent inventions of Briggs, that the wording of the agreement, which states that ‘the United company will forthwith build sewing machines embodying the inventions, or some of them,’ applies asx well to the subsequent inventions as to the two specifically mentioned.
    “Complainant, in support of these contentions, cites a number of well-known rales of construction and proceeds to apply them to the facts in the present case. ' It is, of course, true that the sole purpose of interpretation or construction of a contract is to ascertain the intention of the parties thereto. It is equally true that such intention is to be gained from the instrument itself, and where the contract is perfectly clear and unambiguous in its language and provisions no resort is necessary nor will be made to any of the rules of construction (unless some latent ambiguity be proved). Gf. Kelley v. Fwitoide Iron and Steel Go., 87 N. J. Law 567 (at p. 572).

      “Let us then examine the contract—and (considering complainant’s two contentions in inverse order), first, that portion thereof, section 2, having reference to the payment of the royalties. ‘The United company * * * agreed to pay to said Briggs * * * a royalty for each such sewing machine * * :|! disposed of by it during the term of * * * the letters patent,’ &e. The words ‘such sewing machine/ obviously, refer to the earlier part of the same paragraph—‘sewing machines embodying the said inventions, or some of them.’ The only prior use of the word ‘invention’ is in the preceding paragraph—‘the inventions in said applications’ (i. e., applications Nos. 706,478 and 17,368) ‘described and claimed.’

    “This would paraphrase the paragraph in question in this wise: ‘The company will pay to Briggs a royalty for each sewing machine embodying the inventions (or some of them) described and claimed in said applications Nos. 706,478 and 17,-368 for letters patent, disposed of by it during the term.’ &c. There is in this, obviously, no support for complainant’s claim that the royalties are to be paid upon such machines as embody subsequent inventions.
    “Complainant, however) argues that the words ‘said inventions’ should not be considered as limited in their reference to the contractual part of the instrument and to the word ‘invention,’ in paragraph 1 thereof, but may fairly refer back also to the recital portion of the instrument and the words ‘all improvements on said machine which the said Briggs shall hereof Her invent.’ This argument might be conceded if this proposition .stood by itself; but, looking at paragraph 2, we find that the first thing that is provided about the machine embodying ‘said inventions’ is that the company ‘will forthwith proceed to- build’ them—the word ‘forthwith’ clearly referring to the date of the contract. It needs no argument to show that the company could not proceed at once to build machines embodying improvements which had not yet been invented, and which, indeed, might never be invented. It is evident, therefore, that ‘said inventions’ refers, and can only refer, to the specific inventions mentioned in paragraph 1.

      “Nor is this all. In paragraph 3 the company agrees to keep books of account showing the number of machines disposed of by it, and the name of the vendees, and that Briggs shall have access to such books;' that it will make reports to him at certain time? of the machines sold, and make payment to him at certain times of the royalties. These provisions, it is perfectly obvious, are for the benefit of Briggs in obtaining payment of the proper royalties due him, and for no other purpose whatever. There is no other conceivable reason why Briggs should desire the company to keep1 these books, or make these reports, nor why the company should promise Briggs to do so, except that Briggs might keep track of all of the machines on which he was entitled to royalty. Now, the provision of this paragraph, as to the books of account, is that they shall show The number of sewing machines embodying the inventions, ox any of them, described and claimed in the letters patent * * * which shall be granted upon said pending applications’ which shall be disposed of by defendant during the term. And the reports are to be made as to 'such machines’ and the royalties paid on ’such machines’— the words ‘such machined in each ease clearly referring back to the machine's first mentioned (and the only machines mentioned) in that paragraph.
    “There is,, therefore, no possible room for doubt that the contract does not say, and does not mean, that royalties are to be paid to Briggs upon any other machines than those embodying the two specific inventions. The language and terms of the entire contract are not susceptible of any other meaning, however much we recognize Briggs’ status as a layman and lack of counsel learned in the law. It must be borne in mind that we are dealing with the question of the meaning of the agreement as it is written, and executed, not with a question as to whether that agreement correctly conforms to the prior oral agreement; complainant does not seek a reformation of the instrument nolis there any evidence tending in the slightest to show that the instrument should be reformed.
    “Turning, now, to the other argument advanced by complainant as ground for the relief sought, namely, that the effect of the provisions of the contract is to- o-b-ligate defendant to manufacture during the contract term as many machines embodying the specified inventions as it could sell with due diligence, and -that if it instead manufactured and sold machines without these inventions, it is, nevertheless, liable to complainant for the royalty on each machine.
    “There is, of course, no such express language in the contract —if there were complainant would not have had to bring suit. The language in two places in paragraph 2, and in three places in paragraph 3 (three of these five instances referring specifically to the payment of royalties, and the others referring to the' keeping of accounts and rendering reports of the machines on which royalties should be paid), provides that the royalty shall be paid on each sewing machine embodying the specified inventions 'sold, leased or otherwise disposed of by the company dwing the specified term. There is no express provision that defendant will sell any specified number of machines, or for any specified period, or that it will not sell any other machines than those embodying complainant’s inventions.
    “There is a provision (paragraph 2) that it ‘will .forthwith proceed to build sewing machines embodying the said inventions * * * and will offer them for sale or on lease’; and it may be fair reading of this paragraph to associate this with the clause a little further on—‘during the term of that one of the letters patent * * * which shall be the last to expire.’ Admittedly, defendant did proceed to build the machines forthwith and to offer them for sale or on lease, and there is no proof, nor any contention by complainant, that defendant did not so continue to offer them for sale during the entire term.
    “The requirement that the company shall forthwith proceed to build the machines and offer them for sale, undoubtedly, adds a material, obligation to the obligation to pay royalty on each machine sold, but that such additional obligation goes to the extent contended b}r complainant I cannot agree. To my mind the word ‘forthwith’ may well be the word of most importance in this clause. I mean by that that the clause may have been inserted in the paragraph to insure to Briggs that there should be no delay in the manufacture and .sale of the machines. If there were such delay his royalties would be delaved, and would also be lessened, because there would be fewer machines sold before the termination of the term of the patent or before the possible invention of some superseding- device. Certainly, even assuming- that -a provision is to be implied, to the effect that the company will build and sell with all due diligence, I can see no warrant for reading into the contract a requirement that it will continue to sell and sell no other machines, notwithstanding some superseding device be invented and developed.
    “Complainant, in support of this contention, relies strongly upon the opinion of the court of appeals of the District of Columbia in. Eclipse Bicycle Qo. v. Farrow, 1’6 App. D. G. Jf&Sj affirmed, it is said, by the supreme court of the United States in 199 TI. S. SSI. The contract involved in that case was in¡ many respects similar to the one now sub judice, and the company there had, subsequent to the execution of the contract and acquirement of the patent right, adopted other devices instead of Farrow’s device in the machines manufactured by it and refused Farrow further royalties. The District of Columbia court of appeals held that the company could not thus- relieve itself from the payment of royalties; but that the company having made the contract was bound by its terms, took the risk of new inventions superior to the one contracted for and must pay Farrow the royalty on each machine made, although not embodying' the FarroAV device.
    “There is, however, a very important distinction, between the contract in that case and the one in the case at bar. In the Farrow contract the assignee of the patents bound himself in express terms to ffi.se due business diligence in tire manufacture and sale of the devices embodied in said letters patent and to push the sale by all proper and legitimate enterprise.’
    “Moreover, the supreme court, so far from affirming the holding of the court of appeals, upheld it only in part. There were two devices adopted by the company in substitution for the Farrow device—one of them (the Morrow device) being, as the supreme court holds, a mere mechanical equivalent for the Farrow device; and the company, in its machines having the Morrow device, was therefore ‘embodying'the Farrow invention,’ and was therefore required by its contract to pay royalties to Farrow on such machines. The other device (referred to in the opinion as ‘E AT) it finds, and holds, to be an entirely different and distinct invention from that of Farrow, and reverses the decision below which required the payment of royalties to Farrow on machines with the ‘E W device. The following excerpt.from the supreme court opinion will serve to show that not only is that case not authority in support of complainant’s contention, but, on tire contrary, it is authority for the direct opposite thereof:
    “ ‘Obviously, also-, the fact that, subject to the foregoing qualifications, the defendant took the risk of the value of Farrow’s alleged- invention, even when coupled with its covenant to use due business diligence in pushing their sale, did not preclude it from- using any later invention, if one were made which superseded Farrow’s and did not embody it. Due business diligence would not require it to enter into a hopeless contest, and would not prevent it from avoiding such a contest by purchase. In that event it would not be accountable to Farrow for royalties on the new machine.’ Citing Thom Wire Hedge Oo. v. Washburn & M. Mfg. Co., 1m U. 8. 4£.S.

    “Upon the authority of these opinions of the federal supreme court, therefore (which, if not controlling, are entitled to great weight), the contention of complainant in this behalf falls—for he presented no evidence, nor does he contend that the machines sold by defendant on which royalties have not been paid, embodied his inventions of the awl actuating device or the elastic tension device-; indeed, on the contrary, he admits in his bill of complaint that the invention of the Ep-pler device, which was used in the machines (on which royalty was not paid) instead of Ms device, ‘largely, if not wholly, supersede the inventions’ covered by the patents issued to complainant on the two applications specifically mentioned in the contract.
    “Complainant also- lays great stress upon certain rules of interpretation, as before mentioned—commencing with the rule that the court in ascertaining the meaning of the instrument, will place itself in the situation and circumstances of the parties at the time of execution. "All the other rules relied on by complainant depend for their application upon the existence of a doubt or ambiguity. Unless such, doubt or ambiguity exists, they have no relevance whatever. And since I find no doubt or ambiguity, they need not receive further consideration.
    “There is, as I have already pointed out, no doubt or ambiguity in the express terms of the agreement. It clearly provides for the payment of royalties only upon machines disposed of bjr defeirdant during the term which embody complainant’s two specific inventions. It is absolutely devoid, either in express terms or by necessary or ‘reasonable inference, of any requirement to manufacture and sell machines embodying complainant’s inventions in any particular number or for any particular time, or after a superseding invention arose, or after it became for any reason a poor business proposition for the company to do so-—and, on the authority of the cases above referred to, the law implies no such provision in the contract.
    “Complainant, however, argues that the application of the rule as to the court’s putting itself into the position of the parties at the time of the execution creates or proves the existence of a doubt or ambiguity not apparent from the terms of the contract itself What the circumstances of the parties were has been substantially set forth earlier herein. It is unnecessary to repeat in detail the argument of complainant in this behalf ; summed up1 it amounts to contending that the contract is unfair and inequitable to him, and is not such as a reasonable man would make under the circumstances, and, therefore, a different meaning should be ascribed to it than is expressed by its terms.
    “Assuming, arguendo, the truth of complainant’s premises, I have already pointed' out that the- question of the fairness or reasonableness of a contract becomes relevant, on a question of determining the meaning of a contract, only where the contract is susceptible of more than one meaning of contrary nature or effect. But where it is not SO' susceptible, the court cannot change the sole meaning which it has. This contract is not susceptible of the meaning which complainant contends, even when regard is had to the surrounding circumstances. Complainant says, ^because of those surrounding circumstances, it is clear that the contract is unfair to me, therefore, although I signed it, its meaning should be changed so> as to make it fairer in its terms/ This is a very different thing from saying This contract, according, to the usual meaning of the words employed, would mean one thing, but I, being of a certain class of society, or of a certain calling or trade, meant by those words not their ordinary meaning, but the meaning which they have to persons in my situation and circumstances/ Complainant is asking a reformation of the contract under the guise of interpretation.
    “If the contract be unfair and inequitable 'to complainant, and defendant were the party seeking the aid of equity in its enforcement, that aid might be denied upon the ground of its unfair-' ness or inequitableness to complainant. But I know of no principle which would permit this court or any other to change a contract at tire instance of complainant in order to proceed to enforce the changed contract against defendant who had never made such a contract—no matter how inequitable or one-sided the contract might be.
    “Moreover, I am by no means willing to concede that tire agreement is in fact one-sided or unfair to complainant. Regard is to be had of all the circumstances and of both parties—not merely complainant. Complainant on/ his part gave what both parties believed to be a valuable invention, and gave up the possibility of further profit to himself from any further inventions to that particular machine. On the other hand, defendant gave and complainant received $10,000 in cash and royalties on the machines it should make and sell embodying this invention. Complainant might never invent anything else—he might have died the next day. Complainant took no greater risk of loss of profits to himself from this invention caused by the arising of a superseding invention, in this assignment and royally contract, than he would if he had gone into-the manufacture and sale of the devices himself—indeed, not as much, for, in the latter case, he would risk his capital investment, too. Complainant says the royally part of the consideration was the large, the important element thereof, far exceeding the $10,000 cash. But there is no proof of this. It does not appear whether the $30 royalty was a large or small one, nor how many machines had been made per annum in prior years, nor how many might be expected to be marketed in the future. It does not appear what comparison the $10,000 bore to his salary from defendant. Ten thousand dollars was a very substantial sum (much more so in 1901 than now), and if a superseding device had arisen within a short time after the contract, or 'if the device had proved a practical or commercial failure, defendant would have received nothing for its $10,-000 and for the loss of its capital invested in the manufacture of these machines, but the right to complainant’s future inventions on that machine—which might be none or worthless. Many, perhaps, most, contracts of this kind are simply assignments of the invention, upon a promise to pay royalties, not comprising any cash payment on the one hand or agreement to assign future improvements on the other. If the royalty here were a fair and reasonable one for such a contract (and there is no proof that it was not), then how can it be said that $10,000 was not a fair price for the future improvements complainant might make ?
    “The result of the views which I have set forth-renders unnecessary any consideration of some other grounds urged by defendant.
    “A decree will be advised dismissing the bill, with costs.”

      Mr. Edward L. Katzenbach, for the appellant.

      Messrs. McCarter & English, for the respondent.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Buchanan.

For affirmance—The Ci-iiee-Justice, Swayze, Trenoi-iard, Bergen, Minturn, Kalisch, Black, White, Herpentieimer, Ackerson—10.

For reversal—None.


text:
    David Straus Company, complainant, v. Commercial Delivery Company, defendant.
    [Decided November 15th, 1920.]
    Appeal of Morris Plan Company.
    On appeal from an order of the court of chancery.

      Messrs. Biker & Biker, Mr. B. Bcmdolpk Hicks and Mr. Harold H. Kissan, for the appellant.

      Messrs. Fwrsl '& Furst, for the respondent.
   Per Curiam.

This is a controversy between the receiver of the Commercial Delivery Company, on the one side, and the Morris Plan Company of New York and H. G. Famum and others, known in the cáse as the truck drivers, on the other side.

When the receiver assumed charge of the assets of the Commercial Delivery Company, after it had been adjudged insolvent, he found in its garage certain motor trucks. These he took possession of as the property of the insolvent corporation. Thereupon, the Morris Plan Company and the truck drivers filed a petition with the court praying that the receiver might be directed to surrender these trucks to them, the truck drivers alleging that thejr had purchased them from the Compiercial Delivery Company before insolvency, and the Morris Plan Company urging that all the right, title and interest in these trucks had been assigned to it for full consideration by the Commercial Delivery Company while it was still in a solvent condition. The receiver filed a cross-petition averring that the corporation which he represented had not made an unconditional sale of these trucks to. the truck drivers, hut had executed leases for them by the provisions of which the title to the trucks was to remain in the lessor until the several lessees had fully performed the conditions of the lease, including the payment of the sums fixed as the purchase price, and asserting that all of the conditions had not been complied with, and that the full, amount of the purchase price had not been paid. He also- denied in his petition that the Commercial Delivery Company had sold outright to the Morris Plan Company all its right, title and interest in the trucks.

J The hearing on these petitions was had before Vice-Chancellor Lane and he advised an order adjudging (1) that the truck drivers were not entitled to the present possession of the trucks, but reserving for further consideration the determination of their rights, if 'any,- in the proceeds of the sale thereof; (2) that the Morris Plan Company was not the owner of the legal title to these trucks, for the reason that the assignment to it was made as collateral security for the payment of a debt due from the Commercial Delivery Company to it; that this assignment was, ini legal effect, a chattel mortgage, and, as such, void against the receiver for lack of record, there being no change in possession; (3) that these trucks were “perishable and liable to deterioration in value, pending litigation as to the respective rights of the parties,” and that' they should be sold by the receiver. The Morris Plan Company anid the truck drivers appeal from the first and second of these adjudications.

We concur in the view of the vice-chancellor that, under the proofs submitted to him, the truck drivers are not entitled to the present possession of the trucks as against the receiver, who represents the creditors of the insolvent corporation. We a-lso agree with him in the view that the assignment upon which the Moms Plan Company bases its claim to the legal ownership and present right of possession of these trucks does not operate as an out-and-out sale thereof, but was intended by the parties thereto as a pledge of the right, title and interest of the Commercial Delivery Company for the purpose of securing its indebtedness to the Morris Plan Company; that it was, in its legal effect, a chattel mortgage, and, therefore, void as against the receiver and the creditors of the Commercial Delivery Company, because not recorded, as required by the provisions of the Chattel Mortgage act, there having been no change in, the possession of the property pledged.

The order appealed from will be affirmed.

For affirmance—The Chibe-Justice, Tbbnchard, Parker, Kalisci-i, Heppeni-ieimer, Williams, Taylor, Gardner—8.

For reversal—Swayze, Bergen, Black, White, Acker^ son—5.