text:
    Lucy Jacobus v. Alice A. Waits et al.
    [Decided May 25th, 1916.]
    1. Where mother seventy years old, in contemplation of death and while seriously ill and unable to fully comprehend the consequences, deeded to her daughter at the latter’s solicitation practically all her property without consideration and without independent advice, the deeds should be canceled for undue influence.
    2. While a conveyance from parent to child is not presumptively invalid for undue influence merely because of the relation of the parties, yet, where facts are shown establishing a confidential relation in which the child is the dominant party, a conveyance from the parent to the child is presumed to be tainted with undue influence, and the burden is upon the child to show otherwise.
    Heard on bill, answer, replication and proofs.

      Messrs. King S Vogt, for the complainant.

      Mr. Joseph A. Connolly and Mr. Michael J. Tansey, for the defendants.
   Foster, V. C.

This action is brought to set aside two deeds of conveyance made by the. complainant to her, daughter, the defendant Alice A. Waits, under the following circumstances:

The complainant, seventy years of age, is the widow of John W. Jacobus, who died about 1900, and is the mother of five children, including her married daughter, the defendant Mrs. Waits. She lived alone in a small house which she owned at Rockaway, New Jersey, which was worth about $1,500, and, in addition to this property, she owned, at the time the deeds in question were executed, certain mineral rights in property situate near her home, of very little value, and producing no income; and she had on deposit in bank about $200. She also owned property in Newark, which she subsequently sold, the equity of which was worth about $500. This was her entire estate and she lived on the rent she received from rooms which she leased in her house.

Complainant was frequently ill from attacks of indigestion and liver, trouble, and in June, 1913, being seriously ill, she sent for her daughter, who lived at Belleville, near Newark, as she thought she was going to die. On the day following the daughter’s arrival, Mr. Bolitho, an attorney practicing at Rock-away, who had done some work for complainant, was called to complainant’s home and was given instructions by complainant and her daughter to draw a deed conveying from Mrs. Jacobus to Mrs. Waits the house and lot at Rockaway, the consideration stated in the deed being “one dollar and other valuable considerations;” no consideration was in fact paid. Mr. Bolitho, having prepared the deed, returned to complainant’s home and informed her of the contents of the paper; she then executed and acknowledged it before him, the daughter being present at its execution. The deed bears date June 20th, 1913.

On the following day1, June 21st, Mr. Bolitho prepared and complainant executed before him another deed, conveying to her daughter, for the same consideration, all the mineral rights above mentioned. These deeds were recorded on June 23d, 1913, at the request of the daughter who paid for having them drawn and recorded.

Complainant, whose memory is very poor, claims her daughter, without her request, notified the attorney to call at complainant’s home to prepare the deeds; that the daughter, as she testifies, “harassed me to death to get hold of that place ever since I had it;” that her daughter said on the day the first deed was signed, “that she wasn’t going to have them drunken brothers of hers have anything, she was going to have it herself.” Complainant was very sick in bed at the time and says she did. not know that her daughter.had gone to Mr. Bolitho’s office until she told her he was coming that afternoon. Complainant told her daughter she did not know what she was going to do, and defendant said:

“ ‘Well, you don’t know nothing yourself; I have to fix this thing for myself, and I don’t mean my drunken brothers to have anything;’ that she was the only decent young one I had, and all such talk.”

Nothing was said that she can recall making any provision for her support. Complainant adds: “I signed it (the deed), but I did not understand it — I did not understand it that she made any provision for me whatever.” She did not think of the matter until three or four days after the deeds were signed, and has worried ever since, and that she had put up with what her daughter said because she was sick. On her recovery she continued to exercise ownership over the properties; she rented out some rooms and tried to sell the mineral rights. Some weeks after the deeds were executed, complainant consulted Mr. Bolitho about regaining title to the properties.

Mrs. Waits’ version of the matter is that her mother being very ill sent for her, and the morning after her arrival complainant directed her to get the lawyer, whom she did not know, and that her mother gave her the directions to find his office, and that when the attorney arrived, complainant gave him tire old deeds and the instructions about preparing the new ones; that before going to the lawyer’s office defendant said to the complainant-:

“Now, Ma, you have been promising and telling me so long that you did not intend for the boys to taka away from me what you had willed to me; you have always told me the Roekaway house would be mine; now, if you intend to deed it to me, why don’t) you do it before you die in one of these sick spells,”

and complainant told her to unlock the trunk and get out the deeds for the Rockaway house, to have the lawyer fix the deed and'she would sign it. Defendant adds, that when Mr. Bolitho called he asked the complainant if she had made any provision about her mineral rights, and, when she said she had not, he asked, "If something should happen to you (she had said she thought she was going to die), who would you want to have it ?” and complainant replied, "My daughter; I don’t want my drunken boys to have a dollar that I ever saved;” and the lawyer then asked her why she did not deed the mineral rights to her "daughter, since she was deeding the other property to her, and she said she would, and sent Mrs. Waits, the next morning, to the attorney to have him prepare -the deed for the mineral rights and bring it to her by two o’clock so she could sign it before Mrs. Waits left for her home on the three o’clock train; that the deeds were both signed and complainant was up and fully dressed and knew what she was doing, because they talked it over, and she said to complainant, "Ma, for what you have given me, I will always look after you and do what is right for you.” After complainant signed the deeds she told the lawyer she would like to dispose of the mineral rights as she expected the money she would receive from the sale to care for her if she lived, and, if she did not, the property was to go to Mrs. Waits.

Mr. Bolitho’s version of what happened is that he found a note at his office requesting him to call at the home of Mrs. Jacobus; he did so, and found her very sick in bed. Mrs. Waits let him in and told him her mother wanted to malee a deed of the property to her, and she did most of the talking. He prepared the deed and read it to complainant, and, after its execution, gave it to Mrs. Jacobus, who handed it to her daughter. The following day Mrs. Waits called at his office and requested him to prepare a deed conveying the mineral rights to her, which he did, and complainant signed it. Complainant was very feeble and the purport of the conversation between her and her daughter was that she was going to die and that Mrs. Waits was going to look after her and take care of her while sick and see that she was properly buried, and he understood that was the reason for the transfer of the property. Mrs. Waits paid him for his services, and he thought the expression “good and valuable considerations” in the deed would cover the arrangement between them, whatever it was. He understood Mrs. Waits was to care for her mother while sick, but was not to provide for her burial, as he does not think he knew of this feature when preparing the deeds. When he told complainant, on the execution of the second deed, that she was practically transferring all her property to her daughter, complainant said, “It don’t make any difference, I don’t expect to live over a day or so at the most.” And his “idea of the transaction was that the complainant intended only that the deeds should take effect in case of her immediate death;” that was his understanding on the delivery of the deeds. He did not think it necessary to put their agreement in the .deeds, as he never expected to see complainant alive again; he “thought the old lady was going to die, and what was to be done had to be done quickly.” And although he knew that she was transferring all her property to her daughter, and asked her if that was her intention, to which she replied, “I won’t want it any more; and I won’t get out of here,” or words to that effect, and although he knew when he recorded the deed the title would be vested in Mrs. Waits, he gave the complainant no advice about the matter.

Some time in the following November complainant desired to sell the mineral rights and told Mrs. Waits to sell them for her; and about December 22d she called on her daughter about the matter and asked the price these rights were to be sold for, and then the following conversation took place between them. Complainant asked her daughter, “What will you do if you sell it; are you going to keep the money or are you going to give it to me?” to which Mrs. Waits replied:

“Well, I think I can make a much better sale of the property than you could, therefore I think the money should be put in the bank, in your name and mine, you to have your living from it as long as you live, and when you are gone it is to come to me,”

and complainant said, “Very well.” Mrs. Waits adds, that nothing was said in the conversation about the cottage; the house was to be hers when complainant was through with it; “I was never to touch it while she lived.” This statement was made at the time of the execution of the deeds, complainant was either to live in the house or rent it as long as she lived. Since the deeds were signed, Mrs. Waits states she has done all complainant’s sewing and provided her with about all the clothing she has had.

Some time previous to the execution of the deeds, complainant testifies defendant said to her, “I am going to have you malee a will,” and she took complainant to a lawyer’s office in the Prudential building, in Fewark, and left her in one room while she talked with the lawyer in another. A will was prepared and executed, giving the daughter all complainant’s property except $5, which she gave to each of her sons, because Mrs. Waits told her she must leave the boys something. The will was left with the lawyer, and, later, complainant obtained possession of it and burned it.

The agreement to care for complainant and to bury her, which defendant says she made, was not made until after the deeds were executed and delivered and was without consideration; and it has in no way been substantially performed; aside from some sewing and some articles of clothing, defendant has done nothing for her mother in carrying out this agreement and she has allowed the taxes on the property to remain unpaid.

I think it is clear that these deeds of conveyance were mere voluntary gifts, made without consideration, and, in contemplation of the grantor’s impending death, and are within the rule stated in Slack v. Rees, 66 N. J. Eq. 447; Post v. Hagen, 71 N. J. Eq. 235, and approved in Soper v. Cisco, 85 N. J. Eq. 165, “that undue influence is not to be presumed from the mere relation of parent and child, in ease of a conveyance from a parent to a child, and that this does not conflict with the broad rule that, where parties stand in confidential relation to each other, a conveyance from the‘weaker to the dominant party is presumed to result from undue influence, and, therefore, where facts are shown, other than the mere relation of parent and child, establishing between the parties a confidential relation in which the child is the dominant party, a conveyance from the parent to the child is presumed to be tainted with undue influence, and the burden is upon the child to show the bona fides of the transaction.” Soper v. Sisco, supra.

The facts established justify the application of this rule in the present case and casts upon the defendant Mrs. Waits the burden of showing that these conveyances were not the product of undue influence exercised by her on the complainant.

And where, as in this case, it is apparent that tlie gift was made to accomplish the purpose of a will,' without the safeguards surrounding the execution of a will, an additional reason is presented why the donee should clearly and convincingly show its validity, Haydock v. Haydock, 34. N. J. Eq. 570.

I do not think defendant has borne this burden, because her own evidence, and that of the scrivener, discloses that it was in part, if not entirely, due to her solicitations that these conveyances were made, and that they were voluntary gifts made in contemplation of the donor’s death, without consideration, and to take effect after the death of the donor. Furthermore, the facts show that complainant, in making these conveyances, dis: posed of practically all her property, without the benefit of proper independent advice. Because of the absence of such advice, and the voluntary nature of the gifts, by which improvident action complainant parted with her entire means of support, and the fact that by reason of her serious illness she was not in condition to fully comprehend, and did not comprehend, the consequences to herself of her act in making these gifts, these conveyances should be set aside.

This conclusion is only giving effect to what the defendant says was the understanding with complainant when the deeds were executed, that the deeds were to become effective only in the event of the death of her mother from illness with which she was prostrated when the deeds were made.

Decree will be advised that the deeds should be set aside and surrendered to complainant, and that the defendants reconvey to her the cottage property and mineral rights.


source: Caselaw Access Project

author: Foster, V. C.

license: Public Domain

text:
    Isidor Engel v. Central Building and Construction Company et al.
    [Submitted February 14th, 1916.
    Decided February 17th, 1916.]
    1. Under 8 Clomp. Stat. 1910 p. 8294 § 8, providing that whenever a contractor shall upon demand refuse to pay any subcontractor, the subcontractor shall give notice in writing to the owner of such refusal and of the amount due him, although no particular form of notice need be served, a notice served by the subcontractor on the owner referring to an unexecuted contract between the subcontractor and contractor stating that the work was completed according to the contract, that contractor had money due to the subcontractor, and notifying the owner to retain any money due to contractor, did not comply with the requirements of the statute in that it did not contain an allegation that the contractor refused to pay.
    2. Under 3 Clomp. Stat. 1910 p. 3294 § 3, notice by a subcontractor to the owner, defective for want of an allegation that the contractor had refused to pay the amount claimed, was not cured by a stop-notice calling the owner’s attention to the defective notice and stating that the contractor was showing a disposition to prolong settlement, and that the subcontractor was ready to bring suit and notifying the owner to withhold money due the contractor, since it warrants the conclusion that the contractor had not in fact refused to pay the claim.
    On bill of interpleader. Heard on bill, answers, replication and proofs.

      Messrs. Howe & Da/uis, for the complainant.

      Mr. Franldim, W. Fort, representing Mr. Peter A. Gavicchia, solicitor, for the Newark Mason Contractors Company.

      Mr. Isaac Fleischmcm,, for the defendant A. A. Tallard.

      Mr. Peter Bentley, for the defendant Lewis Max.

      Mr. James D. Carpenter, Jr., representing Messrs. McDermott & Enright, solictors, for the defendant Kawneer Manufacturing Company.

      Mr. James R. Stewart, Jr., for the defendants Abraham Ratner and Julius Jader, partners, &c.

      Mr. Jacob Lubetlcm, for the defendant Meyer Gendel.

      Mr. I. Bernard Dvin, for the defendant Joseph Cheskin.
   Foster, V. C.

This is a bill of interpleader, and, after the entry of a decree of interpleader, this cause came on for hearing to determine the priority of the lien claims. I have disposed of all the lien claims except the claim of Newark Mason Contractors Company, the validity of whose notice is attacked.

As to the claim of the Newark Mason Contractors Company, I find that the notice or notices served on the owner do not comply with the requirements of the statute.

The statutory requirements are, that whenever the contractor shall, upon demand, refuse to pay any subcontractor the money due to him, it shall be the duty of the subcontractor to give notice in writing to the owner of such refusal and of the amount due to him and so demanded. If notice to this effect is given, the owner is then authorized to pay the claim, on being satisfied of its correctness) and will be allowed for the amount so paid in his settlement with the contractor. Comp. Slat. p. 3294 §8. No particular form of notice need be served, provided the form used gives in effect the written notice prescribed by statute. Fehling v. Goings, 78 N. J. Eq. 375.

By an unexecuted draft of a contract dated March 31st, 1914, made between the Central Building and Construction Company and this claimant, the latter agreed to do certain mason and other work under the direction of the owner’s architect on the premises in question by June 1st following for $3,400, to be paid: eighty per cent, (presumably of the architect’s estimate) on the first day of every month, and the balance was to be paid when the work was completed and accepted by the owner.

On August 7 th, 1914, claimant served on the owner a no tide, in which reference is made to this unexecuted contract, and then the notice proceeds to state:

(1) That the work has been completed in conformity with this subcontract;

(2) That “the said Central Building and Construction Company leaving the sum of eleven hundred and ninety-nine dollars still due to us, which includes the extra work,” and

(3) You are, therefore, notified to retain in your hands any money that is due by you to said Central Building and Construction Company and apply it as aforesaid'to the satisfaction of our claim as aforesaid.

This notice was signed in the name of the claimant by its manager.

It will be observed that this notice did not give the owner notice of the principal matter mentioned in the statute, i. e., the contractor’s refusal to pay the amount claimed.

Having in mind that this section of the statute should .be liberally construed in favor of a lien claimant (Manufacturing Company v. Building Company, 71 N. J. Eq. 133; affirmed in 72 N. J. Eq. 929), I am unable to place any construction upon this notice that tire contractor had refused to pay claimant the amount demanded. Our courts have gone so far as to waive the recital of a demand for payment in the notice, if a statement is used in the notice' showing payment to have been refused, as the term “refusal” naturally imports a previous demand or request for payment. Beckhard v. Rudolph, 68 N. J. Eq. 740.

But I Imow of no case in which it has been held that the stop-notice served is good and is authority for the owner to pay the claimant, if the notice contains no statement by which the owner is made aware, either expressly or by necessary implication, that the contractor has refused to pay the claimant. There is nothing in this notice to inform the owner why he should pay the claimant instead of the contractor; - there is nothing to show that the contractor is unwilling or unable to pay the amount demanded, and the owner is left to surmise or to speculate why payment is demanded of him.

Should he make payment under a notice of this effect, I seriously doubt if it,w.ould be allowed him in his settlement with the general contractor.

The infirmities in this notice, which I have mentioned, were pointed out by me in the course of the hearing, and their significance was recognized by counsel for the claimant, who attempted to cure them by the introduction of a so-called second stop-notice, which was served on the owner on August 28th, 1914.

In this notice, which is signed by a lawyer, Peter A. Cavicchia, complainant’s attention is first called to the above-mentioned notice served on him by this claimant on August 7th, and it then states:

“Since Mr. Goldberg is showing a disposition to prolong the settlement of this claim, I am ready to bring suit for the amount and I hereby notify you to withhold the amount of §1,199 out of any moneys that become due to the Central Building and Construction Company until such time as the court shall decide the question.”

'There is nothing in this letter, or in the reference it makes to the former notice, to indicate that the contractor had refused to pay the claim. On the contrary, the complaint is that the contractor, through Mr. Goldberg, its president, is merely showing a disposition to prolong the settlement of the claim, and this statement leads to the inference that the contractor who was engaged in prolonging a settlement of the claim on August 28th, certainly had not refused to pay this claim three weeks earlier, when the first notice was served, and it warrants the conclusion that the contractor had not in fact refused to pay the claim; and that the first.notice was silent on this point because it could not truthfully charge the contractor with such refusal. This conclusion is supported by the proof which shows that on August 6th the representative of the claimant became angry at the contractor when he offered to pay him $100 instead of several hundred dollars, which the claimant was expecting to have paid him, and that thereupon the notice of August 7th was served.

Mr. DeBiare, the manager of claimant, testified that prior to the service of the notice of August 7th he had not made a demand on the contractor for the payment of the sum of $1,199; that after he sent this notice io Mr. Engel, he spoke to Mr. Goldberg about it; that when Mr. Goldberg offered him a check for $100 on August 6th he refused it, because he expected six or seven hundred dollars.

hTo demand for payment having been made until after the notice was served, there certainly could not be a refusal on the part of the contractor to pay the claim prior to the service of the notice, and I find that the notices of this claimant and proofs thereon do not comply with the statutory requirements, and that this claimant is not entitled to participate in the distribution of this fund.


author: Backes, Vice-Ordinary.

text:
    In the matter of the estate of Josiah Morris, deceased.
    [Submitted March 10th, 1916.
    Decided March 27th, 1916.]
    1. Where the appellants, during six years prior to attacking an account of the executor, were cognizant of the cause assigned for opening it, they were guilty of laches in failing sooner to attack it.
    2. A.n insane beneficiary under a will cannot, by her guardian, have the account of the executor opened and resettled on the ground of fraud or mistake by relying upon its voidability as to her, she having failed to establish the grounds alleged, since a proceeding to open an account admits the conclusiveness of the decree, but corrects only errors therein, and such beneficiary must assert voidability of the decree as to her in a distinct proceeding for that purpose.

      On appeal to Salem county orphans court.

      Mr. Charles Me cum, and Mr. Joseph R. Wilson, for the ap-. pellant.

      Mr. Thomas G. Hilliard, for the appellee.
   Backes, Vice-Ordinary.

This appeal brings up' for review an order of the Salem county orphans court refusing to open and resettle the supplemental account of David Wiley,, executor of the above estate. The account was duly allowed April 20th, 1909, and the appellants moved to open it nearly six years afterwards, on the single ground that the executor had not charged himself with interest on funds in his hands. The proofs do not sustain the charge, and the court below, in its memorandum, demonstrated and found as a fact that the executor had accounted for all interest which was properly chargeable to him. In this I concur.

The delay of six years before making this attack, during all of which time the appellants were cognizant of the cause they now assign for disturbing the account, and in which time, upon two occasions, they submitted it for investigation to counsel of the highest standing, evinces gross laches or a lack of confidence in their complaint.

The appellants are two daughters of the testator, and bene-, ficiaries under his will — one of whom is insane and appeared by guardian, another beneficiary, appointed in 1912 by a court in Pennsylvania. Her disability is not set up in the pleadings, but it is in the testimony that she was insane when the account was allowed, and, on the argument, it was contended that as to her the decree is voidable or an absolute nullity, and therefore it should be opened. This contention altogether ignores the nature and aim of the present proceeding, and is inadmissible, because, on an application to open and resettle an account, the •conclusive character of the decree allowing it is necessarily admitted, and, upon proof of fraud or mistake, it is not opened generally, but only for the purpose of correction in particulars pointed out and established. Here the guardian of the incompetent sought to further charge the executor with specific items of money, as set forth in the petition, and the only issue before the court below was whether the allegations were well founded. Tailing in his proofs in this respect, he was not entitled to have the court set aside the decree in toto, because of his ward’s disability at the time it was entered. If he desires to set up that the decree allowing the account is not binding upon the incompetent, the remedy must be found in some other form of action, in which the question may be directly raised and litigated.

I have been requested by the appellants, and it is consented to by the respondent, to modify the order appealed from by striking out all reference therein to the alleged lunacy of the incompetent. This I decline to do. The language employed in the order states correctly the futility of the plea of disability in these proceedings, in harmony with the view above expressed, and can have no extraneous effect to bar or embarrass the incompetent in the pursuit of any other remedy.

The order below will be affirmed, with costs, and the record remitted.


author: Walker, Chancellor.

text:
    Mary J. Robinson, complainant-respondent, v. Samuel D. Robinson, defendant-appellant.
    [Decided October 10th, 1914.]
    ' 1. Every installment of permanent alimony paid by -a husband to his wife under a final decree therefor in the court of chancery, would be in execution of the decree pro tanto, the result being that any such paymenta pending appeal, wouid be an impairment of the subject of the appeal to that extent Or degree, and also an invasion of the appellant’s right to have his property preserved and not diminished during the contest in this court; and to protection from this he is entitled. The course which, as thus indicated, is required for the preservation of the fights of the appellant, is even more fundamentally required in order, that ■ the 'juris-1 diction of the appellate court may not be destroyed or impaired.

      2. This court has the power to award alimony pending an appeal — that is, alimony pendente lite. That jurisdiction is firmly established. But, an application to enforce a final decree for permanent alimony, pending an appeal, is not an application for alimony pendente Ute, which may be awarded here, or the parties remitted to the court of chancery to make application there.
    On motion for an order permitting the court of chancery to enforce its decree pending appeal.

      Mr. Eli II. Chandler, for the motion.

      Mr. Ulysses (?. Styron, conlra.

    The opinion of the court was delivered by
   Walker, Chancellor.

This is a suit for maintenance. The defence was that the parties are not husband and wife. That issue was decided adversely to the defendant in the court below, and has been brought to this court for review. The final decree establishes the marital status of the parties and directs the defendant to pay to the complainant, as his wife, $5 per week for her support and maintenance. The defendant appealed from the decree in chancery and refuses to make the weekly payments as ordered. Application was made to the court of chancery by the complainant for an order to commit the ■ defendant for contempt for his refusal to obey the decree. On the return of an order to show cause in that court it was established that the defendant was able to make the payments ordered, but that he resisted doing so upon the ground that his appeal operated to stay the execution of the decree. The court of chancery declined to adjudge the defendant in contempt in the absence of an order of this court permitting that court to enforce its decree pending appeal.

Counsel for defendant-appellant, the applicant here, relies upon Ashby v. Yetter, 78 N. J. Eq. 173, and contends that upon the authority of that case the "court of chancery has the power to enforce its decree, especially so by leave of this court, pending the determination of the appeal. We think that counsel has misconceived the scope of the decision in Ashby v. Yetter. One of the rules concerning proceedings in the court of chancery pending an appeal to this court, is thus stated by the vice-chancellor in that case at p. 188 (which is incorporated in the first syllabus at p. 173):

“Pending an appeal from an order or decree of the court of chancery, application may be made either to the court of errors and appeals or. to the court of chancery for leave to. execute the order or decree of the chancery court so fax forth as may be necessary for the protection and preservation of the subject of the appeal, and such an order will be made when the exigencies of the situation call for it; but no order.will be made that would destroy or impair the subject of the appeal.”

This ease is one for alimony, and alimony can be granted only where the parties to thé suit occupy toward each other the position of husband and wife.. The marital status of these litigants was established by the chancery decree, and an award of alimony was made. The right of the complainant to compel the defendant to support her is the subject of this litigation.

In Pennsylvania Railroad Co. v. National Docks Railway Co., 54 N. J. Eq. 647, it was held that—

“The effect of filing an appeal to this court is to prevent the decree in the court of chancery from destroying or impairing the subject of the appeal, or being in any degree used for that purpose.”

It will be seen at a glance that Ashby v. Yetter is not out of harmony with this doctrine of the National Docks Case. The orders made by this court in the two cases oí Lawton v. Beddell and Gorman v. Hinkle, copied into the vice-chancellor’s opinion in Ashby v. Yetter, were- orders permitting the decree in chancery in each case to be enforced pending appeal, for the protection and preservation of the subject of the appeal, but not permitting the avails of the litigation, or any part thereof, to be turned over to the party Avho held the decree.

How, as the payment of permanent alimony is the subject of the decree of the court below in this case, every installment of that alimony paid by the husband to the Avife would be in execution of the decree pro tanto, the result being, that any such payment, pending appeal, would be an impairment of the subject of the appeal to that extent or degree, and also an invasion of defendant-appellant’s right to have' his property preserved and not diminished during the contest in this court. To protection from this, under the National Docks Case, and also Ashby v. Tetter, we think he is entitled. The course which, as thus indicated, is required for the preservation of the rights of the defendant-appellant, is even more fundamentally required, in order that the jurisdiction of the appellate court may not be destroyed or impaired.

We do not wish to be understood as holding that this court has not the power to award alimony pending an appeal — that is, alimony pendente Hie. That jurisdiction is firmly established, and the instances in which it is exercised are numerous. But, as this is not an application for such- alimony, we have not taken into consideration the question whether the applicant is entitled to an allowance of that kind here or ought to be remitted to the court of chancery to make application there, the question not being before us.

These views necessarily lead to the denial of the pending motion.


author: Gummere, Chief-Justice.

text:
    Robert H. McCarter, attorney-general, respondent, v. Lehigh Valley Railroad Company of New Jersey et al., appellants.
    [Argued November 17th, 1915.
    Decided June 19th, 1916.]
    1. Under the act of 1867 (P. L. 1867 p. %51) tidelands belonging to the state were granted to a canal company under an agreement that the property should be held subject to specified public uses, and that at the expiration of the charter of the company the lands granted, with the improvements, should revert to the state. By the act of 1871 (P: L. 1871

      p. 44) the canal company leased the granted land and its franchises in perpetuity to a railway company. Thereafter the riparian commissioners without authority conveyed the land absolutely to the railroad company. —Held, that, even if it be conceded that the lease destroyed the state’s reversionary interest in the land, yet, as that land was subject to public easements, the state is entitled to have an unauthorized conveyance which destroyed such easements decreed to be null and void.
    2. Whether a lease of tidelands made by the state’s grantee under the act of 1871 (P. L. 1871 p. 44) destroyed the state’s reversionary interest, should not now be determined as it is not material to the case at bar, and as there can be no reverter for practically sixty years.
    On appeal from' a decree of the court of chancery advised by Vice-Chancellor Stevens.

      Mr. Gilbert Collins, for the appellants.

      Mr. John W. Wescott, attorney-general, and Mr. Herbert Boggs, assistant attorney-general, for the state.
   The opinion of the court was delivered by

Gummere, Chief-Justice.

The attorney-general, under authority conferred for the purpose by “An act to compel the determination of title to riparian lands and lands under water in which the state claims an estate in remainder, or’ reversion, and to quiet the title to the same” (P. L. 1907 p. 96), filed an information for the purppse of testing the validity of a conveyance made July 12th, 1889, by the riparian commissioners to the Lehigh Valley Eailroad Company, purporting to vest in the grantee the fee-simple absolute of certain lands under the waters of the Hudson river, and known as the Tidewater Basin. The case having been heard upon the pleadings and proofs, it was ordered, adjudged and decreed that the deed which was attacked by the information “was executed and' delivered without any legal warrant or authority; that it is ultra vires, and 'shall be set aside and declared void and 'of no effect, and the title pf the state to the reversionary interest and estate in the said lands and premises shall be free and clear, and freely and clearly acquitted and discharged of and from all right, title and interest, claim and demand of the several defendants, and each of them, arising or growing ont of said deed of July 12th, 1889, and free and clear of any cloud or uncertainty cast upon the title of the state by the said deed,” upon certain terms and conditions subsequently set forth in the decree. From this decree the defendant appeals.

The sole question presented by the pleadings was the validity of the conveyance of July 12th, 1889; and tire only matter to be determined on the appeal is whether the decree adjudging it to be null and void was justified under the law and the facts.

The land involved in the controversy was granted in 1867 to the Morris Canal and Banking Company by a special act of the legislature approved March 14th of that year. P. L. 1867 p. 251. This grant described the locus in quo by metes and bounds, and -was made upon condition that the property granted should be subjected to certain specified public uses during the continuance of the charter of the grantee companjq and that at the expiration thereof the lands' granted, with the improvements thereon, should revert to the state on the same terms and conditions provided in the original charter of the company with relation to its canal, and the appurtenances thereto. The conveyance made by the riparian commissioners, under date of July 12th, 1889, granted not only the tract of land described therein, but the right and privilege of excluding the tidewater therefrom by filling in, or otherwise improving the same, and also the right to appropriate this land to the exclusive private use of the grantee.

We agree with the learned vice-chancellor that no power to make such a conveyance (that is, a conveyance extinguishing the public user reserved under the special grant of the legislature made in- 1867) was. vested in the riparian commissioners, either by the supplement to the Riparian act of 1869, or by any subsequent legislation, and approve the reasons set forth in his opinion in support of this conclusion.

It necessarily follows, as a result of this finding, that the state is entitled to a decree declaring the deed in controversy to be null and void.

And this is so without regard to the effect which the act of 1871 (P. L. 1871 p. 44), authorizing the Morris Canal and Banking Company to lease its property and franchises in perpetuity to the Lehigh Valley Railroad Company, and the subsequent execution of the lease pursuant to that authority has, upon the reversionary interest in the canal and its appurtenances, reserved to the state by the charter of the company, and the various supplements thereto; for even if that reversionary interest had been entirely wiped out thereby, as the appellants contend, this fact could not operate to breathe life into an absolutely unauthorized conveyance made by the board of riparian commissioners, the purport of which was to destroy the public easements, reserved by the state in the grant of 1867, in the property attempted to be conveyed.

It has seemed to us, therefore, unnecessary, for the purpose of determining the subject-matter of this litigation, to consider what effect the statute of 1871, and the lease thereunder, had upon the reversionary interest of the state in the property of the lessor company. ' Being unnecessary, the inadvisability of an expression by this court at this time upon the subject seems to us clear, Avhen it is remembered that the right of the state to take over the property (if such right shall then exist) does not become a present one until the year 1974, a period nearly sixty years distant from the date of this deliverance. The wisdom of leaving the subject to the untrammeled decision of the judges who shall then constitute our courts will not, we think, be challenged.

It may be thought that the language o| the decree recited in the beginning of this opinion, viz., that the title of the state to the reversionary interest and estate in the locus in quo shall be free and clear from all right or cláim of the defendants arising out of the deed of 1889, and free and clear of any cloud or uncertainty cast upon the title of the state by that deed, requires a consideration of the matter just adverted to — that is, that an affirmance of the decree involves an approval of the view expressed by the learned vice-chancellor upon the matter. This, however, is not so. If the effect of the lease was to create an estate in perpetuity in the lessee, as the appellants contend, and if the act of 1871 authorized its créátion, nevertheless, that estate was a conditional one, dependent upon the performance by the lessee of the various covenants and other provisions of the lease binding upon it, and a failure of such performance will terminate the lease at the option of the lessor. It is so expressly provided by paragraph 17 of that instrument. The effect of such a termination, if it shall occur,'will be to revest in the lessor the canal and its appurtenances, subject to the state’s reversionary right therein, if such revesting shall occur prior to the expiration of the time limit iked in the canal company’s charter for the exercise of the state’s right to take over the same. The most that can be said, therefore, in favor of the appellant’s claim, is that the lease does not work an extinguishment of the state’s right of reversion, but changes it from an absolute to a conditional one, the condition being that the lease shall come to an end by the act of the parties to it, during the term fixed for the exercise, by the state, of its reversionary right, of, perhaps, after the expiration of that term.

The state, therefore, was entitled to have a decree which not only adjudged the deed of 1889 to be null and void, but also that its reversionary interest, whether absolute or contingent, in the canal and its appurtenances, should be declared freed and cleared from all claim and demand-of the appellants arising under that deed.

The decree under review will be affirmed.

For affirmance — The Chief-Justice, GrAREisonj Swayze, Teenci-iard, Paekee, Bergen, Mintuen," Kalisch, Black, White, Williams — 11. ' '

For reversal — Sone.


author: Trenchard, J.

text:
    In the matter of the estate of Aaron B. Atkinson, deceased.
    [Submitted December 6th, 1915..
    Decided June 19th, 1916.]
    1. A bill for mainteuance of the widow of the testator at a hospital, subsequent to the death of the testator, is not a proper claim against the assets of the estate in the hands of the executor, no authority for such expenditure being found in the will.
    2. Where an exception to a personal claim of an executor against the estate in his hands is treated by the executor before the master (to whom the matter had been referred), and in the orphans court, and in the prerogative court, as challenging the legality and correctness of the claim, it is too late for him to assume a contrary position in this court.
    3. In an executor’s account the burden of proving .items of discharge is upon the accountant.
    4. On exceptions to an executor’s account, the executor is not competent, when he offers himself asi a witness in his own behalf, to testify as to any transactions with or statements by the testator.
    On appeal from a decree of the prerogative court advised by Vice-Ordinary Backes, whose opinion is reported in 85 N. J. Fq. m.

      Mr. Michael Nelson Ohmalis and Mr. Archibald F. Slmgerland, for Clarence T. Atkinson, executor, &e.

      Mr. John H. Hutchinson, for the Bordentown Banking Company.
   The opinion of the court was delivered by

Trenchard, J.

Exceptions were filed to the account of Clarence T. Atkinson, executor under the will of his father, Aaron B. Atkinson, deceased, by the Bordentown Banking Company, a creditor.

TJpon the coming in of the report of the master, to whom the matter had been referred, the exceptions were sustained by the orphans court of Burlington county. The prerogative court, on appeal, affirmed the decree of the orphans court, excepting one small item not now in controversy, and the decree of the prerogative court is now here for review.

We are of the opinion that the decree must be affirmed.

It is first contended that it was erroneous to sustain the exception to the allowance of a claim for the amount of a hospital bill. We think the claim was properly disallowed. The bill was for maintenance of the widow of the testator at the hospital subsequent to the death of the testator, and, consequently, was not a proper claim against the assets of the estate in the hands of the executor, no authority for such expenditure being found in the will. Johnston v. Morrow, 28 N. J. Eq. 327; 18 Cyc. 445.

It is also contended that it was erroneous to sustain the exception to the -allowance of the personal claim of the executor against the estate for $800. We think not.

The rule of the orphans court (formerly number 5, now number 20), relating to exceptions to the accounts of executors, &c., requires that where the objections are to disbursements, they shall state specifically the item or items and particulars objected to, and the reasons therefor.

The accountant argues that the particular exception to his claim is not, under the rule, sufficient, in substance, to challenge its legality and correctness. But whether technically so or not, it was so treated by the accountant before the master, and in the orphans court, and in the prerogative court, and it is now too late for him to assume a contrary position in this court. •

In an executor’s account the burden of proving items of discharge is upon the accountant. Brewster v. Demarest, 48 N. J. Eq. 559.

This wa!s recognized by the executor in the present case, and he claims to have borne that burden by the testimony he gave in his own behalf.

The question presented, therefore, is, was such testimony competent for that purpose? We agree with the master that it was not.

Section 126 of the Orphans Court act {Comp. Stcd. p. 3857) does not qualify an executor to prove his own demands against the estate in his hands. It makes an executor compellable to testify if called in reference to his account at the instance of any party interested in the account. In the case now under review the executor was not called by the court or any party interested in the account within the meaning of the act, but offered himself as a witness in- his own behalf. Under these circumstances, he was not competent to .testify in his own behalf as to any transaction with or statements by the testator. Comp. Stat. p. 2218 § 34 Smith v. Burnet, 34 N. J. Eq. 219; affirmed, 35 N. J. Eq. 314.

The claim in question was for money loaned to the testator in his lifetime and for moneys paid out at his request, and the like.- The testimony of the accountant, by which he attempted to furnish the essential evidential support for his claim, was as to personal transactions with the testator, and hence was'incompetent for that purpose. And this is so clearly true that the accountant makes no contention to the contrary in this court. There being no other evidence, the .claim in question was without support and was properly disallowed.

The decree below will be affirmed, with costs.

For - affirmance• — The Chief-Justice, Garrison, Swayze, Trenoi-iard, Parker, Bergen, .Minturn, Kalisch, Black, "White, Terhune, Heppeni-ieimer, Williams, Taylor — 14.

For reversal — Hone.


text:
    John G. Horner, receiver, &c., complainant and appellant, v. George W. Heinecke et al., defendants and respondents.
    [Argued March 10th, 1916.
    Decided June 19th, 1916.]
    1. A beneficial society acquired no title to excess dues paid by the members thereof pursuant to an order of the court of chancery providing in effect that they be deemed involuntary payments to be returned if determined by the court to have been unlawfully exacted, it appearing that the court had so determined. Such excess fund will be deemed to be a trust fund held by the society for the benefit' of the members who paid it.
    2. The mere fact that not all of the members of a beneficial society who were entitled to á fund held by it for their benefit formally assented to the segregation of the fund and placing it in the hands of other trustees for their benefit, is no reason .for setting aside the transfer, since, in the absence of anything appearing to the contrary, it will be assumed that they all assented to an action so clearly beneficial to them.
    3. Where a beneficial society held certain unlawfully exacted excess due§ in trust awaiting the result of litigation, and instead of keeping it in the form of cash used it to pay death benefits, so that the death benefit fund became indebted to the excess fund, it was legitimate for the society to use the mortgages in which the deat¿ benefit fund was invested to discharge the known indebtedness of that fund to the excess fund.
    4. When a beneficial society used cash belonging to an excess dues trust fund to pay death benefits, keeping separate accounts so that the exact amount of the indebtedness of the death benefit fund to each member entitled to a share of the excess fund was capable of being ascertained, then, upon the same being so ascertained, it was proper for the society to pay the money due to the excess fund from the death benefit fund out of the assets of the latter.

      5. A beneficial society that uses to its own profit funds held in trust awaiting the result of litigation, is liable for interest on the amount at a rate conformable to the rate it would have had to pay if it had borrowed elsewhere the money for such use.
    6. By the statute (Comp. Stat.-p. 44% § 84), and independent thereof, where the complainant and defendant are each successful on one or more substantial issues, neither is entitled in the court of chancery to costs against the other.

      On appeal from a decree of the court of chancery, advised by Vice-Chancellor Learning.

      Mr. Oscar B. Redrew, for the appellant.

      Mr. John F. Earned, for the respondents.
   The opinion of the court was delivered by

Trenchard, J.

This is an appeal from a decree dismissing a bill filed by the receiver of “Supreme Circle, Brotherhood of America,” a bene^ fieial society, to set aside certain assignments of mortgages made by the society under the following circumstances:

The society was incorporated many years ago. In 1890, it organized a death benefit fund for members of the subordinate “circles,” collecting the dues through such local circles. In 1909, by amending its by-laws, it attempted to change the rate of dues of members from a flat rate of fifty cents a month to an increased rate graduated upon the ages of the members. On the application of a member who had joined before the adoption of the amendment, a preliminary injunction was issued by the chancellor restraining the expulsion of members who did not pay the increased rate of dues, but refusing to stay the collection thereof. The order provided, respecting such dues, that

“The members may pay the same and such payments will be regarded as made under protest, without formal protest being entered, so that if the suit shall be finally determined in favor of the complainant, the whole class will receive the benefit of the payments.”

Accordingly, the supreme circle collected the dues at the new rate, first notifying the local circles that “if the action of the supreme circle, upon final hearing of the cause, is not sustained, the excess will be 'refunded to the members.” On final hearing the increase of dues was held to be illegal (Poole v. Supreme Circle, 85 Atl. Rep. 821), and that was affirmed in this court. 80 N. J. Eq. 259.

Thereafter two other attempts were made to provide for increased dues, both of which were determined to he ineffectual. Park v. Supreme Circle, 81 N. J. Eq. 330; Park v. Supreme Circle, 83 N. J. Eq. 131.

Then it was that the society determined to finally restore to all members to whom restoration had not already been made all excess dues which had been paid under the three attempted amendments. The amount of such excess dues (inclusive of interest) was $86,778.05. The supreme circle had its death benefit fund largely invested in mortgages. In order to avoid the disturbance of these investments pending the litigation concerning the increased dues, the society had used the excess dues to pay the death benefits as they fell due. Accordingly, it assigned mortgages from the death benefit fund in an amount equal to the indebtedness of that fund to the excess dues fund to certain agreed upon trustees for the benefit of the members who had paid the excess money.

Later, the supreme circle, having voluntarily surrendered its charter, the receiver, appointed to wind up its affairs, filed this bill for the purpose of setting aside the assignments of mortgages so made by the society to such trustees.

We are of the opinion that the decree dismissing the bill should be affirmed.

We think that the society acquired no title to the excess dues paid by the members under the order of the court of chancery providing in effect that they be deemed involuntary payments to be returned to the members if determined by the court to be an unlawful exaction. The court having determined that the by-law requiring such excess payment was illegal, the payment in no sense inured to the benefit of the society, but retained its character as the money of the members who advanced it under the new but invalid by-law. It was held in trust awaiting the result of the litigation. Certainly, such was the intention of the society, and no doubt such was the intention of tire members in •so far as they áre deemed to have had any intention respecting it. The return of the money was delayed, but that did not change the relative rights of the parties respecting it. It is true that the amended by-law was being attacked by and in behalf of members who joined before it was adopted. But it was the design of the society to enforce that by-law in its entirety or not at all. It was a new condition which the society endeavored to impose upon all its members, present and future alike. It was a new rate of dues graduated according to age, and if it could not be enforced in its entirety as against all the members, old and new, it could not be enforced at all.

The mere fact that not all of the overcharged members formally assented to the action of the society in segregating these funds and placing them in the hands of trustees for the several members who were entitled to them, is no reason for disturbing such action, since, in the absence of anything appearing to the contrary, it will be assumed that they all assented to an action so clearly beneficial to them.

It is further contended that the society had no right to transfer the mortgages to repay the overcharged members because it held them in trust for the death benefit fund. But we think a complete answer to this is, that under the circumstances, the unlawfully exacted excess payments made by the members never became the property of the society, but was held in trust awaiting the result of the litigation. Instead of being kept in the form of cash, the cash was used to pay death benefits, so that the death benefit fund really became a debtor to the excess fund. The vice-chancellor held that under tírese circumstances it was proper to use the mortgages to discharge this indebtedness. We think that was right. The legal situation was that the death benefit fund was indebted to the excess fund, and it was perfectly legitimate to pay money due to the one trust fund from the other trust fund out of the assets of the latter. The fact that the death benefit fund was held by the society as a trust fund can make no difference; the excess fund was also so held.

It is next argued that the segregation of the excess fund, and its transfer to the trustees of the beneficiaries, was not justified because it was not capable of identification. But we think there is no merit in this contention.

ISTo doubt, it would have been better if the society had kept this money separate from any other fund, then there would have been no question about the identification of the money itself. But this was not done. It was used to pay death benefits as they fell due. However, a separate account was kept so that the exact amount of the indebtedness of the death benefit fund to each member entitled to a share of the excess fund was capable of being ascertained. The amount was so ascertained, and mortgages representing it were taken from the treasury and assigned to the duly-accredited trustees of the members who were entitled to it. We think that there was a sufficient identification of the fund — of the money itself. The identification was impressed upon the funds by the society, who was the trustee thereof. The transaction is not one to be commended because the commingling of trust moneys with other funds should not be indulged, but it is a transaction that equity will sustain so far as the restoration of the trust funds to the beneficiaries is concerned. Smith v. Combs, 49 N. J. Eq. 420; 24 Atl. Rep. 9.

It is also insisted that the allowance of interest was erroneous. We think not. It appeared that the society in its accounting with the trustees of the overcharged members allowed interest upon the excess funds in its hands. The society having used the fund to its own profit, the vice-chancellor properly allowed interest at a rate conformable to the rate it would have had to pay if it had borrowed elsewhere the money for such use. Agnew Company v. Paterson Board of Education, 83 N. J. Eq. 49; 89 Atl. Rep. 1046; affirmed, 83 N. J. Eq. 336; 90 Atl. Rep. 1135.

Lastly, it is contended that the vice-chancellor erred in refusing costs to either party. Not so. The contention is based upon the fact that the society, by reason of an erroneous calculation of interest, paid the trustees of the overcharged members $1,126.15 more than it should have paid. This the vice-chancellor ordered repaid, and it was paid to the complainant before the final decree. was entered dismissing the bill. By the statute (Comp. Stat. p. 442 § 84), and independent thereof, where, as here, complainant and defendant are each successful on one or more substantial issues, neither is entitled in the court of chancery to costs against the other. Diocese of Trenton v. Toman, 70 Atl. Rep. 881.

The decree below will be affirmed, with costs in this court.

For affirmance — Ti-ie Chief-Justice, Garrison, Swayze, Trenohakd, Parker, Bergen, Minturn, Kalisch, Black, White, Terhune, Heppenheimer, Williams,. Taylor, Gardner — 15.

For reversal — Hone.


text:
    William Yucker et al. v. Arthur Morris et al.
    [Submitted March 27th, 1916.
    Decided June 19th, 1916.]
    1. A district court judgment, docketed in the common pleas, operates as a judgment obtained in a suit originally commenced in the common pleas.
    2. In a suit in partition, wherein a sale of lands sought to be partitioned is made, and a judgment, is obtained against a distributee at any time prior to the distribution of the proceeds of sale, such judgment creditor may have payment'of the judgment out' of the proceeds of the sale of such share against which such judgment would be a lien had such share been owned by the debtor in severalty.
    3. A tenant in common of lands sold in a partition proceeding was made a defendant as “T. Edward Morris.” Pending suit a judgment was obtained against him by that name in the district court, and' was subsequently docketed- in the common pleas as “Edward Morris,” defendant. Still later “Thomas E. Morris” ordered the sale master to pay his share of the funds to a trust company on account of an obligation which fell due before the recovery of the judgment. It was' admitted that Morris was known by the several names of “T. Edward Morris,” “Edward Morris” and “Thomas E. Morris,” and that he was the distributee in the partition suit and the defendant in the judgment, and the person who signed the order. On application for distribution it appeared that the trust company had parted with nothing to obtain the order, and was not misled or induced to alter its position to its disadvantage by reason of the error in docketing. — Held, that the judgment creditor takes the fund in preference to the trust compdny.

      On appeal from a decree of the court „of- chancery advised by Vice-Chancellor Griffin, whose opinion is reported in 85 N. J. .Eq. 476.

      Mr. Leon Abbett, for the executors of Louisa M. Tournade, deceased.

      Mr. George J. McEwan, for the Highland Trust Company.
    The opinion of the court was delivered by
   Trenchard, J.

This was originally a partition suit. One of the tenants in common of the lands sold in tire proceeding was made a defendant as “T. Edward Morris.”

Shortly after the bill was hied one Louisa M. Tournade recovered a judgment in the Hoboken district court against “T. Edward Morris” — the date of the recovery being May 12th, 1914, and the return day of the subpoena in the partition suit being May 5th, 1914.

On May 14th, 1914, the Tournade judgment was docketed in the Hudson county common pleas court under the title of “Louisa M. Tournade, plaintiff, v. Edward Morris, defendant.” After this docketing, and on December 7th, 1914, Louisa M. Tournade was admitted as a party defendant in the partition suit.

On June 13th, 1914, “Thomas E. Morris” signed a “request” directed to the special master who should thereafter sell the property in the partition proceeding, requesting the master to deduct from his distributive share of the proceeds.of sale “the sum of $130 and interest from April 26th, 1914, together with protest fees amounting to $1.60,” and to pay the same to the order of the Highland Trust Company.

The lands were sold by the special master October 6th, 1914, and the proceeds of the sale were deposited with the clqrk of the court.

When the question of the distribution of the fund came up upon an application under Comp. Stat. p. 3907 31, both, the executors of Mrs. Tournade (who was then dead) and the Highland Trust Company claimed to be entitled to be paid the share of Morris, that share being not sufficient to pay both claims.

The learned vice-chancellor held that the Highland Trust Company was entitled to the fund, basing his conclusion upon the fact that the judgment docketed in the Hudson common pleas court against “Edward Morris” was a misnomer, and therefore void and of no effect against the Highland Trust Company.

We are of the opinion that such conclusion cannot be sustained.

A district court judgment, docketed in the common pleas, operates as a judgment obtained in a suit originally commenced in the common pleas. Comp. Stat. p. 2005 172.

In a suit in partition, wherein a sale of the lands sought to be partitioned is made, and a judgment is obtained against a distributee at any time prior to the distribution of the proceeds of sale, such judgment creditor may have payment of the judgment out of the proceeds of the sale of such share against which such judgment would be a lien' had such share been owned by such debtor in severalty. Comp. Stat. p. 3907 31.

It appears from the “agreed facts” that the judgment in the district- court was recovered against “T. Edward Morris.” It likewise appears that this “T. Edward Morris,” against whom such judgment was obtained, was the same person who was the defendant and distributee in the partition suit and who executed the request for the payment of his share to the Highland Trust Company. This request was signed about a month after the docketing of the judgment in the court of common pleas. The judgment in the district court was undoubtedly valid. The designation of the defendant as “Edward Morris,” instead of “T. Edward Morris,” in the record of the judgment in the common pleas court, will be presumed to have been due to- the mistake either of the clerk of the district court in making out the “statement” thereof, or of the clerk of the court of common pleas in making his record, since, by the statute, it is provided that in case of docketing such a judgment the statement is made by the clerk of the district court and the entry is made by the clerk of the court of common pleas. Comp. Stat. p. 2003 170.

Obviously, the judgment creditor ought not to suffer for this mistake unless it has resulted in injury to some innocent party.

The trust company makes' no such claim. It admits that Mbrris was known by the several-names of “T. Edward Morris,” “Edward Morris” and “Thomas E. Morris.” It is not suggested that the trust company was misled by the mistake in docketing, or that it was induced to alter its position, to its disadvantage, by reason thereof. It parted with nothing to get the order on the special master. On the contrary, it appears that its order was given and obtained to provide for the payment of an obligation which fell due prior to the recovery of the Tournade judgment.

- We therefore ■ conclude that under the facts of this case the judgment creditor should take the fund ‘ in preference to the trust company.

The decree of the court below will be reversed, with costs, and the record remitted to the court of chancery for further’ proceedings in accordance with this opinion.

For affirmance — None.

For reversal — The Chief-Justice, Garrison,- Swayze, Trenohard, Parker, Bergen, Minturn, Kalisoh, Black, White, Terhune, Heppenheimer, Williams, Taylor, Gardner- — -15. .


author: Parker, J.

text:
    Richard A. Motley, complainant-appellant, v. Henry I. Darling and Charles Flynn, defendants-respondents.
    [Argued March 9th, 1916.
    Decided June 19th, 1916.]
    A bill setting up that complainant had parted with certain property upon the defendants’ undertaking to deliver as payment therefor certain endorsed notes which were executed and endorsed in complainant’s pres- • ence, and that on delivery of the property defendants gave him notes forged both as to signature and endorsement instead of the real notes, which they destroyed, and praying discovery and establishment of the true notes and payment of the moneys due thereon by the maker and endorser — Held, erroneously dismissed for want of equity or because of adequate remedy at law.
    On appeal from a decree of the court of chancery advised by Yice-Chancellor Lewis.

      Mr. Joseph Anderson, Sr., for the appellant.

      Mr. Charles E. S. Simpson/ior the respondents.
    The opinion of the court was delivered by
   Parker, J.

The bill was dismissed for want of equity and because complainant had an adequate remedy at law. There is no opinion of the vice-chancellor printed' in the case, and we are therefore not apprised of the reasons for his action except- so far as set out'in the order itself. - /

We consider that the dismissal of the bill was erroneous. It was predicated on the statements of-the bill itself; for, although there was an answer and replication, the latter was struck out and the answer withdrawn-; so the case stands as though there had been a demurrer or a motion to strike out the bill, and all the facts properly pleaded therein are taken as true.

The bill is for a discovery as to the execution of two- notes, which were to have been signed by defendant Plynn and endorsed by defendant Darling and were to be delivered to complainant as the consideration for the sale and delivery by him of certain personal property, but which were not so delivered; and in view of the alleged fraudulent destruction of the notes by defendants, or one of them, for a decree ■ establishing the same and directing the payment of the moneys payable thereunder. A perusal of the bill shows the perpetration of a deliberate fraud on complainant which ought especially to appeal to a court of equity and impel it to exercise its fullest powers by way of relief.

The bill sets up- that complainant owned the lease of a garage property, and also owned certain automobiles and other personal property therein, all which defendant Darling wished to acquire, and, after negotiation, terms of sale were agreed on and a bill of sale was drawn with the vendee’s name in blahk, the blank being filled in at the time of execution with the name of the defendant Plynn. There was also a written assignment of the lease. The price was $1,479.44. Por payment of this, two notes were drawn payable to complainant, one of $500 at four months, and one of $700 at six months, both made by Plynn. and endorsed by Darling, who also endorsed a note for Plynn of $300, to be discounted in order to enable the latter to- pay the remainder to complainant in cash. The cash was paid, but, apparently, by' agreement, the notes were withheld and placed in the hands of Darling’s attorney, to be delivered when complainant should turn over to Plynn the possession of the garage and property, as well as the bill of sale and assignment of lease. The latter papers and the possession were duly delivered, but, instead of the genuine notes, two similar but forged notes were delivered; and complainant, believing them genuine,'negotiated them, and afterward, when suit was brought on one of them, it rvas defeated on the ground of forgery; and, in view of this re-suit, a suit brought on the other was discontinued, and complainant took both notes back. "

The bill further charges that Darling in some way obtained possession of the genuine notes and destroyed them; and that by reason of the fraud practiced on him by the defendants, complainant has received neither the notes nor the money repre-' sented by them.

The equity of this bill seems almost too plain for discussion. It shows a vendor who has parted with his property for what he supposed to be the negotiable promises to pay of one defendant, and the endorsements of the other, to which he was entitled by his contract, and who finds he has two useless pieces of paper. If the notes as actually made were in existence, • he would be entitled to ask specific performance of the agreement to deliver them. Pattison v. Skillman, 34 N. J. Eq. 344; Schraff v. Wolters, 61 N. J. Eq. 467; Fred v. Fred, 50 Atl. Rep. 776. As they appear to be destroyed, the suit takes the form of a bill for the discovery and establishment of instruments, lost or destroyed, not by complainant, but by defendants in fraud of his rights, and not merely negligently or by inadvertence, as in Wells v. Flitcraft, 43 Atl. Rep. 659, and, on the theory of retaining the case and administering a complete remedy, for a decree to pay the moneys due. Both discovery and the establishment of lost instruments are peculiarly subjects of equitable cognizance and relief, especially in cases of fraud, so that the equity of- the bill is plain. As to adequacy of the remedy at law, neither replevin nor trover will recover the destroyed notes; and complainant cannot sue on them as existing obligations, for he does not hold them, and never did hold them, because they were never delivered to him. His only recourse at law would be a suit for damages by reason of their non-delivery, which would raise issues that might result in an entire denial of justice, which has already, if the'bill be true, been too long delayed.

The decree of the court of chancery will be reversed and the record remitted, to the end that the defendants be required to answer and the causes therein proceeded with in accordance with these views.

For affirmance — None.

For reversal — The ' Chief-Justice, Garrison, Swayze, Trenchard, Parker, ' Bergen, Minturn, Kalisch,' Black, White, Terhune, Heppenheimer, Williams, Taylor, Gardner — 15.


text:
    Denis Gallagher, complainant-respondent, v. Lembeck & Betz Eagle Brewing Company, defendant-appellant.
    [Argued March 20th, 1910.
    Decided June 19th, 1916.]
    1. Even though the defence to a promissory note be good at law, yet if it was given in effect as security for the performance by the maker of an agreement with the payee, and with the agreement that in case of such performance it should be returned, the maker having performed his agreement is entitled to maintain a bill in equity to enjoin suit on the note at law and to require its redelivery to him.
    2. If the defence to a note be purely equitable and fail at law because not cognizable in the law court, such result will not bar a court of equity in affording appropriate relief'by enjoining the collection of the judgment at law.
    3. In the latter case the complainant, defendant-at-law, may resort to equity without testing the ruling of the law court by appeal.
    4. The facts in this bill Held to present a case for equitable cognizance similar to O’Brien v. Brewing Go., 69 N. J. Eg. '-111. ,
    On appeal from a decree of the court of .chancery advised by Vice-Chancellor Lewis.

      Mr. D. Eugene BlanJcenhonu, for the appellant.

      Mr. Raymond Dawson, for the respondent.
   The opinion of the court was delivered by

Parker, J.

The appeal is from the denial of a motion to strike out the bill of complaint praying an injunction against the enforcement of a. judgment at law. The grounds for the motion that are urged jn this court are — first, that complainant’s defence to the law action was maintainable only at law; second, that complainant had an adequate remedy at law by appeal from the judgment; third, election to submit to the jurisdiction of the law court; fourth, laches;' fifth, res judicata; sixth, general want of equity.

The action at law was on the renewal of what is commonly called a brewery note, which accompanied a chattel mortgage on saloon property and fixtures. The facts alleged in the bill are that complainant was, in 1893, a well-known and successful saloonkeeper, and that the defendant company, wishing to have a saloon opened at a specified corner in Jersey City for the exclusive sale of their malt products, agreed with complainant in that year, after negotiation, that if he would take charge of the saloon and conduct the business at that place, they would supply the funds to fit out and furnish the saloon; that on reaching this agreement the defendant took a five-year lease of the premises with renewal privilege, and paid the sum of $16,-000 for furniture and fixtures bearing their trade mark. The saloon was opened with complainant in charge as proprietor, and he so continued until May 1st, 1909, when the-lease was not renewed because of the sale and demolition of the building. Up to the last year the lease stood in the name of defendant.

The bill further shows that defendant, shortly after fitting out the saloon, claimed that complainant, in view of his profitable business, should bear a part of the initial expense, and, after argument, he agreed to pay $4,000 of this, and did so. That afterwards controlling officers of the company

“represented to your orator that in order t'o have its books appear correct, and in order to secure the sale by your orator of the beers, ales, &c., of the said Lembeck & Betz Eagle Brewing Company, your orator should give to him some sort of agreement or paper which would assure to said Lembeck & Betz Eagle Brewing Company the sale by your orator of its products during the time your orator carried on his business in said premises, and suggested to your orator that he should give to it a promissory note for $12,000, being equal to the expense of said Lembeck & Betz Eagle Brewing Company in the fixtures or furnishing of said premises, representing to your orator-at the time that said .note would not be presented for payment nor discounted, and no attempt would be made to collect the same, and he would never be called upon to pay it if-your orator sold the products of said Lembeck & Betz Eagle Brewing Company in said premises aforesaid, during the time he continued business therein, and upon the discontinuance of your orator of business, therein and return to said Lembeck & Betz Eagle Brewing Company of the fixtures and furnishings installed in said premises, said note would be destroyed and cancelled as though never made.
“Your orator further shows that relying on the representations of said Lembeck & Betz Eagle Brewing Company so made as aforesaid, your orator, induced thereby, signed a promissory note for the sum of twelve thousand dollars ($12,000), payable on demand and dated about July, 1895, to the said Lembeck & Betz Eagle Brewing Company, and handed the same over to it or its representatives.”

The bill goes on to state that for sixteen years complainant continued to run the saloon and to sell the defendant’s beer, &e., exclusively (the note being kept alive by renewals about every six years), and in every respect performed his part of the arrangement until compelled to vacate by the expiration of his tenancy as above; that he then returned the furnishings and fixtures to defendant, and demanded his note back, but that, instead, the defendant brought suit thereon in the circuit court, an answer sotting up the above facts was struck out by the court, and judgment entered over it for the amount of the note and interest, on the ground that the facts constituted no defence at law.

The bill, which is duly supported by affidavit, prays a reformation of the note to express the contract between the parties, an injunction against proceeding on- the -judgment, a discovery, and vacation of the judgment and delivery and cancellation of the note.

We are of opinion that this bill, the statements of which for present purposes must be taken as true, makes out a complete case for equitable relief. 'It is very similar to the case of O’Brien v. Paterson Brewing and Malting Co., 69 N. J. Eq. 117, in which Vice-Chancellor Pitney awarded an injunction and decreed the delivery of the note for cancellation. Whether the complainant may maintain a defence at laiv on these facts seems immaterial in view of the decisions. In Metler v. Metler's Administrator, 19 N. J. Eq. 457, a similar case, it was held that even though the' defence was good at law, the complainants were entitled as against the payee to an injunction against enforcement of the note at law, and to a decree that it be delivered up. In Headley v. Leavitt, 65 N. J. Eq. 748, it was held that if the defence to the note b.e not good at law, the defendant at law may after judgment and without appeal of the judgment at law invoke the aid of a court of equity.

We see nothing in the ground of laches, or in any other ground assigned. The order sustaining the bill will be affirmed, with costs.

For affb'mance — The Ci-iief-Justioe, Garrison, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, • Teri-iune, Heppeni-ieimer, Williams — 12.

For reversal — Hone.


author:
Bergen, J.
     Parker, J.

text:
    W. Eugene Turton, complainant-respondent, v. Charles B. Grant et al., defendants-appellants.
    [Argued December 1st, 1915.
    Decided June 19th, 1916.]
    1. Where a trustee in executing his trust makes advances proper to be made, he has a lien on the trust estate for repayment which is prior to any encumbrance imposed thereon by the beneficially.
    2. A trustee may enforce such a lien in a court of equity where an accounting may be taken of his advances, his lien established and enforced, and the sale of the trust estate decreed to satisfy the lien, preserving so much of the trust fund as may be entitled to priority over the trustee’s advances.

      On appeal from a decree of the court of chancery.

      Messrs. Scharrmghausen Hartpence and Mr. Frank E. Bradner, for the appellants.

      Messrs. McCarter & English, for the respondent.
   The opinion of the court was delivered by

Bergen, J.

The bill of complaint avers that the ownqr of a parcel'of land began the erection of four buildings thereon and after partial construction became financially embarrassed and unable either to finish the buildings or to pay debts contracted for the work done, thereupon the creditors, contractors for different parts of the construction, made an arrangement with the owner that the land be conveyed to the complainant, which was done. At the time of the transfer of the title there were mortgages on each lot upon which the buildings were located, three for $4,000 each, and one for $4-,500, on account of which advances had been made so that but $8,900 remained to be paid by the mortgagee. The three mortgages of $4,000 were subsequently canceled and others given by the complainant in their stead for $4,200 each, thus increasing the amount received by complainant on account of the mortgages to $9,500, out of which $200 was paid with consent of the creditors, to the owner as a consideration for the conveyance.

By a writing, executed by all the beneficiaries and the complainant, the trust upon which the complainant held the property was declared to be

“that the party of the first part [the complainant] will take title to said premises for the parties of the second part [the creditors] ; he to complete said buildings and dispose of them at the best possible price and to pay all amounts and claims then due, and shall also pay all expenses in connection with this agreement.”

The writing also provided that the creditors would refrain from all legal proceedings to enforce their claims; that they would aid and assist v complainant to complete the buildings; that complainant would make payments as the work progressed, except on account, of debts then due, which were waived until after the disposition of the buildings, and that complainant would keep a separate and detailed account of all transactions in connection with the trust.

The bill further avers that in order to collect the money due from the mortgagees, being building and loan associations, it was necessary to advance out of his own funds the dues required; that the money from the mortgages was insufficient to complete the buildings, and complainant paid from his own funds large sums of money necessary for that purpose, and that the creditors as parties to the agreement have a beneficial interest in the property, and that he is entitled to be indemnified by them to the extent to which it may be decreed he is entitled.

The bill further avers that complainant, since the completion of the buildings, has endeavored, but unsuccessfully, because of the condition of the real estate market, to convert the property into cash. The prayer of the bill, as amended, upon which the order appealed from is based, is that an account be taken of his disbursements; that defendants as beneficiaries be decreed to pay the same, and in default that they be foreclosed of all equity of redemption, and that the premises be sold by order of the court, and out of the proceeds complainant be paid his advancements and a reasonable sum for his services as trustee. Two of the creditors moved to strike out the amended bill upon the ground that it fails to disclose any equity; that it does not show that complainant has any such lien on the land as to give the court jurisdiction to take an account, and that complainant has a complete remedy at law. This motion was refused and defendants appeal.

It is first argued, in support of this appeal, that the complainant has no lien because he is in possession of the property against which he asserts the right to a lien. That is, that a trustee holding the title to real estate in trust for others can in no case have a lien on the land to repay himself disbursements made in furtherance of the trust, according to its expressed terms, unless he is out of possession of the land. The authorities cited in support of appellant's proposition are not applicable to cases where, by the terms of the trust, the trustee is to remain in possession for the purpose of executing the trust. He has the right to retain possession until his legal disbursements are refunded, either by the beneficiaries or from the rents, or until satisfied as the result of equitable proceedings.

Where a trustee properly advances money for which he is entitled to reimbursement, he has a lien as security for the claim “either upon the corpus of the trust property, or upon the income, as the case may be.” Pom. Eq. Jur. § 1085. The authorities for this proposition are so numerous that it is not necessary to cite them. In the present case, the bill of complaint shows that the trustee was authorized to advance the money for the completion of the buildings, under his agreement with the beneficiaries, and, if so, he is entitled to have it refunded and as security therefor to a lien on the trust property.

The next point is, that complainant is not entitled to a decree for the sale of the land, because he has the power, under the trust agreement, to make sale without the aid of a court of equity. We do not agree with this, for a court of equity has the special oversight of the administration of trusts, and, under the circumstances set out in his hill, the complainant is entitled to have the court take an account of his disbursements and adjudge the amount and extent of his lien against the trust property. He cannot determine the correctness of the account he agreed to keep, nor with safety to himself sell the property to make the amount he may fix. He avers that he is not able to secure a purchaser, which we must assume means subject to the mortgages which are prior liens, at a price sufficient to meet his advances and the sums due the contractors, the enforcement of which were stayed by agreement until after the disposition of the buildings. His power, under the declaration of trust, is to “dispose of them at the best possible price and to pay all amounts and claims then due.” This requires him, in case he makes a sale, to pay all who were creditors when he assumed the trust, and he avers that he cannot make a sale for a price which will so far extend as to cover all these debts, and if he made any other sale might render himself liable for any deficiency.

It is urged that the court cannot, order a sale because it would amount to a destruction of the trust, which was the situation in Darke v. Williamson, 25 Beav. 622. But that rule is only applied where there is a continuing trust. In the Darke Case, the property had been conveyed to trustees, in 1723, for a Baptist meeting-house, and in making repairs, in 1822, the trustees had incurred a debt which some of the trustees paid, and a bill was filed praying that the debt paid by the trustees be declared to be a lien on the premises, and a decree for foreclosure and sale. The court held that a trustee was entitled to be paid any expenses properly incurred in execution of the trust, but that, in the case under consideration, a sale would work a complete destruction of the trust, and therefore refused a sale, but held that if the owners attempted to sell the property, the holder of the lien should have notice, and if an end was put to the trust, the lien would be enforceable, and, in the meantime, the creditor was entitled to the possession of the title deeds. In the present ease, no1 destruction of the trust can in that sense be said to result from the sale of the property, for the trust by its terms is at an end, except the realization and distribution of the funds, to accomplish which the property must be converted into money. It is not a destruction of the trust, but in execution of it. In rePumfrey, 22 Ch. Div. 255, the trust was a marriage settlement in which Walter Sandell Mappin deposited with trustees a considerable sum upon trust to pay to his intended wife during life the income, and at her death to Mappin during his life, and upon failure of the trust for Mappin, then upon trust for the children of the wife and other persons named. The deed authorized the trustees, upon his or her request, to invest in real estate. Such request was made, and, the trust fund not being sufficient, Mappin agreed to furnish the deficiency, which he failed to do. The trustees borrowed the money, completed the purchase and deposited the deed by way of mortgage. The lender brought suit, claiming he had a lien on the land prior to the trusts contained in the settlement and the right to recover by foreclosure. The court held that the creditor was entitled to whatever right to indemnity the trustee had for the money he had advanced, treating the creditor as an assignee of that right. It was urged that the trustee could not enforce his lien until the trust for the sale of the purchased estate should again arise, citing Darke v. Williamson. But the court held the argument unsound, saying: “If the .trustee has a right to be indemnified out of the trust estate, there is no reason why he should wait for his money until the trust estate has been turned again into money under the trust.” Au account was ordered, and the life estate of Mappin, who had agreed to advance the money, was impounded, with liberty to plaintiffs to “apply to realize the lien against the trust estate; but, upon that application, it must be proved to the satisfaction of the court” that Mappin “cannot pay and that every reasonable means of making him pay have been exhausted.”

The court also held that if the trustee had a lien he had ¡a right to come into equity to enforce it, and that the lien of the trustee was subject to the trust fund, but it was not considered a destruction of the trust to allow the trustee to enforce his lien against the trust estate. In the case we are considering, the trust estate is the land, subject to certain mortgages which are a prior lien to that of the trustee, the agreed purpose of the trust was the finishing of the buildings for the benefit of creditors, and the trustee having advanced his money in executing the trust, thereby increasing the estate to that extent, has a lien on it next in priority to the mortgages. There was no completed trust estate until made so by the funds of the trustee, the very object of the trust agreement was the creation of an estate by the funds of the complainant, and it would be inequitable to say that Hie creditor’s debts, the security for which had been increased by expenditures made by the trustee at their request, were entitled to priority over the lien of the trustee. There being no trust estate entitled to preservation against the lien of the complainant, he is entitled to enforce it. This right to priority is recognized in Perrine v. Newell, 49 N. J. Eq. 55, where it is held that mortgages, given by a cestui que trust on his beneficial interest, are subject to the trustee’s right to repayment of his advances. In re Exhall Coal Co., 35 Beav. 449, where the trustee declared that he held a coal mine in trust for the company, and claimed a lien for proper advances of money, it was held that the trustee was entitled to indemnity prior to any charge for payment of debentures issued by the cestui que trust. It seems to be settled that where a trustee makes proper advances in executing a trust, he has a lien on the trust estate for repayment,- and. that such lien is prior to any charges created by the beneficiariés against the estate. In the ease undeT review, the trust was undertaken at the request of the cestui que trust for their benefit, and the advances were made in accordance with the trust declared, and practically constitutes tire trust estate. In such ease the trustee is entitled to a lien upon the corpus of the estate therefor, and to enforce it in equity by a decree for the sale of the property in order to wind up the trust as required by its terms. If the proceeds of the sale should produce a surplus beyond that neces-sary to pay the trustee and the debts due the cestui que trust, this profit will have to be disposed of. It does, not belong to- the trustee, for he can make no profit ‘out of the trust estate, and the trust agreement makes no provision for such a contingency, and, as a court of equity has supervision over the execution of trusts, at least where the power of the trustee to dispose of the results is doubtful, we have no doubt of the jurisdiction of equity to determine the nature and extent of a trustee’s lien, and for that purpose to take an account of his advances; to fix the order of its priority, and to decree the sale of the trust property upon equitable terms, preserving so much of the trust estate as may be entitled to priority to the lien, and the disposition of the surplus if the proceeds of the sale exceed the express requirements of the trust.

It is further urged that by the- terms of the agreed trust the 'trustee was not authorized to exceed the amount then to be advanced on account of the mortgages. This is based upon the recitals preceding the declaration of the trust, but assuming them to be a. part of the agreement, it is not so clear that the defendants are right as to warrant a dismissal of the bill. It is first recited that there is in the hands of the two building and loan associations $8,900, and in the.next paragraph “it would require ábout” the sum of $5,800 to complete the buildings. Whether it would require the latter sum in addition to money to come from the mortgages, is not free from doubt, but whether so or not, it was subsequently agreed that the trustee should complete the buildings and pay all amounts then due. If the estimated sum was not sufficient, it was intended that the buildings should be completed, and that was the express terms of the trust. If the buildings were to be completed, someone must furnish the funds, and it was to the interest of the cestui que trust to have them completed, and no objection was made to it. We must assume, on the motion to strike out, that the money was properly expended — that is, that there was no waste, whatever the fact may appear to be on final hearing.

The last point argued is, that complainant has a remedy at law by proceeding against the defendants for his advancements. It is not necessary to decide cn this motion whether complainant has a legal claim against the defendants, for he has a lien on the property which he is not required to give up — he has a right to first exhaust his lieñ, and then, if there be a deficiency, to a decree against the defendants, if they are liable, for the unpaid balance.

The order appealed from will be affirmed, with costs.

Parker, J.

(concurring).

I agree that the court of chancery properly refused to dismiss the bill, but put my vote for affirmance upon the grounds that complainant as a trustee was entitled to a lien upon the trust estate for moneys properly advanced by him in the execution of his trust; and was entitled to an account under the supervision of a court of equity to have the amount of those advances ascertained and to have them declared a lien on the property. This is all that it is necessary to decide in order to uphold the bill as against a general demurrer or a motion to strike it out in toto.

For affirmance — The Chiee-Jtjstioe, Garrison, Swayze, Trenchaed, Parker, Bergen, Minturn, Kalisch, Black, Terhune, Heppenheimer, Williams, Taylor — 13.

For reversal — None.