text:
    Waters B. Parret, administrator of Catherine Craig, v. James Craig, executor of John Young.
    [Filed September 20th, 1897.]
    1. In an action by the administrator of C. against the executor of Y., to recover money of C. deposited by Y., during a period of nine years, in a savings institution, it appeared that Y., who was C.’s nephew, for several years managed her business ; that she made two wills, in which she gave him substantially all her property; that a few days before her death she made a third will in favor of another nephew; that Y. contested the last will, and that on such contest he, as a witness, explicitly admitted that he had appropriated to his own use the money so deposited, except as to two items, and justified his acts by declaring that the money had been given to him before it was deposited.— Held, that complainant, who relied on Y.’s evidence in the will contest to prove the appropriation, was not bound to accept his evidence as to gift, where it appeared that the deposit account was with him as “trustee for C.,” while he had another account of his own in the same institution; that on receiving $200 of the money deposited, he gave C. a paper, reciting, “Eec’d of 0., to deposit in savings bank, $200; ” and that on the same day that he drew from the account $1,000, he gave C. a mortgage for the same amount, which was afterwards canceled.
    2. A mortgage given by a nephew to his aunt, which was unaccompanied by any bond, but which itself contained a covenant to pay the money in five years, was afterwards delivered by her to him with intent to make him a gift of it, and of the money which it secured. Before delivering it, she made in his presence an endorsement thereon that she had received “principal and interest to date,” and directing the register to “cancel this of record.” — Held, that the gift of the money secured was effectual.

      Mr. Craig A. Marsh, for the complainant.

      Mr. Charles H. Hartshorne, for the defendant.
   Stevens, V. C.

This suit is brought by the administrator of Catherine Craig against the executor of John Young, under the following circumstances : Catherine Craig died in 1893, at the age of eighty-one. She had been a widow for about twelve years before her death, and had no children of her own. John Young, her nephew, died in the year 1895. He is shown by the evidence to have been her confidential adviser for nine or ten years prior to her decease, and to have had to a considerable extent the management of her business affairs. On December 15th, 1883, he opened an account in the Provident Institution for Savings, of Jersey City, entitled “Provident Institution for Savings in account with John A. Young, trustee for Catherine Craig.” Between this day and April 29th, 1892, he made twenty-nine deposits, aggregating, without interest, $3,222.76. During this same period he drew out on various occasions nearly all the money thus deposited, with the interest.

The bill charges a misappropriation of these moneys by Young to his own use, and- prays an account and a decree for payment. It is admitted that with the exception of two items, one of $76.73 to take up a protested check, and one of $100 given to Morgan Turton, the moneys were used by Young for his own purposes. The defendant’s insistment is that Young had a right to use them because they were given to him by Mrs. Craig. The proof of the alleged gift rests on Young’s declarations alone. Mrs. Craig had made two wills, one in 1885 and the other in 1890. The first of these wills gave her entire estate, and the second her entire estate except her wardrobe, to Young. Three, or four days before her death she made a third will in favor of another nephew, Morgan Turton, and his wife, with whom she was then living. The validity of the third will was contested by Young in the orphans court of Union county. He was called as a witness and cross-examined in reference to the account in the savings bank. He explicitly admitted that he had, with the exceptions I have mentioned, appropriated the money to his own use; he justified the appropriation by declaring that the money had been given to him. The contention of defendant’s counsel was that as complainant relied upon Young’s evidence for proof of misappropriation, he was bound to accept all of it as true and that on the whole evidence it appeared that Young had taken the money only because it was given to him. While I think that the defendant was entitled to have the whole of Young’s evidence read, I do not think that the court is bound to give equal credit to every part of it. There cannot be the slightest doubt that Young used the money for his own purposes. He tells us how he used it. But there is on Young’s own statement, and on the undisputed and undoubted facts, a very serious question as to whether Mrs. Craig made him a gift of it. It will be borne in mind that the bank account stood in the name of Young as trustee for Catherine Craig. Now, Young’s statement was, not that Mrs. Craig had authorized him after he had deposited the money to draw it and spend it upon himself or upon his property, but that she had given it to him before he deposited it. He testified as follows:

“Q. Although you entered your account in that hank in her name, you still say that the money was given to you out and out and that you did not hold it as trustee, do you ?
“A. Yes, I considered that money was a gift to me.
“Q. Did you deposit anything in this account except the presents of money from Mrs. Craig ?
“A. Money and checks, that is all.
“Q. Well, they were all presents from her ?
“A. Yes, sir.”

It is certainly strange that if Young regarded this money as his own, he should have opened the account as a trustee account and continued it so for nine years. It is strange, too, that he should have opened it in this way, when he had in the same bank, as he admits, another account of his own. It is still stranger that he should, as he says he did, have opened it in this form after consultation with counsel. The fourth entry in the bank passbook is an item of $200, under date of April 8th, 1884. On April 6th, 1884, there appears in a little diary belonging to Mrs. Craig the following receipt, which Young admits he gave her: “Apr. 6, 1884. Rec’d of Mrs. Adam Craig, to deposit in savings bank, $200. John A. Young.” The $200 credited in the pass-book, Young admits to be the same as that which he receipted for. The language of this receipt is not the language of gift. Again, when first examined about the form of the account, Young explained it by saying that he was Mrs. Craig’s banker. On re-examination on a subsequent day, he was asked,

“Q. Wliat did you mean when you said you were her banker?
“A. Well, I meant that she gave me money and I had a separate account . of it in the bank, knowing how much she wanted to give me.
* * x * -x- -x- * x x -x-
“Q. Why did you want to know how much she gave you ?
‘A. Merely as a record, that is all.
“Q. What did you want of a record ?
‘A. Well, I can’t tell exactly why I wanted a record — curiosity.”

There is another still more significant fact. On April 9th, 1887, he drew out of this account $1,000. On the same day he executed to his aunt a mortgage for that amount. The mortgage was recorded, and subsequently, on a certificate of his aunt authorizing its cancellation, canceled. This action on his part seems to me to be utterly irreconcilable with Young’s statement that the money in the bank was his own, or that he then so regarded it. I have no doubt, on the whole evidence, that the account itself correctly states- his position. As to this fund, he was trustee for Catherine Craig, and not absolute owner. In foro oonsdentice, he no doubt sought to justify his conduct in taking it on the ground that his aunt’s income was ample for her support, and that he was her sole legatee.

On the part of the defendant,'Maggie Cheever was called as a witness to prove the gift. But her testimony, taken altogether, strongly indicates that Mrs. Craig’s intention was not to make a gift of this money inter vivos, but to give it to Young by her will. According to this witness, Mrs. Craig, within a year before she died, appears to have thought that the money (except that which had been secured by mortgage) was in the bank. Yearly all of it had, in fact, been drawn out.

The remaining question relates to the $1,000 secured by mortgage. This money, as I have said, was drawn out on April 9th, 1887. The mortgage given to secure it was dated on that day, and was acknowledged on the 14th and recorded on the 15th of the same month. On it is endorsed the following: “ Dunellen, Sept. 29, 1888. Received of John A. Young principal and interest to date. Catherine Craig. Register will please cancel this of record Catherine Craig.” It is not denied that the signatures to this receipt and request are Mrs. Craig’s. Prima facie, they indicate payment of the amount secured. But it was admitted by Young in his evidence before the orphans court that he never paid anything on this mortgage his statement being that his aunt’s intention in signing the endorsements was to cancel the debt. The evidence shows, I think, that Mrs. Young intended to make a present of this mortgage to her nephew. She told Maggie Cheever that she had given him $1,000 on a mortgage, and that she had canceled it. She told James Craig the same thing. She appears to have had the strongest affection for him, and she does not appear to have needed the money herself. She had, moreover, given all her money to him by her will. John, on the other hand, may have been at that time partially disabled by the loss of a finger, and, not working steadily at his trade of machinist, may have found it hard to pay back what he had borrowed. Nothing was more likely, then, than that Mrs. Craig should have been willing and perhaps, as Young says, anxious to cancel the debt. That she intended to do it is beyond all question. Her endorsements are proof of that. The matter then comes down to this, Did she do it effectually? I think she did. On this branch of the case John’s testimony is supported by the written documents and by the evidence of witnesses. He said, that $1,000 I took out; I gave my aunt a mortgage for that, * * * which was canceled by my aunt a year after-wards.” He is then (in the will case) called upon to procure the mortgage, and does so. He did not say, in so many words, that after signing the direction to cancel she redelivered it to him, but he said that he was present when she signed the direction to cancel, and it is a matter of fair inference that he received it from her at that time. He procured it to be canceled of record three years before her death. In Smith v. Burnet, 8 Stew. Eq. 323, Mr. Justice Reed, after stating that declarations of the deceased with respect to the alleged gift would, standing alone, be of little or no force, says that where there is other evidence of a transferenee of the chattel from the possession of the alleged donor to the donee, the evidence of donor’s declarations becomes relevant and important in fixing the meaning of the act transferring the possession. The declarations of Mrs. Craig, to which I have above referred as having been made to James Craig and Maggie Cheever, tend to prove that her object in thus canceling the mortgage was to make John Young a present of it and of the money which it secured. The cancellation itself, coupled with her acknowledgment of the receipt of the money, is evidence in the same direction furnished by Mrs. Craig herself. There was no separate bond given, but the mortgage itself contained an express covenant to pay the money in five years, so that the debt thus created was made a specialty debt and the mortgage thus given constituted the only instrument on which a recovery could be had. This instrument was given up. In the language of Sir Knight Bruce, vice-chancellor, in Moore v. Darton, 4 De G. & S. 517, the delivery of this instrument was not the delivery of the mere evidence of the debt, but it was the delivery of that without which .the debt would not have been a specialty.” I think, therefore, that when Mrs. Craig directed the cancellation of this mortgage deed and handed it to Mr. Young with intent to make him a gift of it and of the money which it secured, she effectually canceled the debt.

The complainant stands in this position : If Young’s evidence on this subject (in the will case) is altogether excluded, then the receipt on the mortgage is prima fade evidence of payment, and there is no evidence to the contrary. If the evidence is received, then it appears that the receipt was signed in furtherance of Mrs. Craig’s intent to make him a gift of the security. In either alternative, the defendant, as Young’s executor, is discharged from liability to account for the money.


source: Caselaw Access Project

author: Stevens, V. C.

license: Public Domain

text:
    Marie Kuhnen v. Lida E. Parker et al.
    [Filed November 1st, 1897.]
    If the mortgagee foreclose a purchase-money mortgage against the mortgagor, and the mortgagor shows that the covenant against encumbrances has been broken in such manner as to give him a claim to substantial damages, he may reduce the mortgagee’s demand to the extent of those damages.

      Mr. Craig A. Marsh, for the complainant.

      Mr. Winfield S. Angleman, for the defendants.
   Stevens, V. C.

The complainant filed his bill to foreclose a mortgage. The defendants answered, averring that they gave it to complainant to secure part of the price of farm land conveyed to them by deed containing covenants of warranty and against encumbrances ; that such land was, at the time of the making of the deed, encumbered by rights of way created by recorded instruments which gave the grantee named therein the right to construct a line of iron pipe for the transportation of petroleum, with telegraph and other facilities, over and across the land; and that this pipe line had actually been laid, and that the grantee of the easement was in the full enjoyment thereof at the time of the conveyance to defendants. It is further averred that the complainant knew of this use of the land at the time of the conveyance and concealed it from the defendants, who did not know of it for several weeks afterwards and would not have purchased had they known of it. An application was made under the rule to strike from the answer all the averments relating to this alleged breach of complainant’s covenants. It must be dealt with in the same manner as if there had been exceptions and a reference to a master for impertinence.

There are numerous cases to be found in our reports, but none of them are identical with the case in hand. It may therefore be desirable to refer to and ascertain the principle on which they are based.

Where property has been conveyed by deed containing covenants of warranty and against encumbrances, and a mortgage is given by the grantee to the grantor to secure the whole or a part of the purchase-money, it has been decided that on a foreclosure the mortgagor is entitled to a deduction for prior mortgages (Shannon v. Marselis, Sax. 413; Van Riper v. Williams, 1 Gr. Ch. 408; Woodruff v. Depue, 1 McCart. 169; Sliger v. Bacon, 2 Stew. Eq. 442), for prior taxes (Union National Bank of Rahway v. Pinner, 10 C. E. Gr. 495), for prior assessments (White v. Stretch, 7 C. E. Gr. 76), and for prior judgments (Dayton v. Dusenbury, 10 C. E. Gr. 110).

It has also been decided that where there has been an eviction by title paramount, the court will compel the mortgagee to submit in some form to an ascertainment of the damage arising from the existing breach of covenant, and will reduce to that extent the amount of his claim. Coster v. Monroe Manufacturing Co., 1 Gr. Ch. 467; Jaques v. Esler, 3 Gr. Ch. 461. So it will reduce the amount of his claim if the vendee has been defrauded (O’Brien v. Hulfish, 7 C. E. Gr. 471), or has by mistake obtained less land than he bargained for {Couse v. Boyles, 3 Gr. Ch. £13). Again, it will arrest the foreclosure pending an action brought to try the title of an adverse claimant, but it will not arrest the foreclosure suit or direct an inquiry on a mere allegation of such title, there being no action pending to enforce it. Van Waggoner v. McEwen, 1 Gr. 412; Glenn v. Whipple, 1 Beas. 50; Price’s Executors v. Lawton, 12 C. E. Gr. 325, 1 Stew. Eq. 274; Hile v. Davison, 5 C. E. Gr. 228.

An easement is an encumbrance within the meaning of the covenant against encumbrances. Rawle Cov. Tit. (1st ed.) 115. As the easement set up in the answer existed at the time of the conveyance by complainant to defendants, the covenant in defendants’ deed was broken as soon as made, and the breach was of such a nature as to give rise to substantial damages. The question in dispute is, therefore, whether, under the principle to be extracted from the above-mentioned decisions, the defendants are entitled in this suit to have their damages ascertained and deducted from the amount of the mortgage;

Now what is the principle? Complainant’s counsel contends that it is that the court will allow the offset only where the amount of the lien or encumbrance is certain, or, as he says, can be rendered certain, and not where the damages are unliquidated. This cannot be so, for it is opposed to all those cases which, like Coster v. Monroe Manufacturing Co., supra, hold that where there is an eviction by title paramount, the court will compel the mortgagee to submit in some form to. an ascertainment of the damages. It is opposed to cases like Couse v. Boyles, supra, where there was a mistake in estimating the number of acres, and to cases like O’Brien v. Hulfish, supra, where there was a claim of fraud. In this latter case Chief-Justice Beasley, speaking for the court of appeals, says: “ I think there is no doubt that where a sale of real property is effected by deceit and a mortgage given for the whole or a part of the purchase-money, relief in equity will be given to the party defrauded in a suit on the mortgage, whenever such course is necessary to reach a just result.”

These cases seem to me to demonstrate that w'here a purchase-money mortgage is being foreclosed, the defendant is not debarred from ’ claiming a reduction merely because his claim is, at the time he makes it, unliquidated.

Then counsel suggests a distinction between liens which may be wiped out by tendering a definite sum of money and outstanding titles or encumbrances which in their nature are permanent and which, he says, it is not in the power of the mortgagee to wipe out by simply tendering the amount due. A rule based on such a distinction is equally irreconcilable with the cases to which I have just referred.

Why does the court allow a reduction or offset in foreclosure cases ? One reason is to prevent circuity of action. “ There can be no good reason assigned,” says Chancellor Vroom, in Shannon v. Marselis, supra, “ why there should be this circuity, but a very good one why there should not, which is that the money might be lost to Carrick [the vendee in that case] altogether, he having no security but the covenant.”

Another reason is that the mortgagee is, in these cases, equitably entitled to a part only of the amount appearing to be due on the face of his security.

I think that the true principle of decision goes at least to this extent: If the mortgagee foreclose a purchase-money mortgage against the mortgagor, and the mortgagor shows that the covenant against encumbrances has been broken in such manner as to give him a claim to substantial damages, he may reduce the mortgagee’s demand to the extent of those damages.

The case of Glenn v. Whipple, 1 Beas. 50, was relied upon by complainant’s counsel. In that case the defendant set up an outstanding dower right in the widow of the vendor-mortgagee, who had conveyed without his wife joining. Chancellor Williamson put his decision, as I understand it, upon the ground that there had been no eviction by title paramount and no action brought by the widow, and that consequently there was no breach of the covenant of warranty. It is well known that the covenant against encumbrances, unlike the covenant of warranty, is broken as soon as made. If the existence of an inchoate right of dower, which was all the right the wife had when the conveyance was executed, was a breach of the covenant against encumbrances (and if a breach, it would only have given rise to a claim for nominal damages, Rawle Cov. Tit. 109, 114), she was not, when the foreclosure suit was instituted, alleged to be claiming that right but the more complete right which vested in her at her husband’s death. This right she had not sought to enforce by action. The decision was therefore strictly in accordance with the previous cases.

Hamill v. Inventors’ Manufacturing Co., 10 Dick. Ch. Rep. 649, stands upon substantially the same ground as Baudendistel v. Zabriskie’s Executors, 5 Dick. Ch. Rep. 453. In both of these cases there was a covenant of warranty but no eviction or action pending. There was no covenant against encumbrances. In the latter case the claim that the deed, in substance, contained such a covenant was denied by the court of appeals. The chief-justice, in stating the rule on this subject, there says: “ When a grantor has stipulated that there are no encumbrances upon the premises conveyed, such covenant, if infringed at all, is violated by the act of conveyance, and it is the established practice of our courts to compel the mortgagee who seeks to foreclose for the purchase-money to submit in some form to an ascertainment of the damage that must necessarily arise from the existing breach of his covenant, and to reduce to that extent the claim pressed by him.”

I think, therefore, that the defendants have set up a defence, and that this defence is the proper subject of answer and not of cross-bill (White v. Stretch, 7 C. E. Gr. 76), unless they intend to rely upon fraud. If they do, a cross-bill or answer by way of cross-bill is necessary. O’Brien v. Hulfish, 7 C. E. Gr. 471.

The application is denied, with costs.


text:
    Charles Frost, receiver, v. Nathan Barnert et al.
    [Filed December 10th, 1897.]
    A corporation, after becoming insolvent, cannot give a mortgage to secure a pre-existing debt, though the creditor have no notice of the insolvency, Corporation act (P. L. of 1896, p. 298 § 64) prohibiting a transfer by corporations, after becoming insolvent, of any of their estate or effects, except to bona fide purchasers for valuable consideration.

      Mr. Eugene Stevenson, for the complainant.

      Mr. George S. Hilton, for the defendant Barnert.
   Stevens, V. C.

On May 13th, 1896, Samro Takaki and others, creditors, filed a petition to have the Equitable Silk Company declared insolvent. On the same day an order was made directing the company to show cause why it should not be decreed to be insolvent. On May 21st a receiver was appointed. This receiver now files his bill against Barnert, praying, inter alia, that a certain chattel mortgage bearing date May 11th, and acknowledged May 13th, 1896, given by the company to Barnert to secure the sum of $875.82, may be declared null and void. .The ground upon which the receiver bases his prayer for relief is, that at the time the mortgage was given the company was insolvent to the knowledge of Barnert, and that it was given in contemplation of its insolvency, to secure a pre-existing debt. The answer denies knowledge or notice of insolvency, but admits that all but $250 of the money secured was pre-existing indebtedness. These averments of the answer correspond with the proofs, which also show that the mortgage was made without actual fraud, and that it was recorded before the petition to have the company declared insolvent was filed. The company was, however, insolvent when it was given.

The question presented by the pleadings and proofs is this: Can a corporation organized under the General Corporation act, after becoming insolvent, execute a mortgage to a creditor who is not a director or officer of the company, to secure a pre-existing debt, such creditor having no notice of the insolvency ?

The mortgage in question was given after the re-enactment in 1895 (P. L. of 1895 p. 166; P. L. of 1896 p. 298 § 64,) of section 2 of “An act to prevent frauds by incorporated companies,” found in the Revision of 1846. Section 2 of that act, which prevents corporations from selling, conveying, assigning or transferring any of their estate or effects, &c., after they have become insolvent or in contemplation of insolvency, except to bona fide purchasers for valuable consideration, was construed in Holcomb’s Executors v. Managers, &c., 1 Stock. 457, in Wells v. Rubber Co., 4 C. E. Gr. 402, and in other cases cited and approved in Wilkinson v. Bauerle, 14 Stew. Eq. 635. On the construction put upon the act in those cases the mortgage in question cannot stand, except as security for the $250 paid at the time it was given.

I was referred by defendants’ counsel to Knowles Loom Works v. Vacher, 28 Vr. 490. It is plain that that case has no application to the case in hand. It was there held that a chattel mortgage given to secure a pre-existing debt is entitled to. priority over a prior unrecorded contract of sale of which the mortgagee had no notice. The decision was hased upon the principle that one who, without notice, takes a chattel mortgage to secure an antecedent indebtedness is a mortgagee in good faith within the meaning of the Chattel Mortgage act of 1889, though he may not be a mortgagee for value ; and that as the act does not in terms require him to be a mortgagee for value, the cases which define the meaning of purchaser in good faith for value are not applicable. Besides it was said that public policy, as asserted in the extension of the registry laws, requires that the public records shall show the ownership of personal property, and that a construction favorable to that end ought to be given. In the statute under consideration neither of the grounds upon, which the decision was placed exists. The act of 1895, incorporated as section 64 of the Corporation act of 1896, avoids all transfers by way of preference, except those made to a bona fide purchaser for a valuable consideration. In addition to this-it has been repeatedly held that the act to prevent frauds by incorporated companies is, in the language of Chief-Justice Green in Receivers v. Paterson Gaslight Co., 3 Zab. 283, “ in all its essential elements a bankrupt law,” and that to allow preferences is to violate its spirit and a general tendency, and to defeat its primary object. Receivers v. Paterson Savings Bank, 2 Stock. 19. Then again the act under consideration had through a long series of years received a settled construction. It must be assumed that when the legislature re-enacted the old provision in the old words they were satisfied with that construction and meant that it should continue.


author: Grey, V. C.

text:
    Catherine E. Turner v. William Hill et al.
    [Filed January 3d, 1898.]
    1. Where no definite direction is given by a debtor to apply a balance of account in the hands of a creditor to any one or more of several debts due the creditor, the latter may make the application.
    2. In making it he may not, without the debtor’s direction, appropriate it to the payment of a debt of his debtor which he does not hold.
    3. If the creditor applies it generally, the court will recognize his appropriation so far as he had power to make it, and will apportion it ratably towards the payment of all the debts of the debtor which the creditor held, to which he applied it generally, where such apportionment accords with equitable principles.
    4. When a subsequent lien creditor or holder of lands claims that a credit has been applied in satisfaction of a precedent lien, the burden is upon the party who alleges the application to prove it.
    On bill to foreclose.
    The bill is filed by the complainant to foreclose six mortgages upon a number of tracts of land in Warren county. The defendants are William Hill, the owner of the equity of redemption, and his wife, several judgment creditors of Hill and Thomas P. Frome, who is both a judgment creditor of Hill and a grantee from him of one of the tracts described in several of the mortgages. Eróme is the only litigating defendant, and the questions presented arise in the ascertainment of his equities as judgment creditor of Hill and as grantee of the one tract.
    The six mortgages held by the complainant were all originally made by the defendant William Hill, and were given for the principal amounts and recorded at the dates following:
    One to William Trimmer for $1,000, recorded April 9th, 1877.

      One to Isaac Dill for $1,000, recorded September 11th, 1879.
    One to First National Bank of Washington for $2,385, recorded April 16th, 1890.
    One to Hackettstown National Bank for $2,500, recorded April 29th, 1890.
    Another to Hackettstown National Bank for the same debt, recorded August 18th, 1890.
    And the last, called an additional and collateral mortgage, to the complainant, Catherine E. Turner, dated and recorded May 18th, 1894, for $5,000.
    The mortgage recorded April 29th, 1890, to Hackettstown National Bank, and the last mortgage to the complainant, recorded May 18th, 1894, are the only mortgages which assume-to be liens upon tract No. 14 in the bill of complaint, which is an undivided one-half part of thirty-seven and one-half acres of land.
    This undivided interest the complainant conveyed in fee to-the defendant Thomas P. Frome, by deed dated January 6th, 1894, recorded May 16th, 1894. The effect of this conveyance-was to pass the title to this tract, No. 14, out of the mortgagor,. Hill, before he gave the mortgage of May 18th, 1894, to the complainant, so that Hill’s mortgage of that date to the complainant is no lien on that tract.
    All of the above-named mortgages, except the first (Trimmer’s) and the last, which was given to the complainant, had in-May, 1894, come to be owned by one John Karr, who had purchased them from various holders. While he held these mortgages lie had received possession of the mortgaged premises, and had permitted the mortgagor to stay on the place under lease-from him, had stocked and equipped the farm, and had received the profits which he had in great part expended for the benefit of the mortgagor, in rent and other expenses, resulting, however, in leaving a balance in his hands of $1,287.83. In May, 1894, Karr being still the holder of the mortgages, except the-Trimmer mortgage, desired to raise money upon them, and applied to Judge Morrow for $5,000, seeking to effect a sale of the Trimmer first mortgage, and all the other subsequent mortgages which Karr then held. An arrangement was made by which the complainant, through Judge Morrow, advanced the $5,000. The Trimmer mortgage, and the four others held by Karr, were assigned absolutely to her with the bonds and notes the payment of which 'they secured. It was noticed that the wife of the mortgagor, Hill, had not signed some of the later mortgages, and to bind her dower, and as an additional security, a new mortgage upon all the several tracts described in all the previous mortgages was executed and delivered by Hill and his wife to the complainant.
    The mortgages all being due, the complainant filed her bill to foreclose them, making the mortgagor, Hill, and his wife, and several judgment creditors, and Frome in respect to his deed for tract No. 14, and his judgment against Hill, defendants. No answers have been filed by any defendant except Frome.

      Mr. Joseph M. Roseberry, for the complainant.

      Mr. L. De Witt Taylor, for the defendant Frome.

      Mr. William H. Morrow, for the defendant Amelia Clayton, and also pro se.

   Grey, V. C.

A computation of the amounts due on the several mortgages is necessary to an understanding of the action of the parties in the premises. The testimony shows that at the time of the assignments to the complainant, May 11th, 1894, there was due on the mortgage of Hill to Trimmer—

For principal and interest.................................... §1,061 39
On the Hill to Dill mortgage (which was pledged to Trimmer by Karr) the consideration of the assignment to the complainant on May 11th, 1894, is stated to be..................................................... 1,296 26
On the Washington Bank mortgage there was due on the notes it secured on July 2d, 1891 (the date when this mortgage and notes were assigned to Karr), after crediting all payments made by Hill.... §2,123 65
There is no proof of any payments to Karr on these notes or mortgages. I therefore add interest on the principal of the notes from July 2d, 1891, to May 18th, 1894, the time of the transfer to complainant. The aggregate principal sum of the note is $2,077.24, and the interest from July 2d, 1891, to May 18th 1894, is........................................... $358 46
Making amount of principal and interest due on Washington Bank mortgage, &c., on May 18th, 1894 (date of assignment to complainant), to be................ $2,482 11
The Iiackettstown Bank had two mortgages, both securing the same set of notes ; on these there was due for principal on the notes at the time Karr purchased the securities, July 9th, 1891..... $1,224 15
Interest then due .................. $26 52
Interest from July 9th, 1891, to date of assignment to complainant, May 18th, 1894....... 209 88 -- 236 40
Amount due on Haekettstown Bank mortgage on May 18th, 1894 (date of assignment to complainant), if no allowance be made by applying the credit in Mr. Karr’s hands due the mortgagor.......... 1,460 53
Total amount due on all mortgages, not applying the credits due Hill, in Karr’s hands....................... $6,300 29

For the assignments of these mortgages which were made on May 11th and May 18th, 1894, to the complainant, the sum of $5,000 was paid by her. Mr. Karr made an absolute transfer of them to the complainant. He gave no obligation of his own which these mortgages, &c., were pledged to secure. He owes nothing to the complainant, and she has become, by her purchase, the absolute owner of all that is due on the securities. When Karr sought to raise the $5,000 on the mortgages which he held, it appeared that- the mortgagor’s wife had not signed the later mortgages, and he was obliged to secure an additional mortgage to be made to the complainant on all the tracts, in which the wife joined, in order to secure the money. This mortgage is the complainant’s last mortgage, and, Judge Morrow testifies, was given as a collateral mortgage.

Judge Morrow disbursed the fund, and testifies that he paid—

To Trimmer, for the Hill-Trimmer mortgage........... $1,061 39
To Trimmer for Karr, for the Dill mortgage ........ 1,296 26
To Karr, for the Washington Bank and Hackettstown Bank mortgages, the following cheeks were given by Judge Morrow :
May 18th, 1894.................................... $1,200 00
June 2d, 1894..................................... 750 00
August 30th, 1894................................ 578 63
-- 2,528 63
Making the total expenditure by Morrow for the purchase of all the mortgages to be.......................... $4,885 28

In addition to the above payments Judge Morrow states that out of the complainant’s advance of $5,000 he was paid for his services in conducting the business, and that he also paid some arrearages of interest on an outside mortgage with Mr. Karr’s assent.

The testimony is somewhat confused as to these detailed items of the subsequent disbursement, but it is quite clear that the complainant’s money was all paid either to Mr. Karr himself or by his direction to others, and that she became by the assignments the owner of all the mortgages which she now seeks to foreclose.

The defendant insists that the Hackettstown Bank mortgage, dated April 28th, 1890, which is the only one held by complainant which is a lien upon the undivided one-half of the thirty-seven and one-half acre tract (No. 14 in the bill), has been actually paid by the application of the credit in- the hands of Mr. Karr (while the holder of that mortgage), in favor of William Hill, the mortgagor; and that if such a credit was. not actually made, then that in equity it ought to be made, because the defendant claims it was directed -to be made by the mortgagor, or if not so directed then that the credit in the hands of the holder of the mortgage, having arisen from the issues and profits of the mortgaged premises, it should be made by the court.

The proof shows that this credit arose as follows : The mortgagor, Hill, had accepted a lease of the mortgaged premises-from Mr. Karr. Hill continued to have the actual possession not only of the mortgaged premises, but also of horses, cattle and the stock equipment of the farm, which had been bought by Karr at a chattel mortgage sale, upon an understanding between Hill and Karr that these chattels were to belong to Hill as soon as he had paid for them. Mr. Karr paid the running expenses aud supplies of the farm, interest on some of the mortgages, the expenses of a foreclosure and the purchase of stock,, horses and cattle. He received in actual gross receipts $3,946.27. He did not apply any'of it to the payment of the Hackettstown Bank mortgage which he held. He had a balance of $1,287.83 in his hands, a credit in Hill’s favor that had not been applied when all the mortgages were about to be assigned to the complainant. He swears that while it was a matter of discussion between him and Hill, the mortgagor, as to what mortgage it should be applied on, the Hackettstown Bank mortgage and the Washington Bank mortgage both being mentioned, that Hill spoke as if he wanted it applied on the Hackettstown Bank mortgage, but Karr swears that Hill did not give him (Karr) any direction or order to apply it to any particular mortgage.

The testimony of Mr. Karr on this point was fairly shown by these questions aud answers :

“ Q. Have you any of that money in your hands now ?
“A. No, sir.
“Q. Had you when you assigned the Hackettstown Bank mortgage to Miss Turner?
“A. I had; I had an account with Mr. Hill, debit and credit account of the-whole transaction, and when this account was closed up there was $1,287.83-that should have been endorsed on those mortgages.
“Q. Which mortgages?
“A. That I can’t say; on the whole of them.
“Q. Which mortgage was it to be endorsed upon by Mr. Hill’s agreement or direction ?
“A. There was no definite agreement in regard to that.”

He further states:

“I was to us« that money in any way that I chose for his [Hill’s] benefit.
“Q. Did yon so use it ?
“A. I did.
“Q. How did you use it for his benefit; what did you do with the funds ?
“A. With the §1,287, or with the whole fund?
“Q. No, the §1,287, the rest you say you applied; what did you do with it at any 'time v
“A. These mortgages that I held, amounting to some §5,000, and Trimmer’s together amounted to some §6,300, and I said to Judge Morrow at the time that these assignments were made that there was §1,287.83 that should be applied od some of these mortgages; I did not know on which to apply them.
“Q. What was done with them ?
“A. Judge Morrow said, after that credit is made, does it still leave §5,000’ due on those mortgages ? I told him yes, that is true.”

Karr further testifies that this $1,287.83 credit in favor of Hill was to have been credited on these mortgages as he stated to Morrow, and that the credit was definitely ascertained to be that amount at the time they arranged the settlement in George Morrow’s office.” This was the time the transfers were made to the complainant.

I think it is quite evident that there was no definite instruction by the mortgagor as to the application of this credit. The witness Karr testifies that its application was discussed between himself and the mortgagor, and the Hackettstown Bank mortgage seems to have been favorably considered, but its application to pay the Washington Bank mortgage was also talked over, and at the time when the final transfers were made to the complainant, no direction for appropriation to any particular mortgage had been given by the mortgagor, nor until that time was the actual amount of the credit apparently known to the parties.

Mr. Karr then applied it generally as a credit on the whole sum due on all the mortgages; the ascertainment of the credit and its application appear to have been substantially coincident. Karr treated the mortgages as calling for $6,300 before the credit was applied, and for over $5,000 afterwards, and this very nearly accords with the amounts due on all the mortgages as above shown.

Hill was present in Morrow’s office at the time of the settlement and assignments of the mortgages. He knew he had this credit balance of $1,287.83 in Mr. Karr’s hands; he joined with his wife in making the additional collateral mortgage to the complainant for $5,000, the amount due on all the mortgages after-applying the credit, and it is difficult to believe Hill took so important a part in that settlement, and would have permitted Mr. Karr to apply this credit generally on all the mortgages, if he (Hill) had already directed it to be applied on the Hackettstown Bank debt.

Hill was himself the best witness to the fact that he had directed an appropriation of this credit to be made towards the payment of the Hackettstown Bank mortgage, if he had made any such direction. He was not called for the defendant. The burden of supporting the allegation in the answer that the Hackettstown Bank mortgage had been paid, is upon the defendant who makes the claim. The evidence does not support it.

Hill, the mortgagor, who was entitled to the credit, was the debtor who created and owed all the bonds and notes secured by all the mortgages. As he had made no application of it to any specific mortgage before the settlement, Mr. Karr, the creditor, who held Hill’s bonds and mortgages, had the right to appropriate it to such of them as he chose. He did apply it by giving a general credit of the amount remaining in his hands upon the whole amount due on all the mortgages, so that after the application of the credit they should, as a whole, stand as securing the payment of $5,000. On the faith of this assurance the complainant’s $5,000 was delivered and disbursed, and I think she is entitled to the benefit of the statements then made by Mr. Karr, that that sum remained due on those mortgages after the application of the credit.

As there was no direction by Hill that the credit should be applied to the Hackettstown Bank mortgage, and it was applied generally by Mr. Karr, without specific appropriation of any definite sum to any particular mortgage, the application of the credit still remains incomplete. So far as Mr. Karr had power to apply it, and so far as he actually did apply it, I think his action should be recognized as a forceful appropriation, but to the extent that he lacked the power to apply or failed to do so in an effectual manner, the court should apply the credit in accordance with equitable principles.

Mr. Karr assumed to apply the credit in reduction of the amount due on all the mortgages, including that made by Hill to Trimmer. Mr. Karr, as Hill’s creditor, having, money in his hands due Hill, had the right, when Hill did not direct its application to any one of his debts, to apply it to such of the debts he held against Hill as he (Karr) should choose. Karr testified that he thought the lease authorized him to apply the credit as he chose, but the lease dated March 25th, 1891, under which Hill held the premises till the spring of 1894, under which the credit accumulated in Karr’s hands, gave him no special right to appropriate the credit. His authority was simply that of a creditor who might apply a credit when his debts did not. But he had no right to apply it to any debt of Hill’s held by someone else unless by Hill’s direction. As to such debts he was not Hill’s creditor. In May, 1894, when the application was made at the time of the settlement in Morrow’s office, Mr. Karr was not the holder of the Trimmer mortgage. There is no proof that Hill directed the application of any part of the credit to the payment'of this mortgage, and Mr. Karr had no authority, without Hill’s direction, to appropriate the credit, in whole or in part, to pay Hill’s debt to Trimmer. No special application was made of it to Trimmer’s mortgage, but that debt was included in the computation of the aggregate $6,300 of Hill’s debts to which Karr applied the credit generally. This application, so far as the Trimmer mortgage is concerned, must be disregarded and the credit must be appropriated only towards the satisfaction of those mortgages which Karr, who made the appropriation, then held.

Mr. Karr, however, while having the right to apply the credit, and actually applying it generally, did not indicate any proportion or order in which the credit should be applied to the mortgages which he held. The rule is, that when neither the debtor nor the creditor directs the application to the payment of any particular debt the court may appropriate it, and in so doing the court will usually apply it to the payment of that debt which has the least security, upon the assumption that the debtor would desire to pay all his debts, and this disposition of the credit most nearly accomplishes that result. Terhune v. Colton, 1 Beas. 238, 312; Leeds v. Gifford, 14 Stew. Eq. 469.

No other evidence has been offered in this case which can be used to show that any one of the mortgages held by Mr. Karr in May, 1894, was a less certain security for the payment of the mortgage debt than the others, save that which arises from the inference that the subsequent mortgages have less likelihood of payment than the prior ones, where they all cover the same property. But the mortgage securing the last-created debt to the Hackettstown Bank is additionally secured by including tract No. 14, and as no proof has been made which shows that this mortgage, with this additional tract, is in any way less secure than any of the others held by Karr, there seems to be no reason for selecting any particular mortgage to receive the whole benefit of the credit. Mr. Karr’s act of appropriation was general on account of all of them. An application of the credit in proportionate reduction of all of the mortgages which he held accords with the spirit of his appropriation. I think the rights of all the parties are fairly recognized by the perfecting of the application left incomplete by Mr. Karr, and apportioning the credit of $1,287.83 in pro rata satisfaction of all the mortgages held by him when the settlement was made.

It is insisted that the defendant Frome has a right to have the credit so applied as to discharge the Hackettstown Bank mortgage, and thus allow him to hold tract No. 14 clear of any lien. The burden was upon Mr. Frome to prove some fact or contract which would support such an equity. He made no such proof. He did offer by his own testimony to prove what Hill had said to him about such an appropriation on two occasions, one before this suit was begun and the other afterwards, ' This testimony was objected to and rejected, because there was neither proof nor offer to prove that Hill, who was entitled to the credit, had made the statement as to appropriation in the presence or with the knowledge of Karr, who was the creditor. Nor were any circumstances shown which indicated that Karr could have known that Hill had claimed to have made an appropriation. The intention to appropriate to the payment of the particular debt must be signified to the creditor. Terhune v. Colton, 1 Beas. 237.

The offer to prove what Hill said as to appropriation after this suit was brought was subject to the same objection, and to the further, one that Hill’s declaration was made after Karr had applied the credit on Hill’s failure to direct its application, and after the complainant had taken the assignments and parted with her money on the assurance that $5,000 was due on all the mortgages, including that to the Hackettstown Bank. The statements of Hill, under the circumstances, were hearsay, and in no way evidential against the complainant.

As to Frome’s equitable right to have this court make an appropriation which shall prefer him by selecting the Hackettstown Bank mortgage and satisfy it for his benefit, he has shown nothing to justify such a preference, and as it would negative the assurance under which the complainant parted with her money, by lessening her security for its payment, and would defeat the appropriation generally made by Mr. Karr, the creditor, I think it would be inequitable for this court to make such special application of the credit.

I will advise a decree applying the credit of $1,287.83 in proportionate satisfaction of the amounts secured to be paid by the mortgages held by Karr and which he transferred to the complainant, namely, the mortgages of Hill to Dill, Hill to Washington Bank, and Hill to Hackettstown Bank. The order of sale of the mortgaged premises should be such that tract No. 14, to which the defendant Eróme has acquired title, should be the last sold to satisfy any residue remaining unpaid on the Hackettstown Bank mortgage from the other proceeds of sale.


text:
    Sarah I. Hall v. The Home Building Company.
    [Filed October 15th, 1897.]
    1. By the terms of a mortgage it is provided that the mortgagee shall, on request, release from the lien of the mortgage, for each §90 of principal paid, a lot of land to be selected by the mortgagor, or its grantee, containing two thousand square feet. There was a default in the payment of the interest due on the mortgage. Bill was filed to foreclose. A defendant who was a grantee of the mortgagor had made an inefficient tender, which he set up by way of answer. This was overruled. He now claims to have made a tender of §90 to the mortgagee, with a demand for the release of two thousand square feet of land conveyed to him and selected by him in accordance with the above provision. This tender and demand were made after the bill filed, but before decree against the defendant. — Held, the defendant should be permitted to file a supplemental answer, setting up the later tender and demand.
    2. The court will not refuse to hear a defence based upon an event which has happened since the filing of the bill, unless there be something in the relation of the parties, or the subject-matter of the suit, which should exclude the proposed defence.
    On bill, &c., and petition for leave to file supplemental answer.
    On order to show cause why the defendant Abram Anderson should not be allowed to amend his answer and set up a tender and request for release made subsequent to the filing of his answer.

      Messrs. Bergen & Bergen, for the complainant.

      Mr. John F. Harned, for the defendant Abram Anderson.
   Grey, V. C.

(orally).

I think the counsel have diligently examined this case, and I have gone over it myself with care, to see whether or not the petitioner ought to be allowed, under the terms of the agreement, and in the present status of the ease, to come in by way of supplemental answer, and, if need be, by cross-bill, to assert his rights. In my view, this is not a case where there is a seeking to amend because of a mistake of law. The cases where an amendment is refused on account of a mistake of law are those where, on the facts existing at the time the answer was filed, the answering defendant had set up his theory of defence against the complainant’s bill, and after the court had delivered itself of an opinion, as in the case referred to in the collection of Marshall’s opinions, 1 Brook. (Va.), where the defendant desired to amend his pleadings by a supplemental answer to conform to the opinion of the court. In this case there has been no opinion of the court on the facts which are sought to be set up here. It is an entirely new condition of things which the defendant Anderson claims he is entitled to submit to the court, to see whether or not it will affect the court’s judgment on the final decree of this case, which, as to him, has not been made. I am very clear that where the after-happening fact sought to be brought in affects the equities of the parties, and would influence the court in coming to a final decree, a supplemental answer setting up that fact which has come into existence since the bill and answer were filed, should be allowed. I know it is common practice, and has been done in this state again and again. That is, the court will not refuse to hear a defence based upon an event which has happened since the filing of the bill, unless something in the contract, the relations of the parties, or in the subject-matter of the suit, is of a character to cut off the new defence.

Whatever rights the defendant has to set up the defence which he opens in his petition, are claimed to exist under the contract set out in the complainant’s bill, and that contract is expressed very clearly as to its meaning, in my judgment. The defence arises under the second proviso, which is in these words:

“Provided, however, that during said term of five years the said company obligor, its successors or assigns, might at any time pay, on account of the said principal sum, such sum or sums of money as it or they might desire; provided, that the sum of eight thousand dollars at least, each year, should be paid on account of the said principal; and provided further, that the said obligee, her heirs, executors, administrators and assigns, should, and they did thereby agree, from time to time, and as often as request was made to her or them for that purpose, to release from the lien and operation of the said accompanying indenture of mortgage, for each ninety dollars of principal paid, a lot of land to be selected by the said party obligor, its successors and assigns, containing two thousand square feet of laud.”

Under that clause there was given to the mortgagor and to the mortgagor’s assigns a privilege, without specification of any time within which it should be exercised, to demand from the mortgagee a release from the lien and operation of the mortgage of such lot of land as the mortgagor or his assigns might select, containing two thousand square feet of land, upon the tender of $90 of principal.

The effect of that proviso, in the view which I take of it, is that it gives the defendant Anderson in this case, who is the grantee of the mortgagee, a right to select two thousand square feet of the land which has been conveyed to him, and to offer to pay the mortgagee $90 for a release of the selected two thousand square feet, and having done that he was entitled to a release of that portion of land from the lien of this mortgage and to claim that the mortgage was thereafter no lien on his land. When the parties made that bargain they did not attempt to create the relation of debtor and creditor between the grantees of the mortgagor and the mortgagee. Nothing in the contract imposed upon the grantees of the mortgagor any obligation to pay anything unless they desired to redeem a lot of two thousand square feet as prescribed in the proviso, in which case they were required to pay $90 to the mortgagee to secure a release of the lot. This proviso is an independent undertaking on the part of the mortgagee to release a lot of two thousand square feet on those terms, and the grantee of the mortgagor had no obligation to pay any additional sum; nor was the grantee called upon to show that the mortgagor had, at the time when the grantee undertook to accomplish a release, precedently paid up all interest due on the principal debt; nor was the grantee obliged to make his tender at a time preceding the bringing of the foreclosure suit. The previous hearing of this case, which was had on the question of the sufficiency of the first tender, was a hearing on the facts as they then existed, and the later tender of payment for a release under the proviso since this suit may be made just as if the suit had never been begun.

In my view, if this grantee of the mortgagor had never made any tender, but had been made a party and brought in here, and he had then made a tender as he now says he did, and asked leave to set it up under the terms of that contract, he had a right to set it up. That is exactly his attitude. That he had previously made an ineffective tender did not preclude him from afterward making an effectual one. He says he has now made a tender of $90 and has notified the mortgagee of the particular piece of land that he demanded should be released. I think he has a right, in view of the fact that no decree has been taken against him in that respect, to set up this new condition of affairs, and that such an application is not based upon a mistake in law as to an existing condition of fact on which the court has passed an opinion, but is offered on the part of the defendant to set up facts happening, of course, by his own creation, but which, by the contract, he had a right to create, since the filing of the bill. He had, under the contract, a continuing right to make this tender and demand the release of the two thousand square feet, certainly all the way up to the time when he should be cut ■off by the decree, and perhaps up to the time of an actual sale.

In Chrisman v. Hay, 43 Fed. Rep. 553, a purchaser of a lot was, under a similar contract, allowed to redeem at a date subsequent to a decree, the decree specifying the time within which he should redeem or be foreclosed of his right. This would fully justify the defence of a tender of redemption after suit begun, more especially when the bill in this case makes no affirmative allegation against the petitioning defendant, denying the existence, when the bill was filed, of his right then or thereafter to exercise this privilege to make a tender and thus to accomplish a release of the mortgage. All that is alleged in the bill is that the defendant Anderson has obtained a deed of these premises, and that his land so purchased is subject to the mortgage, but there is nothing in the bill which charges that he has no right to exercise his privilege of choice and tender for a release of the mortgage, nor is there any prayer that he may be cut off from it thereafter. The defendant Anderson was under no obligation to redeem the mortgage except as to his own piece of land, and the method he might pursue to be rid of the mortgage as to that piece was fixed by the contract between the parties.

If, by construction, such a burden were cast upon him, it would be to add a new term to the contract, and one of so much importance that, it seems to me, it would have been expressly stated had it been intended. The complainant’s claim is that before the release of any lot under the proviso can be fully demanded, the outstanding interest due on the whole mortgage debt must have been discharged. Such a construction would oblige the grantee to see that the interest on $63,800 was paid as a condition precedent to his tender of $90 for a release of a lot. containing but two thousand square feet. The true construction of the contract does not, in my judgment, cast upon a grantee of a portion of the premises such a duty as a condition precedent to his right to tender the $90 and demand a release of two thousand square feet, part of the mortgaged premises which had been conveyed to him.

I will advise an order that the defendant Anderson be permitted to file a supplemental answer setting up the facts referred to in his petition, and a cross-bill, if necessary to his relief.


text:
    Helen Ames v. The Trenton Brewing Company et al.
    [Filed November 23d, 1897.]
    1. Goods were delivered under a lease with a privilege of purchasing them at a named price; subsequently the lessee was enabled to buy them outright, he agreeing that a mortgage should be given to secure the purchase-money advanced by the mortgagee, and such a mortgage was given. The goods were placed on premises which had been demised to the mortgagor by a lease containing a covenant that “ improvements made upon the said premises ” the lessee should leave undisturbed for the benefit of the premises without charge.— Held, the title of the mortgagor to the goods was in the nature of a transitory seizin, and the purchase-money mortgage preceded any right of the lessor under the covenant in the lease of the premises.
    2. Under such a covenant the improvements to be left must be improvements of the realty itself.
    3. To become such an improvement the personalty must be converted into realty, and to be so converted it must have been actually annexed to the realty with an intention to make it a part of the demised premises.
    4. An attachment of ornamental bars, complete in themselves when they were brought on the premises, to the floor and wall of a saloon, by adjustable screws and angle and stay-irons, for the sole purpose of retaining them in their places, and of a beer pump and accompanying pipes to pump beer from a cellar, is not such an annexation as will convert this personalty into realty, so as to become an improvement of the demised premises.
    5. The fact that the lessor before and at the time of the purchase of these articles, and when he brought them on the demised premises, always treated them as personalty, and to obtain the purchase-money had agreed to mortgage them as chattels, and did so mortgage them, is an indication that he did not intend the articles named to become part of the realty.
    On bill and final hearing.
    This is a bill filed by the complainant, the owner of a beer saloon, at the northwest comer of Fourth and Market streets, in Camden, against the Trenton Brewing Company, a chattel mortgagee, claiming a lien upon certain equipment of that saloon, and August Weber, the lessee of the saloon and mortgagor in the chattel mortgage, and seeks to enforce a covenant not to remove improvements, &c., from the saloon, and to obtain an injunction to. restrain such removal, or any sale or other disposition of them. On the bill and affidavits annexed, a rule to show cause was allowed why an injunction should not issue restraining removal, &c., and further depositions were taken, upon notice and cross-examination. As the bill only seeks an injunction, the parties have by stipulation agreed that it should be heard as on final hearing upon the affidavits and depositions already submitted.
    The whole controversy turns upon the operation of a covenant contained in a lease made on the 18th day of August, 1894, by the complainant to the defendant August Weber, demising the saloon, its cellar and a part of the yard attached, for the term of one year, at the yearly rental of $480. The lessee covenants that he will not underlet, nor permit anyone to occupy nor use the premises for any other purpose than that of a saloon, nor “ make or suffer to be made any alteration therein without the written consent of the said party of the first part.” And also covenants that if the rent be unpaid, the lease shall be void, and that the lessor may enter, &c. It was further agreed by the lessee
    “that in case of any alterations, repairs or improvements made upon the said premises, he shall leave the same undisturbed at the expiration of his said term, for the benefit of the said premises and without charge therefor.”
    Under this lease from the complainant, Weber went into possession of the demised premises. He shortly afterwards took a partner, Mr. Abendroth, and they did. business under the name of Weber & Abendroth. About the 1st day of August, 1896, this firm leased from Lewis & Brother, manufacturers of bar fixtures and furniture, of Philadelphia, a complete set of bar furniture, consisting of a back bar with mirrors and marble trimmings, and a front bar or counter also with mirrors and marble trimmings, shelvings, a screen, partitions and swinging doors, fixing a purchase price of the goods at $1,000. In the lease between Lewis & Brother and the saloon-keepers was inserted this clause :
    “The lessee agrees that the said furniture shall not be attached or nailed to the building in which they are to be used, but shall be so placed and arranged as in nowise to be connected with the freehold.”
    Mr. Weber afterwards called on Lewis & Brother, and stated that he would prefer to purchase the furniture for cash; that the Trenton Brewing Company had agreed to advance them $1,000, and to take as security a chattel mortgage on the bar furniture. The articles named were delivered on the 5th day of September, 1894, at the saloon, under the lease from Lewis & Brother; payment was made in part on that day. The parties afterwards concluded to purchase outright, and on the 10th of October, 1894, the balance of the full price of the purchase-money was paid to Lewis & Brother, who gave to the manager of the Trenton Brewing Company, at the time when the company advanced the $1,000 to Weber & Aloendrotb, to enable them to make the purchase, a full description of the bar furniture.
    The character of the articles furnished is described by their manufacturers to have been entirely finished and complete in their wareroom in Philadelphia, and their manager and the carpenter who put them in support this statement and explain that they were cut into sections and refitted together, because of the inconvenience of moving them in the whole pieces as they stood in the wareroom. The only portion of the cabinet work which appears to have been specially adjusted to the building was some panel work which extended from the Market street side back to the end of the bar. Both the front and back bar and their equipment were complete and finished without this end, which was put in on the premises, at the request of Mr. Weber, to close that end. The bars were equipped for the drawing and selling of beer, by a beer pump, with pipe and spigots.
    The other articles in dispute consist of two chandeliers, gas fixtures and electric-light globes. These were attached to the gas pipes on the premises by Weber & Abeudroth, in the ordinary manner, for the purpose of lighting the saloon.
    The saloon-keepers had not the funds to pay for the two bars and their appurtenances. The Trenton Brewing Company agreed to lend $1,000 to enable the lessees to purchase them, and it was agreed that they should secure its payment by a chattel mortgage on the articles when purchased. The attorney of that company came to Camden, examined the front and back bar and partition screens, and found them all movable and unattached to the realty; he also examined the records to ascertain whether any previous liens had been fixed upon them, and finding none the chattel mortgage under which the Trenton Brewing Company claims was, on the 10th day of October, 1894, made and recorded, and the $1,000 paid over by the Trenton Brewing Company to the mortgagors, and was used by them in paying for the furniture. The articles included in the chattel mortgage were one cherry back bar, with marble trimmings and mirrors, shelving, door, fancy bottles, stock bottles, and bar appurtenances, beer pumps, pipes and spigots ■ one front bar (cherry), marble trimmings and mirrors, one cherry partition with mirrors and swinging doors, four tables, twelve chairs, spittoons, one lunch table, two chandeliers, gas and electric-light globes, one clock, oilcloth and matting, and one statue entitled “after the bath.”
    In 1896 the saloon-keepers had defaulted in the payment of their rent and in payment of the mortgage debt, and in December of that year the Trenton Brewing Company took possession of the various articles named in the chattel mortgage and advertised them for sale. The complainant then filed this bill to restrain this sale, alleging that the articles named were alterations, repairs and improvements upon the demised premises, and that they “ belonged to and became part of the said premises by virtue of the terms of the covenant herein set forth and mentioned.”
    After the lease was made Mr. Weber, the lessee, papered the saloon-room, put in a urinal, mended some places in the floor, and asked for consent (under the provisions in the lease that no alterations should be made without consent) to build an additional room for a pool-room in that portion of the yard demised to him. JSTo response was made by the lessor, and the tenant erected this additional room without any consent.
    These items would hardly be deemed alterations, as they left the original premises unchanged as they found them, but they were added to those premises in a permanent manner, and were therefore more in the nature of improvements. No question has been raised as to these, and they have no other relation to the dispute than to support the claim that the conduct of the tenant in permanently attaching these things to the realty was in recognition and satisfaction of the agreement to leave the improvements upon the premises, and in contrast with his action relative to the articles in dispute which he mortgaged as chattels, and which it is insisted never were attached to nor intended to be part of the demised premises.

      Messrs. Gilbert & Atkinson, for the complainant.

      Mr. John G. Horner and Mr. John T. Van Cleef, for the Trenton Brewing Company.
   Grey, V. C.

It appears to be undisputed that coincidently with the change from an agreement to lease the bars and cabinet work to the mortgagors, to the making of an absolute sale to them for cash, there was also an arrangement that the whole or a considerable part of the purchase-money should be advanced by the defendant the Trenton Brewing Company, which it was agreed should be secured by a mortgage upon the articles sold to the mortgagors. This proposition was indeed the.occasion of the change from the plan to lease to that finally adopted of an absolute sale, and the Trenton Brewing Company’s money was so obtained and used, without any knowledge on its part that the lease from the complainant contained the provision on which she based her claim. The money of the Trenton Brewing Company was thus made the means whereby the title to those articles was obtained to be put in the mortgagors, and the first object in putting this title in them seems to have been to enable them to secure the payment of the Trenton Brewing Company’s money by making the chattel mortgage in question. The mortgagors were substantially in the position of those to whom a title is given upon an understanding that it shall be disposed of in a certain manner. Their interest is, as to the thing agreed to be done, merely a transitory holding, and is not subject to the charges which ordinarily attend upon the vesting of title to property. Even in the law courts a transitory seizin will not support a right to dower in the wife of the grantee. Where the grantee takes a conveyance in fee, and at the same time mortgages the land to secure the purchase-money in whole or in part to the grantor, or to some other person, dower cannot be claimed against the mortgage. Griggs v. Smith, 7 Halst. 25. So, where a mechanic erects a building on land by contract with a person having a covenant for its conveyance, and the covenantee afterwards receives a deed, but at the same time mortgages it to a third person who advanced the purchase-money, it is held that no mechanics’ lien attaches. Thaxter v. Williams, 14 Pick. 54; Mackintosh v. Thurston, 10 C. E. Gr. 242. There appears, to have been, in the case under consideration, a delay of several weeks between the time when the goods were delivered on the premises under the lease, and the change to a sale, and the actual making of the chattel mortgage. But previous to the delivery under the sale the brewing company had agreed to make the advancement upon the security of' the chattel mortgage, and this agreement and advancement were the means whereby the goods were obtained to be delivered as sold.

The principle under which, in a court of equity, a purchase-money mortgage is given precedence is not dependent upon the instant carrying into effect of the agreement to give the mortgage, provided no superior equities have intervened during the period of delay. The saloon-keepers were for a time in possession of the articles named under the lease, with an apparently uncharged title, but this fact was not acted upon by the complainant in any way. She claims the articles not under the lease but under the subsequent sale to the mortgagors. The mortgagee parted with its money for the purpose of enabling the purchase to be made, and on the assurance that it should have the mortgage as security for its payment. The mortgagors received the title upon this agreement, and their holding was in the nature of a trust to carry the agreement into effect, and had they refused they could have been compelled in equity to make the mortgage.

The brewing company’s mortgage is a chattel mortgage. When it was given the goods named had been brought upon the demised premises. To be effectual as a chattel mortgage it must appear that the articles named in it were chattels at the time the mortgage was given and had not become a part of the demised premises.

The testimony of the witness Van Cleef, who prepared the chattel mortgage, is that at the' time it was executed he

“ examined the front and back bar and partition screen and found them all movable and in nowise attached to the realty, resting upon the floor of the saloon as any other piece of furniture would and as did the tables and chairs in the said saloon.”

No other witness testified as to the relation of these articles to the realty at the time the mortgage was executed, nor do any define with precision the time when the attachments were applied. If it were the actual condition, at the time the chattel mortgage was given, that there was no attachment whatsoever of the articles in dispute to the realty for any purpose, their subsequent attachment by the mortgagor tenant could at most only add to the realty the interest which the mortgagor tenant had in them — that is, his equity of redemption. Campbell v. Roddy, 17 Stew. Eq. 251. And even where the chattel mortgagee took his mortgage knowing the goods were to be annexed to the realty, if the detachment of the annexed articles will occasion no substantial damage he will be protected as against a previous real estate mortgagee, so far as his protection will not diminish the security held by the real estate mortgagee before the goods were annexed. Campbell v. Roddy, 17 Stew. Eq. 253. In cases of this character the courts are less favorable to a construction that there has been a conversion of the chattel into realty than when it is made by a mortgagee. Blancke v. Rogers, 11 C. E. Gr. 566. In this case there is no pretence that the chattel mortgagee knew that there was any intention to annex the articles to' the realty, so that its equity is even stronger than that in the Campbell Case above cited.

I prefer not to rest the case upon this limited view and will consider all the points presented by the pleadings and proofs and discussed in the arguments of counsel. The complainant, by her bill, states her equity to be that the articles constituting the bars and beer-supplying apparatus became and were in fact part of the demised premises under the terms of that provision in the lease which declares that in case any alterations, repairs or improvements were made upon the premises they should be left undisturbed at the expiration of the term. It becomes a question of the first importance, in the further consideration of this case, to ascertain the construction of this contract as applied to the circumstances of this case. It is not contended by the lessor complainant that the articles claimed to have become part of the realty are either alterations or repairs of the premises. The lessee did not change or alter the premises by taking away anything that was there when the lease was made and putting in its place any of the articles in question. Nor were the latter supplied as repairs of any worn-out or injured part of the demised premises. The complainant contends that the bars and beer apparatus were improvements within the meaning of the clause referred to, and that under its operation they have become part of the real estate demised. I think there is a clear distinction between an improvement upon lands which from its very nature becomes a part of the realty, as a house built by a trespasser upon the lands of another, and an apparent addition to realty which retains some of the essential incidents of a chattel though annexed to realty. Fixtures are all within this latter class, and as to such articles inquiry is permitted to ascertain whether the particular thing in question remains a chattel or has become real estate. The word “ improvements ” used in the lease is undoubtedly one of wide signification. I have read with interest the cases to which the counsel of the complainant has referred me as to the various structures which have been held to be included in this term. There is, I observe, one characteristic which attends upon all of them, from the paint put upon a house to the reconstruction of a wharf. The thing done which is held to be an improvement is done to the realty. The word itself conveys this meaning. In order that there might be an improvement there must previously have been something to be improved. In the case before me this was the demised premises. The improvement consisted in the amelioration or bettering of those premises. The provision in the lease which the complainant relies upon expressly defines the word to have this characteristic, for it declares that it is “improvements made upon the premises ” which shall be left. The improvements, to be within the provision, must, when made, savor of the realty. The association of the words in the clause of the covenant shows this to be the true meaning. It was “alterations, repairs or improvements made upon the premises ” which should be left. That is, if the premises should be altered, as by opening the wall and placing a window, the window should remain. If they should be repaired, as by hanging a new door in place of a broken one, the new door should be left. I think the improvements must also have been improvements of the demised premises, so that the condition and value of the premises as realty were improved, and that the word did not include articles which were in their nature chattels which had not been subjected by the parties to any action which converted them into realty. The covenant did not refer to improvements brought upon or placed in the demised premises. It was improvements made of the premises themselves which were agreed to be left. The complainant’s counsel asked several witnesses whether the disputed articles were not improvements of the premises, and whether if they were taken away the premises would not be less valuable, and has advanced some argument upon the theory indicated by these questions. The true inquiry is not whether the presence of these things is an improvement of the place, in the general sense of the questions asked. The presence in the saloon of the bars and their equipment is an improvement in the same sense that the room is improved by the presence of the chairs, tables and carpets, &c., which are in the chattel mortgage but are'not claimed under the covenant. Such things are improvements to the appearance of the place, but none of them can properly be deemed to be of that fixed character which is necessary in order to make them improvements of the real estate or its appurtenances. I think it must be held that the essence of the covenant is that the improvements shall be of the demised premises. Whether they were or were not improvements in the sense that they were betterings of the realty must depend upon their essential nature and the action and intention of the lessee in relating them to the demised premises the opinions of the witnesses as to the result are of little weight in the matter.

The latest exposition of the law by the court of errors upon, the kindred subject of the lien of a real estate mortgage upon articles having some of the characteristics of chattels, is to be found in the case of Feder v. Van Winkle, 8 Dick. Ch. Rep. 372. The three rules of guidance to determine what in such a case the lien of a real estate mortgage covered, are there restated thus: First, that the articles must be actually annexed to the realty; second, they must be applied to the purpose which that part of the realty to which they were annexed was appropriated ; third, they must be annexed with the intention to make them a permanent accession to the freehold. I think the first and third of these rules are aids in this case in seeking to ascertain the operation of the covenant in the lease upon the disputed articles. To constitute an improvement made upon the premises under the terms of this lease, it must have been actually annexed to the realty and intended to be a permanent accession to the freehold. The second rule is not, in my view, applicable to the case under consideration, because if there was any actual annexation to the premises, which was intended to become part of the realty, it must, under the agreement, be left, whether it was applied to the uses of the realty to which it was attached or not.

Accepting this construction of the terms of the lease, the questions to be determined are—

First. Were the articles in question actually annexed to the realty ?

Second. Was that annexation intended to be a permanent accession to the freehold ?

First, as to the annexation to the freehold. There must have been some sort of actual annexation. The manner of attachment may of itself be of so permanent a nature as to be almost conclusive evidence of a purpose permanently to incorporate the chattel with the realty, or it may be of such an adjustable character as to rebut that conclusion and support other evidence of the intention of the party not to incorporate the chattel with the realty. In this case the bars and their equipment, the partitions, doors and mirrors, and the beer pump and its attendant pipes were each and all perfect and complete in themselves for the uses to which they were adapted before they were brought upon the demised premises. The length of one partition at the back end of the bars and the length of the beer pipes seem to be the only things which required adjustment to fit them into the demised premises. They were all stock articles, capable of being' put into any saloon large enough to hold them. None were brought upon the premises as material to be used for the construction of an improvement of the demised premises. When they came thus complete and ready for use, it was found that the front bar, which, in its use, was likely to be jostled by men leaning on it, and the back bar, which ran up to so considerable a height that it might readily topple over, needed to be stayed in their places. It was also found that the pipes to and from the beer pump, and to supply water and carry off waste water, required holes to be cut in the floor corresponding to the position in which they were placed. For the purpose of preventing the front bar from being shaken or pushed out of its place, it was made firm by the use of several angle-irons, one member of which was screwed to the bar and the other to the floor. The back bar was also prevented from falling over by screwing it to stay-irons which were driven into the wall. Pipe holes, which were from seven-eighths of an inch to an inch and a half in diameter, were cut into the floor to let the pipes through. All these pipes were attached to the bars, and, except the waste-water pipe, were coupled by adjustable joints. When the bars had been put up they were held in their place by the screws in the angle-irons and stay-irons. If the screws were drawn the angle-irons would have no attachment to anything, and the stay-irons would remain sticking in the wall. If the beer pipes were uncoupled, the pump and pipes would be removable, leaving only the small pipe holes as an evidence that the pipes had ever been there. When thus disconnected the bars and their equipment, and the beer pump and its accompanying pipes, would be in substantially the same condition that they were when brought upon the premises, and capable of being placed in any other saloon large enough to hold them. This last characteristic is not conclusive as to the quality of the articles in question, but was held in the case of Feder v. Van Winkle to be a circumstance worthy of consideration. The demised premises would also have indicated no change from that shown before the disputed articles were placed there, save the several small pipe holes in the floor and the presence of the stay-irons sticking in the wall. The stopping of these small holes and the tapping and drawing of these stay-irons would absolutely restore the premises to their original condition, so far as any fastenings of the disputed articles changed them, and these restorations are, in my view, matters of so trifling a character that the necessity to make them cannot be appealed to as evidence of a purpose permanently to annex these articles to the premises. There was proof that, in making a trap-doorway into the cellar, several joists had been cut, but the cellarway has no relation to the disputed articles. The complainant’s contention is that the character of the annexation of the articles in dispute is of itself sufficient to show their actual incorporation into the realty, as effectually as the additional pool-room built by the lessee, or the painting or papering of the walls done by him, have become part of the demised premises. The impression I have received from the proofs is that the actual fastening of these articles has been shown to have been made solely because without support the front bar might be jostled out of place and the back bar toppled over. If such an annexation should be held to be sufficient to convert them from chattels into realty, their proper classification would seem to depend upon the breadth of the base or the height of the structure. If the base of the article were so broad that it did not need screwing to the floor, or the height were so low that it did not require to be stayed by the wall, it would never be so fastened and would remain a chattel, but if it had a narrow base, or were high enough to overset easily, then it must be fastened and would become realty. Whether it should be personal or realty would thus depend not upon the intention of the party that it should become realty, and his acts in accordance therewith, but upon the casual necessities attendant upon keeping a structure, complete in itself, in place, I think this case is fairly within the principles expounded by the unanimous vote of the court of errors in Blancke v. Rogers, 11 C. E. Gr. 563, where the dispute was between a real estate and a chattel mortgagee. This decision was approved by the same court in Feder v. Van Winkle, supra. An annexation simply incidental to the staying of the articles, and not constructive or incorporative of those articles into the realty, was held ineffective to bring them under the lien of the real estate mortgage.

I think the method of annexation of these completed stock articles was of such a temporary and adjustable character, under the circumstances proven, that it was not effective as an incident to make them part of the realty.

Upon the second question, of the intention of the lessee to make the chattels a part of the realty, the conduct of the parties interested at the time they acted seems to be wholly irreconcilable with any intent to improve the real estate. It might be that the acts of annexation and conversion were of such a clear and definite character that no room would be left to consider evidence of intention not to convert. The complainant contends that the fact of annexation in this ease was of this character. I think the case shows no such physical attachment as of itself works a conversion, and that evidence of the existence of a purpose not to attach the articles in dispute as improvements of the demised premises is forceful in support of the claim of the brewing company that they never were so attached as to be improvements. If there was always a clear purpose that the articles should remain chattels, and they were always dealt with as chattels, then they never became improvements of the realty. The cases of fixtures, and others involving the question of sufficient conversion of chattels into realty, all hold that the facts and circumstances of the particular case which may be indicative of the purpose of the lessee or mortgagor or owner, must be considered. The same rule may fairly be applied in ascertaining whether the articles in dispute in this case were improvements of the demised premises. In the later cases much more weight is given to the point of the intention to make the chattel a part of the realty than to the actual mode of annexation. In Erdman v. Moore, 29 Vr. 461, the late Chief-Justice Beasley held that the articles in dispute in that case could not by reason of their physical connection be deemed to be fixtures, yet when it appeared aliunde that there was an intention to make them fixtures this element was held to be controlling.

In the case of Feder v. Van Winkle, above cited, the court of errors declared that to effect a conversion the intention must exist to incorporate the chattels with the real estate for the uses to which the real estate is appropriated, and there must be the presence of such facts as do not lead to but repel the inference that it is intended to be a temporary annexation. It will be thus seen that the element of intention is the controlling factor in determining whether additions to real estate, which retain apparent indications that they are still personalty, have become incorporated into the realty. Each case must be controlled by the evidence of annexation and intention exhibited in that particular instance; the difficulty arises, as the court in the last-cited case declared, in applying the rule.

In this case there are several undisputed facts which I think show conclusively that the lessee never intended to incorporate any of the articles claimed by the chattel mortgagee as part of, or an improvement upon, the realty. The original purchase of these articles was effected by means of the loan made to the lessee by the brewing company, upon an assurance given it that it should have the chattel mortgage here in question. This agreement to give the chattel mortgage, and its subsequent performance, show that the lessee deemed the goods mortgaged to be, and intended them to continue to be, personal property. These acts were done by the lessee before the articles in question on the premises became his by purchase, before any dispute had arisen, and before any default in .the payment of the rent might have tempted him to deny an intention to annex these things to the freehold. So the mode of annexation of the. articles was adjustable and capable of easy disconnection. This mode of attachment required the purchase of special irons and stays which, had there been a purpose permanently to annex, would not have been necessary and would probably have been avoided on the ground of expense and additional labor. The testimony of the lessee mortgagor supports his previous action in giving the chattel mortgage. He testifies that the articles mortgaged never were intended by him to be alterations, repairs or improvements of the demised premises; that on the contrary they were regarded by him as furniture and intended to be taken away when the lessee decided to remove them. Nothing in the case contradicted these proofs, save only the inference sought to be drawn from the mode in which the articles in question are fixed in their places. Had they rested unstayed by their fastenings, there would be no evidence whatever of an intention to make them part of the realty. When all the proofs indicate a positive purpose not to convert these articles into realty, and this' one incident is capable of an explanation not inconsistent with the intention not to convert, I think I am bound to hold that the complainant has failed to support her allegation that under the operation of the covenant recited, the articles narhed have become part of the demised premises. I do not consider that this view conflicts with the principles of the decision of the court of errors in Feder v. Van Winkle, or of this court in Lee v. Hubschmidt Building Co., 10 Dick. Ch. Rep. 623. Each of those cases was determined by the special circumstances exhibited in the particular case.

Vice-Chancellor Pitney, in Lee v. Hubschmidt Building Co., was of the opinion that the case of Blancke v. Rogers had been limited by the court of errors in the case of Feder v. Van Winkle. The court of errors did not overrule or in terms modify Blancke v. Rogers, and whatever limitation it made of the rules laid down in that case is to be ascertained by an examination of the application of those rules to the circumstances of the later case. In the Blancke Case the facts showed that the attachment of the machine in question was made simply to steady it in its place, and I understand the spirit of the decision to be that such an attachment indicated no purpose to make the machine a part of the realty, and this view was not disapproved of in the Feder Case. In the latter decision the articles consisted of heavy machines, weighing from four hundred to eight thousand pounds, resting on and fastened to large timbers laid in the earth, some of them on a sub-foundation of concrete, others fastened by bolts and rods let down from the beams and rafters of the building. The court said : “ The machinery employed, the mode of its annexation and the manner of its use in connection with the realty as an entirety, indicated not a temporary, but a permanent accession.” The machines were shown by the proofs to have become by their attachment a part of the construction of the realty. In the Lee Case the facts as to the character of the machinery and its annexation to the realty were substantially the same as in the Feder Case, and the vice-chancellor accepted the latter case as controlling the question.

In my view, neither the Feder Case nor the Lee Case differs from the essential principle declared in the Blancke Case. Where the annexation is of such a character as to indicate a purpose to make the chattels part of the realty, as in the Feder and Lee Cases, they will be held to have become realty. Where the annexation does not indicate such an intent, and is proven to have been made for a different purpose, as in the Blandee Case and that now under consideration, the chattels do not become part of the realty. In Parker v. Wulstein, 3 Dick. Ch. Rep. 94, a lease provided “ that all improvements of the building shall belong to the landlord at the expiration of the term.” Vice-Chancellor Bird defined the word “improvement” to comprehend everything that tends to add to the value or convenience of a building or place of business. The question in that case arose between landlord and subtenant, and affected the right to remove shelves, counters, a heater, awnings, &c. In that case the counters and shelves were substantially nailed to the walls and became part of the construction of the building and were within the covenant, because they had clearly become part of the realty. In Blancke v. Rogers, ubi supra, the attachments of the machines were not structural in any sense, nor are the fastenings of the bars and their equipment in this case of that character. When such connections are made solely as a means of staying the chattels in their places and not as incorporative of them into the realty, they are not, in my view, improvements of the demised premises.

I have heretofore considered the status as chattels of the articles in dispute, other than the two chandeliers, the brass gas-fixtures and the electric-light globes. These latter articles, I think, differ from the bars and their equipment in their relation to the realty in all the respects noted. They were not within the articles which were obtained to be sold to the mortgagors upon the agreement to give the chattel mortgage. I do not understand that they were unattached when Van Cleef examined the premises and had the chattel mortgage executed. Their attachment to the realty was not casual and for a purpose consistent with their continued use as chattels. They were as solidly and permanently connected with the gas-pipes (which were a part of the realty) as the nature of their use would permit. This part of the realty (the gas-pipes) was not usable without these gas-fixtures, nor could the gas-fixtures be used without the gas-pipes. They became on their attachment so entirely an improvement of the realty that they were within the operation of the covenant, and were, when the chattel mortgage was given, real estate, and as to them the chattel mortgage was inoperative.

I will advise that an injunction be allowed to restrain only the sale of the two chandeliers, the brass gas-fixtures and the electric-light globes.