author: Kalisch, J. Minturn, J. White, J.

text:
    William N. Allen, complainant-respondent, v. The Francisco Sugar Company et al., defendants-appellants.
    [Argued at June term, 1920.
    Decided February 28th, 1921.]
    1. A corporation organized under the laws of this state may, under 8 Comp. Stat. p. 1600 § 8 pi. 8a, with the assent of two-thirds of its stockholders, lease its property and franchises to another corporation, domestic or foreign.
    2. A corporation chartered prior to that act could not so lease its property and franchises as against the objection of a stockholder, even though such stockholder acquired his stock after the passage of that act.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Fielder, and reported ante p. Wl.

      Messrs. Lindabury, Depue & Faulks (Mr. Richard Y. Linda-bury and Mr. Josiah Stryker of counsel), for the appellants.

      Messrs. McCarter & English (Mr. Robert H. McCcvrtw and Mr. George W. O.- McCarter of counsel), for the respondent.
   The opinion of the court was delivered by

Kalisch, J.

We concur in the result arrived at by the court below, but solely upon the grounds and for the reasons herein set forth. The facts are fully stated in the opinion of the learned vice-chancellor and, therefore, they need not be herein specifically reiterated. It is sufficient to state in a general way that the Francisco Sugar Company, a domestic corporation, was about to execute a lease for a period of ten years and eisrht months for its plant and land, practically all its revenue producing property, located in the island of Cuba, to the Compañía Azucarera Francisco, a Cuban corporation. The complainant, the owner of one. thousand five hundred shares of stock of the domestic corporation, filed his bill to restrain it from making the proposed lease to the foreign Cuban corporation. After a hearing on the bill of complaint and answering affidavits the vice-chancellor ordered an injunction, pendente lile, restraining the defendant sugar company from executing the proposed lease, and it is from that order the defendant company appeals.

The appellant was incorporated in February, 1899, at which time a few shares of stock were subscribed for and fully paid in cash. No other stock was issued until 1900, and it was of this latter issue of stock that the complainant acquired the shares which he now holds.

In March, 1899, a month after the appellant company incorporated, the legislature injected into the Corporation act a provision, which is section 2, placitum 2a, page 1600 (2 Comp. Stat.), providing as follows:

“Any corporation of this state, except railroad and canal corporations, may thereafter, with the assent of two-thirds in interest of its stockholders, either in person or by proxy, lease its property and franchises to any corporation, and every corporation of this state is hereby authorized to take the lease or any assignment thereof j for such terms and upon such conditions as may be agreed upon, and that any such lease or assignment, or both, heretofore made aré hereby validated,” &c.

Prior to the enactment of this statute, as fully indicated thereby, no such power to lease was embraced within the corporate powers of any corporation of this state.

As in the present instance the proposed lease was to be made to a foreign corporation, the learned vice-chancellor, in construing the statute above recited, held that the power conferred by that 'act was limited to a lease proposed to be made by one domestic corporation to another.

This view appears to us to be clearly erroneous. No such meaning, as was ascribed to the statute, by the court below, can be fairly gathered from the plain reading and spirit of it.

It is to be observed that the legislative act starts out with the broad term “an}r corporation of this state,” but was careful to except thereout railroad and canal corporations; and then follows in broad language without exception or restriction, that such corporation may lease its property and franchises to any corporation. This could mean nothing else than that a corporation organized under the laws of this state may lease its property and franchises to a corporation either domestic or foreign. For, it is hardly necessary .for us to add that if it was intended to restrict the. leasing to New Jersey corporations, language apt to declare that purpose would have been, to any corporation of this state. This view is re-enforced by the fact that in conferring authority on corporations to take such a lease it uses the phraseology “any corporation of this state.”

It is quite obvious that the legislature intended in that respect to deal exclusively with the corporations organized under the laws of this state, leaving to other states and foreign countries to deal with the matter of authorizing corporations organized under the laws of their respective jurisdiction to take such a lease. We, therefore, conclude that the statute clearly authorizes a lease by a New Jersey corporation to a foreign one.

The learned vice-chancellor further held that the act was inapplicable because it did not come into existence until a month after the organization of the appellant company so that it alters a contract between the stockholders.

It is clear from the decisions of our courts that before the passage of the statute the transaction contemplated to be transacted by the appellant company could not have been lawfully accomplished without the consent of all the stockholders. The complainant, in the present case, is the dissenting stockholder. The principle referred to is first clearly and forceably enunciated in a very able and learned opinion of Cortlandt Parker, embraced in a report made by him as master in chancery, in Kean v. Johnson et al., 1 Stock. 401, at which page the first two head-notes express the legal rule applicable to the present case.

“Where a board of directors, or a majority of stockholders deviate from the originally contemplated undertaking the ‘rights’ of other and dissenting stockholders are ‘affected,’ as against them they cannot legally do it.”

“A majority of stockholders in a prosperous corporation cannot, at their own mere caprice, sell out the whole source of their emoluments and invest their capital in other enterprises, where the minority desire the prosecution of the business in which they had engaged. The contract is that their joint funds shall, under the care of specified persons, generally called directors, be employed, and that for certain specified purposes.” This case was decided in 1853.

The. doctrine proclaimed in that case was followed by a long line of cases which are cited in the opinion of the court below.

In Black v. Delaware and Raritan Canal Co., 24 N. J. Eq. 455, this court approved the legal rule as laid down in Kean v. Johnson, and said: “After stockholders in a joint stock company have entered into a contract among themselves, under legislative sanction, and expended their money in the execution of the plan mutually agreed upon, the scheme cannot be radically changed by the majority by virtue of legislative enactment, and a dissentient stockholder compelled to engage in a new and totally different undertaking, without impairing his contract with his associates and with the state.” To the same effect is Mills v. Central Railroad Co., 41 N. J. Eq. 1.

The doctrine, recognized by the cases cited, springs from the organic law which forbids the legislature from passing any law impairing the obligations of contract, dr depriving a party of any remedy for enforcing a contract which existed at tfie time the contract was made.

Because it appears in the- present case that the complainant did not acquire his shares of stock until after the passage of the Leasing act, the contention of counsel of appellant is that the complainant is not in the position of a stockholder who had accruired his shares of stock before the act was passed, and, therefore, he must be considered as one whose “rights” as a shareholder was fixed by the statute at the time he bought his stock.

It is true that in Colgate v. United States Leather Co., 73 N. J. Eq. (at pp. 79, 80), Vice-Chancellor Emery observed that there is a 'difference between the rights of a stockholder who has purchased his share of stock before the passage of a statute altering the charter of the corporation and one who has made his purchase of suda shares after the legislative change. But, iaa that case on appeal, this court, in an opinion by Chancellor Pitney (in 75 N. J. Eq., at p. 235), expressly refrained from passing upon that and other questions discussed by the learned vice-chancellor.

It seems to us that to adopt the contention of counsel of appellant to the effect that the “rights” of the stockholder are fixed at the time he purchased his stock, and not by the original charter of the corporation, would be to lay down a rule which would tend to inextricable confusion.

There would be as many varied and distinct rights of stockholders depending upon the time of purchase as there were alterations in the charter affecting such rights.

A person proposing to buy stock could only properly protect himself against imposition of terms not warranted by the original compact, by having a sort of title search made to every stock certificate purchased. To impose such a burden on stock wnuhl destroy its value in the business world. It would detract from its negotiabilitjc The sound rule must, therefore, be that the buyer of stock whenever purchased comes into the original compact. Pie buys a share in that compact as well as in the property.

Eor the appellant it is further contended that under the reserved right which the legislature has to repeal or alter a charter, the purchaser of stock can only acquire such rights as existed at the time of the purchase. In Zabriskie v. Hackensack and New York Railroad Co., 18 N. J. Eq. 178, it was held that a legislative charter is a contract between the state and the corporation which the state cannot impair; and that corporators or partners associated for a special purpose specified in their charter or articles of partnership-, cannot change that purpose without the consent of all the corporators or partners; and that a reservation in a charter that the state may at any time alter, amend or repeal, i^is a reservation made by the state for its own benefit, and is not intended to affect or change- the rights of corporators as between each other. Nor does it authorize the state to authorize one part of the stockholders, for their own benefit, at their mere option, to change their contract with the other part; and that the power is restrained to the powers and franchises granted by the -charter. It does not authorize tire legislature to change the object of the incorporation, or to substitute another for it. An alteration or modification is necessarily of the grant or thing to be altered or modified, and cannot be done by substituting a different thing. Chief-Justice Beasley, in New Jersey Midland Railroad Co. v. Strait, 35 N. J. Law (at p. 325), speaks approvingly of the doctrine above enunciated. And.this court, speaking through Mr. Justice Van Syckel, in Berger v. United States Steel Corporation, 33 N. J. Eq. (at p. 824), says: “It must be conceded that it is firmly settled in our jurisprudence that the rights reserved in this sixth section to amend, alter or repeal charters extends only to the modification or destruction of rights as between the state and the corporation, but that the rights of the stockholders inter sese can in no respect be impaired, except in so far as impairment may result from ani alteration required by the public interest.”

The views promulgated by the decision's referred to lead us therefore to the conclusion that the power of the court below was.properly exercised in granting the preliminary injunction.

Having reached this result it is unnecessary to consider the question whether or not the transaction challenged bjr the complainant was or was not against the public policy of the federal government, discussed by the vice-chancellor in his opinion, and, therefore, we express no opinion on the matter.

For the reasons stated the order granting the preliminary injunction is affirmed, with costs.

Minturn, J.

(affirming).

An injunction pendente lite was granted restraining the Francisco Sugar Company, a corporation of this state, from executing a lease of practically all of its assets of the value of $1,000,-000 to a corporation organized under the laws of the Republic of Cuba, whose capital stock is only $100,000.

The dividend paid to its stockholders in June, 1919, was twenty per cent, in cash, and its business became so1 prosperous during the aftermath of the war that it is estimated recurring dividends are likely to' exceed former payments.

The complainant owns one hundred and fifty shares of stock, and his hill is filed for the purpose of preventing the consummation of a transfer for ten years, of the assets of the corporation, to the Cuban concern. The purpose of the transfer, confessedly, is to avoid the payment to the United States government of the federal) income taxes imposed for war purposes. That fact is averred in the affidavits; is not contradicted upon the record, and was frankly avowed by counsel for defendant upon the argument. With the questions of legal procedure argued involving the construction of the Corporation act, and the so-called Leasing act of 1899, I am in accord with the views expressed in the majority opinion of the court. But the all-important question, as I view it, is whether a corporation of this state may upon an open confession at the bar of this court of its purpose to circumvent the law of the land, obtain the imprimatur of the court upon its dubious undertaking.

-- In dealing with the proposition we have to recall that we are dealing not with the mentality of an individual, who may change his situs and his point of view ab libitum, but with an artificial creation of the state itself, whose situs is absolutely fixed by law, and the quality of whose mentality can be manifested only in the nature of the act it employs in the process of circumvention. May such an artificial creation of the state set at defiance the mandate of the power to which it owes its being ? Such is the practical concrete legal inquiry, which surpasses in legal importance any academic question of statutory construction in (which these proceedings may be enveloped. If this defendant may carry into execution the proposed scheme, every corporation transacting a foreign business may do likewise, and a precedent is thus set, whereby the ominous result may be attained of shifting corporate taxation to the shoulders of the already overburdened individual. To sustain the proposal a parallel is attempted between the individual who does a similar act to “avoid” rather than to “evade” taxation and the corporate attempt to do likewise. '

If such an esoteric distinction exist in the domain of lexicography -and etymology, as applied to the individual, it must be based in legal significance upon the bona 'fieles or the quo animo of the act itself, which is a matter for the individual conscience to- settle, rather than for the application of rigid legal rules. But since the artificial being we are dealing with, if we may credit Coke and Blackstone, is not possessed with such a moral harassing attribute, we are left without means of determining the character of its proposed act, except by perceiving the results of its execution, for good or evil, upon the body politic.

Among the recondite legal dicta, invoked to sustain the proposition is that incongruous and extraordinary effusion of Lord MacNaughton in Commissioners v. Byrne, A. C. 392, wherein his lordship observes: “No one may act in contravention of the law. But no .one is bound to- leave his property at the mercy (sic) of the revenue authorities if he can legally escape (sic) their grasp ;" a declaration which is tantamount to enunciating-that one must observe the law, but if the law -should work inconvenience to him he may lawfully defeat its execution by legally circxrmventing it; which paradox in practical application, is reminiscent of the legal metaphysics indulged at thesepulchre of Ophelia, where it was gravely and sagely observed that “an act hath three branches; it is to act, to do and to- perform." One is apt to- inquire where in such a metaphysical atmosphere the line of demarcation is to- be drawn, for if we accept the abstract doctrine, manifestly the elemental definitions of law become shattered beyond recognition. But whatever concession in this respect may' be accorded to the individual, whose - habitat and mental bona jides may be changed ab libitum, no-such concession can be admitted in the case of the state created corporation, which is possessed of no such convenient personal attributes, but which is the creature of the law-making power, generated upon a theory of public policy due to a state conception of public convenience, to accord with Iwhich public purpose, it is presumed the artificial creation will at all times shape-its course and guide its conduct.

If the doctrine of his lordship- were accepted as embodying the-spirit of the law, it is manifest that compliance with anjr law is relegated to the dubious domain of personal convenience; and" its execution thus becomes a mere pawn upon a legal chess' board, unavailable against one capable of circumventing it by specious logic, legal finesse or scholastic refinement. A body of law depending for its enforcement upon such a construction, must shock the moral sense and law-abiding' proclivities of the average citizen, who at all times and in every exigency, is called upon for public sacrifice; and who in the patriotic nomenclature of the day, is expected to measure up to a maximum of civic duty, estimated with mathematical exactitude, in the percentages of the counting house.

If this power be conceded to exist «in all corporations, and were generally exercised in these days of corporate enterprise, obviously, there must be an end to' orderly government; for without the practical effectuation of the taxing power, government must cease to function; and in such a status one needs not the vision of a seer to perceive the advent of Milton’s Inferno of “Chaos and Old Night.” ^

The learned vice-chancellor declared that the “avowed purpose is to save the stockholders a million dollars of federal income taxes.” But stated inversely the undisguised purpose is to prevent the federal government, and, incidentally, the state, collecting by taxation $1,000,000 annually from one of the state’s creatures, and thus shift the burden of the tax to the shoulders of the individual; and the learned vice-chancellor properly held that public policy will not sanction such a proceeding. The public policy of the general government, as indicated by its constitution and laws, becomes ex necessitate the public policy of the state, and, therefore, a law or policy of the latter, which contravenes the public policy of the union, is as nugatory as any law which militates against the constitution itself. Weston v. Charleston, 2 Pet. 449; McCulloch v. Maryland, 4 Wheat. 316; Texas v. White, 7 Wall. 700; Farmerst, &c., Bank v. Dearing, 91 U. S. 29.

In Brooks v. Cooper, 50 N. J. Eq. 768, this court declared that “an agreement to contravene a statute in fraud of the public, or to the injury of private parties, savors of a conspiracy;” and further, that “whatever tends to interfere with or control the administration of tire law as to executive, legislative or other official action, whenever embodied in, and made the subject of a contract, the contract is against public policy, and therefore void and not susceptible of enforcement.”

To the same effect are State v. Jersey City, 34 N. J. Law 397; Stroud v. Water Co., 56 N. J. Law 429.

Lord Brougham’s definition of public policy, which declares that “no one can lawfully do that which has a, tendency to be injurious to the' public welfare,” presents the rationale upon which the doctrine is based. Salus populi suprema lex, of course, is the basic proposition of government; and there is, says Montesque, illustrating the practical application of the-maxim, a-n “implied assent on the part of every member of society, that his own individual welfare shall in case of necessity yield to that of the community; and property, liberty and life shall under certain circumstances be placed in jeopardy, or even sacrificed for the public good.” Spirit of the Laws, Lib. 27 ch. 23.

In Ransom v. Burlington, 111 Iowa 77, it was declared that “while one may lawfully dispose of his property to- avoid taxation, a mere manipulation in the guise of disposition, the only effect of which is to avoid the lax, will not be upheld.”

To the same effect is Cooley Const. Lim. 769, and Mitchell v. Commissioners, 91 U. S. 206, and Sholwell v. Moore, 129 U. S. 590.

In ascertaining the quo ammo, recourse may be had to the emphatic and illuminative language of Chief-Justice Wilmot, of England, in Collins v. Blantern, 2 Wils. 341: “This is a contract to transgress the law, to do which is injurious to the community. It is void by the common law, and the reason why the common law says such contracts are void, is for the public good. You .shall not stipulate for iniquity.”

These considerations lead me to- concur in the views of the learned vice-chancellor, on this aspect of the case, and to vote for the affirmance of the decree appealed from.

I am requested to state that Mr. Justice Black and Judge Williams concur in these views.

White, J.

(dissenting).

My vote for reversal is based solely upon the fact, as appears in the case without contradiction, that after the act of 1899 was passed the corporation brought up and retired all its then outstanding capital stock, and thus with a clean slate started over again with its new issue of capital stock under its charter, which contained an express clause authorizing, as I think, such leasing as is now contemplated. The effect of this action in legalizing from that time on what before the act had been an unauthorized power in the charter was, I think, exactly the same as if, with the express consent of all of the stockholders, the corporation had formally accepted the enlargement of its charter powers provided for in the act. Such an acceptance with such consent would, I think, have been binding upon all subsequent stockholders. Rankin v. Newark Library Association, 64 N. J. Law 265.

Upon the question of public policy I think the answer must depend upon the legalitjr óf the proposed lease rather than upon the reasons for making it. If I own a sugar plantation in Cuba which is so- highly profitable that before our federal excess profits tax was imposed I refused an offer from a Cuban citizen of $1,000,000 for its purchase, but under the operation of that tax I conclude I would be better off if I accepted the offer and invested the proceeds in United States first liberty loan bonds, which are not taxable at all, I think I am at liberty to do so, although avoidance of the federal tax is the effect and also the moving cause of my so doing.

It is said, however, that as the lessor company owns all the stock of the foreign lessee corporation, the whole thing is a sham to evade federal taxation. The answer to' this is, that if it is a sham it will not evade the taxation, and, consequently, the ground for declaring an otherwise legal transaction unlawful because contrary to public policy does not exist.

For affw'mance—The Chibe-Justice, Trencharh, Parker, Minturn, Kaliscit, Black, Williams, Taylor, Ackerson —9.

For reversal—Swayze, Bergen, Katzenbaci-i, White, HepPENHEIMER—5.


source: Caselaw Access Project

author: Black, J. Parker, J.

license: Public Domain

text:
    John Carnahan, complainant-respondent, v. Joseph L. Carnahan, counter-claimant, Lillie M. Carnahan, defendant-appellant.
    [Argued November 18th, 1920.
    Decided February 28th, 1921.]
    A conveyance by a husband to a wife, in good faith and upon a consideration of money loaned by the wife to the husband, is valid against all persons; a husband has a right to secure or pay his wife for her advances to him.
    On appeal from the court of chancery.

      Mr. Clarence L. Cole, for the appellant.

      Messrs. Bourgeois & Coulomb, for the respondent.
   The opinion of the court was delivered by

Black, J.

The primary and perhaps the only disputed question involved in this suit is whether Joseph L. Carnahan was in fact indebted to his wife, Lillie M. Carnahan, for money loaned. On April 29th, 1918, he conveyed to her, through an intermediary, lot No. 2. with the house thereon, located on the west side of Vermont avenue, known as No. 206, Atlantic City, New Jersey. The dimensions of the lot are twenty-eight feet in front and rear by seventy-five feet deep. The problem for solution is largely one of fact. It was so treated by the learned vice-chancellor, who heard the case in the first instance. A bill was filed in the court of chancery by John C. Carnahan, father and creditor of Joseph L. Carnahan, to set aside the conveyance alleging that it was made in fraud of creditors and without 'consideration. A decree was advised setting aside the conveyance as against John C. Carnahan, and also establishing an indebtedness of the defendant, Lillie M. Carnahan, to her husband, for the balance of the proceeds of certain stock sold by the order of Joseph L. Carnahan and deposited to the credit of the wife, in the Union National Bank at Atlantic City, New Jersey. Our examination of the record leads us to the opposite conclusion from that reached by the learned vice-chancellor. He found the conveyance was made as a gift from the husband to the wife, applied the principle, that the donor received, at the time of the conveyance, no such independent advice as the law contemplates is necessary, to support such a gift, illustrated in the case of Post v. Hagen, 71 N. J. Eq. 234, a case of a voluntary conveyance, by way of gift, by a mother to a daughter. But, the record satisfies us, the consideration of the conveyance was an. existing indebtedness due the wife from the husband, which had been recognized by the husband, that Lillie M. C'arnahan, the wife, was an actual creditor of the husband, Joseph L. Carnahan. This fact being established, the legality of tire conveyance cannot be successfully attacked, on the ground that it was a gift, because it then stands upon the same ground as any other conveyance with a legal consideration. A conveyance by the husband to the wife, if made in good faith and for an adequate consideration, is valid against all persons. 21 Cyc. 1287; 12 R. C. L. 516 46. This court has said a husband has a right to secure or pay his wife for her advances to Mm. Brock v. Hudson County National Bank, 48 N. J. Eq. 618. In that case, the value of the property conveyed was in excess of the debt. It would serve no useful purpose to point out in detail and at length the testimony in the record, which is voluminous, that leads us to this conclusion. But these facts stand out undisputed. The papers were prepared in the office of Allen B. Endicott; the acknowledgments were taken before Joseph B. Perskie, lawyers of integrity and acknowledged standing at- the New Jersey bar. The property was assessed for the purposes of taxation at $7,500, subject to a purchase-money mortgage of $6,500, valued not in excess of $15,000; the expressed consideration in the deed to the husband dated October 5th, 1916, was $10,750. The wife testified that she received about fifty $1,000 bonds from her first husband; that she did receive something is not controverted. The indebtedness to her, so she testified, of the present husband, was $13,000, which he borrowed.. The amount she received from the proceeds of the sale of the stocks was $8,772.83, deposited in the Union National Bank at 'Atlantic City to her credit, and the learned vice-chancellor found of this sum she repaid $6,354; conceding these figures to be correct, she received from her husband $10,918.83 without any allowance for support, from the time the husband went to live in Pittsburgh in 1918, for which, in law, he was liable. Strawbridge v. Sigle, 73 N. J. Law 419; 13 R. C. L. 1188 229. That there was an indebtedness from the husband to the wife, as she testified, has some corroboration from the testimony of the husband; thus, in a letter, he says, “I will give your money to you and do all I can to1 help you, my spouse.” A witness, at page 228 of the record, testified that she heard the husband say “He was going to turn a leaf and pay her back every cent he owed her.” Page 229. “Sure, Lil, I will make good.” We can find nowhere in the record that the husband made any denial of this testimony. He testified, “I got a few dollars off of her;” true, he also testified, “She never gave me any money.” So, we conclude, the decree must be reversed, the record remitted to the court below, to the end that the bill of the complainant and the counter-claim of Joseph L. Carnahan may be dismissed. The defendant, Lillie M. Carnahan, is entitled to costs in both courts.

Parker, J.

(dissenting).

My conclusion from the evidence in this case is that the conveyance from husband to wife through - the intermediary was not the product of fraud or undue influence by the wife, and although without valid consideration, was itself valid as a settlement on the wife made voluntarily, and, hence, immune to attack by the husband himself. Hood v. Hood, 83 N. J. Eq. 695. But, being voluntary, it was not immune from attack by a judgment creditor of the husband, which was the status of his father, the complainant. Hence, the decree brought up^ should be affirmed so far as it supports tlie prayer of the principal bill, and reversed so far as it sustains the cross-bill, which should be dismissed.

Mr. Justices Kalisch and Katzenbach and Judge Iieppenheimer authorize me to say that they concur in this view.

For affirmance—Parker, Kalisci-i, Katzenbach, Heppenheimer, Williams—5.

For reversal—Tt-ie Ci-iiee-Justice, Swayze, Trenci-iard, Bergen, Minturn, Black, White, Taylor, Gardner, Ackerson—10.

For modification—Parker, Kalisci-i, Katzenbaci-i, HepPENHEIMER, WILLIAMS—5.


author: White, J.

text:
    Joseph Okin et al., plaintiffs-appellants, v. Broad and Market National Bank et al., defendants-respondents.
    [Argued November 23d, 1920.
    Decided March term, 1921.]
    A borrower filing a bill in chancery to be relieved from a usurious charge or contract must tender himself ready and willing to pay the amount he admits to be due, or, if not, to pay such amount as the court shall find to be due.
    'On appeal from the court of chancery.

      Mr. Aaron Morder, for the appellants.

      Mr. James II. Stewart, for the respondents.
   The opinion of the court was delivered by

White, J.

The respondent bank, the holder, as collateral to secure a loan made by it to the complainant Olein, of a duly executed and recorded assignment of a $15,000 interest in a second mortgage for $59,000, which Okin owned on a theatre in the city of Newark, purchased said mortgage at a private sale thereof made under a power to make sale in case of default in a previous assignment of the same mortgage as collateral security for another debt of Okin’s for $19,000, due one Shiman, which latter sum was the amount paid by the respondent for the mortgage at said private sale. Respondent, thereupon, upon the same day, namely. October 30th, 1916, entered into an agreement, in writing, duty acknowledged and'recorded, with, the complainants, whereby, in consideration of $3,000 then paid, respondent agreed to sell said mortgage to complainants for the sum of $34,000, to be paid on or before May. 29th, 1920 (which date was about one year after the due date of the mortgage), the interest on the mortgage in the meantime to be collected by respondent and applied, first, to the interest on said sum of $34,000; ■ second, to taxes, &c.; third, to repayment of attorney’s fees, &e., should respondents foreclose the mortgage, and fourth, any surplus of interest to be paid to complainants. The agreement further provided that should the mortgage be paid off or realized upon in foreclosure proceedings in the meantime, the principal should be applied in ithe same manner; and, further, should respondent foreclose and buy in the property, it agreed to convey the same to the complainants in consideration, of receiving a purchase-money mortgage for $34,000, drawn to fall due on the said 29th day of May, 1920. The agreement further provided:

“The parties of the second part [complainants] further covenant and agree that should they fail to perform this agreement in every particular on or before the 29th day of May, 1920, that they shall have, no right to or claim against said -mortgage, time being of the essence of this contract, and that upon default by them, the parties of the second part, the party of the first part [respondent] shall hold said mortgage absolutely free and discharged of any right in or claim against the same by reason of this agreement.
“And the parties of the second part further covenant and agree that they have no equity of redemption in said mortgage, except as is provided for in this agreement.”

Complainants thereupon paid the $3,000 consideration above mentioned to the respondents, and the agreement has since been carried out according to its terms, except that the respondent bank took promissory notes from complainants and had them regularly renewed each six months since the agreement was signed for the original debts of $19,000 and $15,000, respectively. Respondent says this was done simply to make the transaction appear on its books as a live asset to please the banking department, but complainants claim that it evidences what they testified was the fact, namely, that in reality the agreement in writing was but a cover to hide the usurious nature of the real transaction which was, as previously agreed between them, that the respondent bank would taire over the Shiman assignment and debt of $19,000 and should extend the time of payment of both this and the $15,000 debt which it already held until May of 1920, for which it was to receive the usurious consideration of $3,000 in addition to lawful interest on the debts in the meantime.

Shortly prior to the due date of the mortgage complainants notified the respondent bank to require payment of the principal of the mortgage. Instead of doing this, the respondent bank, as complainants claim, extended the time of payment of said mortgage for an additional jrear without consulting complainants about so doing; and, thereupon, on September 15th, 1919, complainants filed this bill in which they pray, among certain other incidental reliefs, that the respondents be directed to foreclose the mortgage and account for the proceeds, and that the court decree that the amount which respondents are entitled to receive in full settlement is the sum of $31,000—that is the bare principal of the debts without interest and less the $3,000 alleged usurious payment heretofore received.

The difficulty with the first of these two prayers is, that the respondent did not undertake in the agreement to foreclose the mortgage at maturity, or at any other time, but only to assign the mortgage on or before the specified date, and this agreement being recorded, any extension of the mortgage without complainants’ knowledge would, of course, be subject to their rights under the agreement; and the trouble with the second of said two prayers is that it appears in the case that the complainants have not made any tender of the amount which, according to their own contention, the respondents are entitled to receive before parting with what complainants say is simply security, nor do complainants in their bill filed in this case tender themselves read}'' to pay said amount or to pa.y such amount as the court shall find to be the proper amount. Miller v. Ford, 1 N. J. Eq. 359; Ware v. Thompson, 13 N. J. Eq. 66; Giveans v. McMurtry, 16 N. J. Eq. 473; Vanderveer v. Holcomb, 17 N. J. Eq. 547.

But it is urged that such a tender was not required in this case because the bill was filed September 15th, 1919, and under the agreement 'Complainants did not have to make any payment until May 29th, 1920. Complainants, however, had the privilege of paying at any time before the latter date, and as they saw fit to ask the aid of equity at the earlier date they were under the same obligation to do equity then as if they had waited until later.

We think, therefore, that for tire reasons above stated the vice-chancellor was right in dismissing the bill and the decree is herebjr affirmed, with costs.

For affirmance—Ti-ie Ci-iief-Justice, Swayze, Trenchard, Parker, Bergen, Black, Katzenbaci-i, White, Heppeni-ieimer, Williams, Taylor—11.

For reversal—None.


text:
    United Cigar Stores Company of America, a corporation, complainant-appellant, v. United Confectioners, a corporation, and Herman Geitzeiler, defendants-appellants.
    [Argued November 23d, 1920.
    Decided March term, 1921.]
    1. Defendants, in the same line of business, dressed their store front in such close simulation and imitation of the adjoining store front of complainants, imitating particularly several striking features which were distinctive of all of complainants’ stores there and elsewhere and which substantially constituted a trade-mark of the complainants, so that the public would be deceived into patronizing defendants’ store thinking they were patronizing the store of complainants.—Held, to be unfair trade and competition to restrain which an injunction would ibsue.
    2. Where the facts established beyond question at a hearing upon a rule to show cause why a preliminary injunction pendente lite to restrain unfair trade and competition should not issue, render it extremely unlikely that a different view will prevail at the final hearing, and where compliance with the mandatory features of the preliminary injunction if allowed, and restoration should the final hearing result in reversal, would not be either difficult or unduly expensive, and, on the other hand, the injury to the complainants, resulting from the unfair trade and competition were it permitted to continue during the time which would lapse until final hearing, would be substantial and irreparable, a preliminary injunction may properly issue.
    On appeal from the court of chancery, reported ante p. 56

      Mr. Merriti Lane, for the appellants.

      Messrs. Slein, Slein & LLamnoch, for the appellee.
   The opinion of the court was delivered by

White, J.

This' is an appeal from a decree of the court of chancery allowing a preliminary injunction to issue against the defendants because of unfair trade and competition, enjoining them from conducting or operating their business in two stores in Newark adjoining complainants’ store in such manner, bjr advertisement or otherwise, and especially in the particulars' set forth in the decree, as to deceive the public and lead it to believe that defendants’ business is being conducted by the complainants or as a part of their business.

We have examined the affidavits submitted both pro and con and thoroughly agree with the conclusion of the learned vice-chancellor (Stevenson.) before whom the case was heard, and who handed down a memorandum of his conclusions which is published in 92 N. J. Eq. (at p. 56).

The ground'of. appeal most strenuously urged at .the argument is that the case was not so clear and free from doubt nor was the likelihood of irreparable injury so imminent as to warrant the issuance of a preliminary injunction. • We are unable to agree with this view. An examination of the evidence and of the exhibits in the case, but without an actual visit to the premises which we did not find necessaiy, convinces us that the case is free from doubt. We also are convinced that defendants’ stores have .been “dressed” in such striking simulation and imitation of the appearance of complainants’ store as to deceive a very large part, if not practically all, the interested public who did not know otherwise, into thinking that defendants’ stores were a part of or compartments in complainants’ establishment, and, at least as to a substantial part of the public, to mislead them into patronizing defendants’ stores in the mistaken belief that it was complainants’ store which they were in fact patronizing as they intended to do. Under these circumstances, we think the likelihood of irreparable injury was sufficiently imminent to justify such a mandatory injunction before final hearing as was here issued. Every week of delay enabled defendants to attract away from complainants by the false representations held out by this imitation more and more of complainants’ customers and more and more of the benefit of complainants’ advertising and of their high reputation. On the other hand, what the decree required the defendants to do can easily be done, and also should the injunction be dissolved on final hearing, •undone, without much difficult3r or undue expense. Defendants can easily paint in again the “United” shield and the red band, and the various other similar devices which the preliminary injunction requires them to remove, but the good-will of an established business once diverted to a competitor can, in a great many eases, never be reclaimed or restored.

Feeling, as we do, therefore, that the facts established beyond question render a different conclusion at the final hearing extremely unlikely, and that a continuation by the defendants of the acts complained of until such final hearing, will work substantial and irreparable injury to the complainants, we think that the preliminary injunction was properly issued. Edison Storage Battery Co. v. Edison Automobile Co., 67 N. J. Eq. 44; O’Grady v. McDonald, 72 N. J. Eq. 805.

We have examined the other grounds of appeal and find them¡ without merit. The decree is, therefore, affirmed, with costs.

For affirmance—The Chief-Justice, Swayze, Trenci-iard, Parker, Bergen, KaLisch, Black, Katzenbaci-i, White, Heppenheimer, Williams, Taylor—12. .

For reversal—None.


author: Per Curiam.

text:
    Rebecca A. Hires, respondent, v. George Hires, Jr., appellant.
    [Decided February 28th, 1921.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, whose opinion is reported in 91 N. J. Eq. 366.

      Mr. Edward 0. Waddington, for the respondent.

      Mr. William A. W. Grier, for the appellant.
   Per Curiam.

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

For affirmance—The Chief-Justice, Swayze, Trenctiard, Parker, Bergen, Minturn, Kalisci-i, Black, Katzendaci-i, White, IIeppeni-ieimer, Williams, Taylor, Gardner, Ackerson—15.

For reversal—None.


text:
    Magdalina Hoffman et al., respondents. v. Christian Friend, Jr., appellant.
    [Decided February 28th, 1921.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevenson, whose opinion is reported ante p. 60.

      Messrs. Oouli & Smith, for the respondents.

      Messrs. Marl & Vanderwari, for the appellant.
   Per Curiam.

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

For affirmance—Ti-ie Chibe-Justice, Swayze, Trenci-iard, Parker, Bergen, Minturn, Kalisci-i) Black, Katzenbaci-i, White, IIeppbnueimer, Williams, Taylor, Gardner, Ackerson—15.

For reversal—None.


text:
    Walter Janowski et al., appellants, v. Joseph Przebieglec et al., respondents.
    [Decided February 28th, 1921.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Fielder, who filed the following opinion:
    “The bill of complaint charges that on April 9th, 1920, the parties to this suit entered into an agreement whereby the defendants agreed to convejf certain premises to complainants for a specified consideration, of which $100 was to be paid on the execution of the agreement and the balance on the delivery of the deed; that the agreement was on April 11th, 1920, reduced to writing and on that day signed, sealed, acknowledged and delivered; that three days thereafter defendants notified complainants that they would not carry out the agreement because it was made on Sunday. Complainants pray specific performance of the agreement.
    “Defendants now move to dismiss the bill on the ground that it discloses no cause of action and in their notice of motion specify as a reason (among others) that the agreement was executed and delivered on April 11th, 1920, which date fell upon Sunday, and therefore the agreement is void under the laws of this state.
    “The court will take judicial notice that April 11th, 1920, fell on a Sunday. Reed v. Wilson, 1¡.1 N. J. Law 29. It appears from the bill of complaint that the negotiations leading up to the written agreement to convey were conducted and concluded on a secular day, but that the terms were reduced to waiting on a Sunday, on which day tire written agreement was executed and delivered. The paral agreement made on the secular day is unenforceable, in view of section 5 of the statute of frauds (Comp. Stat. p. 2612), and the only agreement which this court might enforce is the written one. It is true that where there has been a partial or full performance of a parol agreement to convey lands, equity may enforce such an agreement, notwithstanding the statute of frauds (Cooper v. Colson, 66 N. J. Eq. 328), but the bill alleges no partial or full performance, and on the contrary states that on April 14th, 1920, defendants notified complainants they would not perform. Prior to the execution of the agreement on Sunday, the parties had done no more than agree on the terms of a contract which would not be binding on defendants in law, until it wras reduced to waiting and signed by them, and it uras evidently agreed that the parties should meet at a subsequent date and conclude their bargain by executing a written agreement They met again the following Sunday and on that day concluded the bargain by executing and delivering the written agreement set out in the bill. The written, and not the parol contract, is the one on which complainants must base their cause of action, and because the written contract wras made on Sunday, it is unenforceable. County Engineering Co. v. West, 88 N. J. Eq. 109.

    “The bill of complaint discloses no cause of action and the motion will be granted.”

      Mr. Seymour J. Solomon, for the appellants.

      Messrs. Smith & Slingerlmcl, for the respondents.
   Per Curiam.

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

For affirmance—Ti-ie Ciiiee-Justice, Swayze, Trenci-iard, Parker, Bergen, Minturn, Kalisoh, Black, Katzenbach, White, Heppenheimisr, Williams, Taylor, Gardner, Ackerson—15.

For reversal—None.


author: Pee Curiam.

text:
    Daniel R. Lean, Jr., respondent, v. Annie Leeds, appellant.
    [Decided February 28th, 1921.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, who filed the following opinion:
    “I shall not undertake at this time to dispose of this matter finally; further reflection or suggestion of counsel by way of brief, if counsel desire to be heard further, may change my views. At this time, however, I wish to outline my views sufficiently to enable counsel to at least apprehend the present condition of my mind in the matter.
    “I am unable to see at this time any possible defence to this ease, unless, perchance, it he a defence growing out of the mental condition of the defendant—the want of intelligent and volunta.ry action up'on her part at the moment she signed the contract of sale. The'contract in its terms embodies all the essential elements of a contract for the sale of real estate and is signed ly the party to bo charged. The onLy element ordinarily embodied in such contracts which is absent in this is the element of time for final pajunent and final delivery of the deed, but that element is not essential, so- far as the express terms of the written contract is concerned, because in its absence a reasonable time will be implied- The receipt discloses that part of the contract price was paid at the time the contract was made: the balance was necessarily to be paid later, and a reasonable time for such payment is necessarily implied. Where, as here, a title company is employed at once to examine the title and that compare finishes its examination in the time that the examination of title was finished in this case, and the vendee at that time tenders performance ho lias, in my judgment, made his tender within a reasonable time.

      “I am unable to see how complainant is in any way either aided or injured by his attempt to show that a stipulation was made that the money should he paid and the deed delivered after the title company had passed the title. The claim is made and denied that such a stipulation existed, and that it was a part of the agreement and was made at the time the writing was signed; it is incompetent for complainant to supplement the contract in that manner, because the writing cannot be added to or substraeted from or contradicted in any way, it must he taken on its face for what it says, either expressly or by adequate- implication. As already stated, the writing discloses a partial payment of the price; the privilege to pay the balance in- a reasonable time is adequately implied.
    “The circumstance that the contract is in form unilateral is not, in my judgment, a possible source of defence. Where the owner of property signs a. writing in which he agrees to convey upon adequate consideration and terms it is unnecessary that the vendee should sign tile contract. It is true the vendee is not at that time bound to perform, because be has not in writing bound himself to perform, but when his bill is- filed fox specific performance of a contract he does become bound and is equally bound with the vendor.

      “So, so far as I can at present see, the1 only question involved in this case which, to my mind presents any doubt is whether at the time the contract was signed defendant vendor acted with intelligence, whether the contract represents intelligent and voluntary action upon her part. I confess that on that question it seems to me there cannot be Very much doubt. There is no evidence in this case that indicates that the vendor was not entirely normal and capable of normal action at that time. It is true, she says, and her daughter-in-law also’ sajrs, that she was largely influenced by her son and daughter-in-law desiring her to agree to sell, but even that, it seems tó me; would in no way render the contract, otherwise unobjectionable, unenforceable. Obviously, she would be necessarily more or less influenced in her action by the wishes of those around her who were near and dear to her, her son and her daughter-in-law. It is right, proper and natural that she should be. Indeed, she had asked the vendee to await further negotiation until her son returned, in order that she could consult him. Unless she was wanting in mental capacito or was subject to the influence of those around her to an unreasonable degree, and I do not think the evidence discloses either, it seems to me that the contract is enforceable.
    “The other question which Judge Cole has presented very elaborately and very forcefully relates to matters arising subsequent to the contract. It appears to be true that this contract has been the cause of almost mentally unseating defendant; its existence has brought her to an extremely nervous condition. After signing the contract further reflection upon the subject led her to feel that she had done wrong not in agreeing to sell the property for less than it was worth, but in that she had done wrong in parting with an old home that she had inherited from her husband and had occupied for so many years. That thought, that purely sentimental thought, worked upon her nerves until she has almost gone into melancholia. There may be a danger, if the doctor is not extreme in his views, that an adverse decree in this case may be more or less dangerous to her mental condition, and I confess that if there is to be found any field of discretion in a court of equity in granting relief in this case that will justify the refusal of a decree because of its possible effect oil defendant’s nerves, the court is inclined to avail itself of that discretion in circumstances of that kind; but I shall need to be convinced that the sound discretion which is regarded as a prerogative of a court of equity in granting a prayer for a decree of specific performance extends so far. The consequences of a decree, it is true, should in some circumstances be considered; but the mere fact that a defendant has allowed herself to' get worked up to such a nervous state over her contract cannot, it seems to me, afford justifiable grounds for a, court of equity to exercise a discretion in refusing a decree which complainant would otherwise be clearly entitled to. The sound discretion which is so frequently referred to in eases for specific performance I understand to be largely a technical term; it is essentially the exercise of a sound judgment based upon right and justice in accordance with defined equitable principles as established by precedents in cases of this class; the established principles must control the discretion. A court of equity is not permitted to disregard established equitable rules in the exercise of its discretion in cases of this class, the discretion to be exercised must be a judicial and not a capricious discretion; and unless counsel can convince me by some authorities which may be cited, in case a brief is sought to be filed, that the exercise of a discretion of this court in refusing this decree can find legal justification because of its possible and,-1, perhaps, may say, probable detrimental influence upon, the mental condition of defendant, owing to the nervous state she has reached in contemplating the loss of her old home, it presently seems to me I shall be obliged to advise a decree for performance.
    “Mr. Cole-ANow, vice-chancellor, shall the brief be limited, to that latter question ?
    “The Vice-Chancellor—Brief the whole subject; I shall hold my mind open on the whole case.
    “Mr. Perskie—Will your honor designate any special time?
    “The Vice-Chancellor—If you can do it within a week-—say by the middle of next week.
    “Mr. Cole—I am willing to hand Mr. Perskie a brief within a week or ten days.

      “SUPPLEMENTAL.
    “I am satisfied that complainant is entitled to a decree for specific performance. The contract was intelligently and fairly made and is just, reasonable, fair and equitable in all its parts. Complainant has come into court with perfect propriety of conduct and cannot, in my judgment, be dismissed merely because defendant has changed her mind and reached a highly nervous condition because, for purely sentimental reasons, she does not now wish to perform her contract.
    “Mr. Ery, in his work on Specific Performance, states the rule to be, without limitation or exception, that if a contract is fair and unobjectionable at its inception, no change of circumstances or relations ór events, however unexpected, and however much inequality and hardship they may produce in the operation of the agreement, shall constitute a sufficient ground 'for denying the remedy of specific performance. Fry Spec. Perf. §§ 2S5, 252. '
    “There appear to be some cases affording exceptions to the rule 'thus broadly stated, but I find no authority that tends to support the view that matters arising subsequent to the contract with which complainant is in no way connected or responsible for, and which alone concern the personal interests, as distinguished from the pecuniary interest, of defendant, can be made the basis of defence to a suit for specific performance.
    “I feel obliged to advise a decree pursuant to the prayer of the bill.”

      Mr. Joseph B. Perskie, for the respondent.

      Mr. Clarence L. Cole, for the appellant.
   Pee Curiam.

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

For affirmance—Ti-ie Chief-Justice, Savayze, Trenct-iard,Parker, Bergen, Minturn, Kalisci-i, Black, Katzenbacíi, White, I-Ieppenheimer, Williams, Taylor—13.

For reversal—None.


text:
    Montclair Savings Bank, complainant, v. Cornelia M. Partridge, defendant.
    [Decided February 28th, 1921.]
    On appeal of Lorenzo E. Woodhouse, executor.
    On-appeal from a decree of the court of chancery advised by Vice-Chancellor Stevenson, and reported ante p. $8.

      Mr. Richard Boardman, for the complainant.

      Messrs. Gwrick & WorienSyke, for the defendant.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in. the court below b3r Vice-Chancellor Stevenson.

For aiffirmance—Ti-ie Ci-iief-Justice, Swayze, Trenci-iard, Parker, Bergen, Black, Katzenbach, Williams, Taylor, Gardner, Ackerson—11.

For reversal—None.


text:
    Oscar Schwabinger, appellant, v. John Saxon et al., respondents.
    [Decided February 28th, 1921.]
    On appeal from a decree of the court of chancery advised by Yiee-Chancellor Fielder, who filed the following opinion:
    “Without expressing an opinion on any other question raised in the case, I conclude that complainant must be denied the relief he seeks because section 39 of the Conveyance act (Comp. Stat. p. 16P7, as amended b3r P. L. 1918 p. 119') has not been complied with. That section provides that no estate of a married woman in lands shall pass by her deed without a previous acknowledgment made by her that she signed, sealed and delivered the same as her voluntary act and deed, the officer having first make known to her the contents thereof. A contract for the sale of her interest in lands must comply with this statute. Chas-smani v. Wiese, ®0 N. J. Eq. h0\8. Although the contract in this case bears a certificate of - acknowledgment in due form, I find from the testimon]q including that of the officer who signed the certificate, that tire acknowledgment required by the statute was in fact not made by Mrs. Saxon. The blank form of agreement to convey was not entirely filled in when she signed it, and although it may be that she told the scrivener, who was the officer who certified the acknowledgment, that she knew what terms and conditions were to be inserted and authorized him to complete the draft and that when completed, the agreement was in the form she understood it was to be, the officer could not have complied with the statute by making the contents known to her and she did not acknowledge that she signed, sealed and delivered a completed contract as her voluntary act and deed.

      “Our law guards the conveyance by a married woman of any interest in her lands with a sjiecial care. It malíes it the duty of the officer talcing her acknowledgment to explain to her the contents of a completed instrument and then to ascertain- from her whether she has willingly affixed her signature thereto and it gives her up to the point when she is made acquainted with the actual contents of the instrument an opportunity to declare any objection she may have to executing and delivering it.
    “The defendants must return to- complainant the amount of the deposit paid by him on the contract, with interest from the date of payment, and the complainant must deliver up the contract to the defendants for cancellation.
    “No costs will be allowed either party.”

      Mr. Harry Seller and Mr. D. Frederick Burnett, for the appellant.

      Messrs. Stem, Stein é Hanvnoch, for the respondents.
   Per Curiam.

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

For affirmance—The Ci-iibe-Justioe, Swayze, Trenchard, Parker, Bergen, Minturñ, Kalisoi-i, Black, Katzenbaci-i, White, Heppeni-ieimer, Williams, Taylor, Gardner, Ackerson—15.

For reversal—None.


text:
    George Wilson et al., trading as United Tin Trading Company, respondents, v. Marion E. Sandall, appellant.
    [Decided February 28th, 1921.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Backes, and reported ante p. 130.

      Mr. Norman Grey, for the respondents.

      Mr. Lewis Fisher, for the appellant.
   Per Curiam.

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

For affirmance—Ti-ie Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisci-i, Black, Katzbnbaci-i, White, ITeprenheimer, Williams, Taylor, Gardner, Aokerson—15. .

For reversal—None.


author: Walker, Chancellor.

text:
    John Riley and Mary Ann Riley, his wife, v. William Riley and Katie Riley, his wife.
    [Decided March 31st, 1921.]
    1. Where an executor is also devisee, a judgment recovered against him as executor upon a claim against his decedent’s estate is not a lien either upon the estate of the decedent or that which came to him individvially dissociated from his office of executor; but the debts of the ancestor remain a lien thereon for one, year after his death and until a l>ona fide sale by the devisee after the expiration of such, year. Such a judgment is, however, payable through certain statutory proceedings.
    2. After sale in partition a creditor may come into court and have his debt paid out of the proceeds of sale; provided his claim was enforceable against the land.
    3. The proceeds of the sale of land retain the character of real estate for the purposes of succession and distribution.
    4. While a husband, whose wife has not borne him a child alive, has neither an estate by the curtesy initiate nor an inchoate right of curtesy in her land, ho has, nevertheless, a contingent estate in remainder, because, upon the happening of the contingency of issue born alive, he would have an inchoate right of curtesy, and upon surviving his wife, he would be entitled to an estate by the curtesy consummate—that is, a freehold estate in possession for the remainder of his life.
    5. A husband’s right to possible succession to his wife’s interest in a fund raised by the involuntary sale of her estate in lands by process of law, is not to be defeated by payment of the fund to her, but the fund will be conserved and protected so as to be available to meet the husband’s ultimate estate by the curtesy therein if it become consummate.
    6. W. R. is forty-seven and K. R., his wife, is forty years old; they have never had issue, and have lived separate, and apart for several years. —Held, there is no presumption that she will not bear him a child alive, which event would create in him a vested remainder or inchoate right of curtesy, and, upon his surviving her, an estate by the curtesy consummate.

      7. There is no period in the life of a woman when it is presumed in law that she may not possibly bear children, no matter liow old she may be.
    On application for money in court.

      Mr. Richard Fiizherbert, for the applicant, Katie Ri'Jev.

      Mr. James II. Bolitho, for William Riley, contra.

   Walker, Chancellor.

This is a partition suit. The complainants are John Riley and Mary Aim, his wife, and the defendants are William Riley and Katie, his wife. The present proceeding is an application at the foot of the decree for a portion of the proceeds of the sale of the lands which were sought to be partitioned. The pertinent facts are these: James Riley, father of the complainant John Riley, and of the defendant William Riley, departed this life May 22d, 1893, intestate, seized in fee of a tract of land.in the borough of Wharton, and also of an equal undivided one-half part of a tract of land in the township of Randolph, both in the county of Morris. He left him surviving his widow, Ann Riley, and his two sons, John and William. The widow died March 29th, 1916, testate, seized of the other equal undivided half part of the Randolph tract, and in and by her last will and testament, which was duly proved, she devised the same to her son William Riley. The bill for partition was filed January 10th, 1918, and at that time the seizin of the brothers was as follows: John, one-half of the Wharton tract and one-quarter of the Randolph tract, subject to the inchoate right of dower of his wife, Mary Ann; and William, one-half of the Wharton tract and three-fourths of the Randolph tract, subject to the inchoate right of dower of his wife, Katie.

On February 2d, 1917, judgment was recovered by the executors of Robert F. Orams, deceased, against William Riley, in a small cause court and docketed in the Morris county clerk’s office for $26.66 damages and costs. Another judgment was obtained on the same day by the executors of Robert F. Orams, deceased, against William Riley as executor of Ann Riley, deceased, in a small cause court and docketed in- the Morris county clerk’s office for $46.08 damages and costs. Both of these judgments were assigned by the executors of Orams to Katie Riley before the filing of the bill. Pending this suit executions were issued on both judgments and sale was made by the sheriff of Morris county under those writs, at which sales Katie Riley became the purchaser and was given deeds. Under the execution against William Riley, executor, the sheriff sold to Katie the right, title and interest which was of the said Ann Riley, deceased, at the time of her death, in the tract of which she died seized—the Randolph tract; and under the execution on the judgment against William Riley, individually, he sold to her the right, title and interest of her husband in the other tract of which partition- was sought—the Wharton tract.

The deed for the Randolph tract passed no- title for reasons hereinafter stated. Katie Riley secured a good title to the undivided share and interest of William Riley in the Wharton tract, by virtue of the sheriff’s sale thereof and deed therefor, and is the owner of the net proceeds of that share arising from the sale, amounting to $1,326.63, which has been paid into court. Her husband claims an interest in this, share.

On April 29th, 1920, Katie Riley filed a petition in this cause claiming ownership in fee in the equal undivided one-half of the Wharton tract, by virtue of the proceedings above recited; and also like ownership in the equal undivided three-fourths of the Randolph tract, bv virtue of the same proceedings, setting up that the right, title and interest which was of her husband in the Wharton tract passed to her, and that the right, title and interest which was of her mother-in-law, Ann Riley, deceased, has passed to her. William Riley, the husband, filed an answer to the petition, in which he averred that he furnished the consideration for the purchase of the judgments mentioned to- protect his interest in the premises, and that it was understood that the purchase was to be made for the benefit of both himself and his wife. An order was made on the petition requiring William Riley to show cause why the selling master should not be directed to pay the proceeds of sale of the share of William Riley to the petitioner, Katie Riley. On the hearing of the order to show cause, on May 24th, 1920, it was ordered that the selling master pay into this court the share of the proceeds arising from the sale which was of the defendant William Riley, to abide the further order of-this court; with leave to Katie. Riley to apply for disposition- of the money so paid. The present application is in pursuance not only of that leave but also of the leave given in the decree for sale, which likewise ordered payment into court.

■ Depositions or other evidence -have not been taken on the order to show cause, but - on the argument it was conceded that the facts of record adverted to above are true.

.4s to the Randolph tract:—The sheriff’s deed passed no title to Katie, because the judgment against the representative- of a decedent’s estate only adjudicates the liability of the estate and ascertains and fixes the amount of the claim, but does not make it a lien upon the lands of the deceased debtor. But the claim on which this judgment is founded is payable out of the procecds of sale of the Randolph tract, for reasons hereafter to be stated.

The decree directed the sale of both tracts, including the inchoate right of dower of the complainant' Mary Ann Riley in the undivided share of her husband, John Riley, and also the inchoate right of dower of the defendant Ivatie Riley in the undivided share of her husband, William Riley; and directed the selling master to bring into court the portion of the moneys arising .from the share of the defendant William Riley, which was subject to the lien of the judgment recovered against him individually by Orams’ executors, to the end that the same might be disposed of as the chancellor should direct, but did not direct, that the sale be made free from the lien of that judgment. This direction for bringing in the money and its proper disposition majr be treated as in effect a direction to sell free from the encumbrance of that judgment and as an exoneration of the land from the lien thereof. There is no mention of the judgment against William Riley, executor, in the decree; but leave was given at the foot thereof for the parties, or either of them; to be at liberty to apply to the court for further directions if occasion should require.

The judgment against William Riley, executor, was for his mother’s debt, and ascertained it ando fixed the amount. The right Katie has in the proceeds of the sale of the Randolph tract by virtue of the debt ascertained in this judgment has been put in suit here by petition; and, therefore, the amount of the judgment against William Riley, executor, while not a lien upon the land of which his mother died seized, and which by her will was devised to him, is, nevertheless, to be paid out of the proceeds of the sale of that tract, for reasons hereinafter stated, notwithstanding that where an executor is also a devisee a judgment recovered against him as executor upon a claim against his decedent’s estate is not a lien either upon the estate of the decedent or that which came to devisee, dissociated from his office of executor. Mott v. German Hospital, 55 N. J. Eq. 722. Such a judgment is, however, payable through certain statutory proceedings, which need not here be mentioned.

So long as the title to lands descended remains in the heirs or devisees the debts of the ancestor constitute a lien thereon. Haston v. Castner, 31 N. J. Eq. 697, 699. Notwithstanding, the statute provides that the lands of the ancestor shall remain liable for the payment of his debts for one year after his decease, yet it has been held that until a bona ficto sale has been made by the heirs or devisees, the lien continues and is so recognized in the seventy-seventh section of the same act. Ibid. 699; Morgan v. Morgan, 71 N. J. Eq. 606, 608.

In Latimer v. Hanson, 1 Bland 51, after a sale under a bill for partition, a creditor was permitted to come in by petition and have his debt paid out of the proceeds of sale. And that case was approvingly cited by Chancellor Green in Speer v. Speer, 14 N. J. Eq. 240 (at p. 251). That is the established practice of this court and has been comprehended in the chancery rules since 1870. See rules Nos. 221 et seq. (compilation of 1917). Of course, the creditor would have to have a right to enforce his claim against the land. See First National Bank v. Thompson, 61 N. J. Eq. 188, 202. Therefore, the debt of the testator, Ann Riley, which is embodied in the judgment recovered against her executor, will be paid out of the proceeds of her devisee’s interest in the Randolph tract.

As to the Wharton tract.—-This concerns the claim of William Riley to the proceeds of the sale of the interest in the lands which were his and which passed to his wife by virtue of the judgment against him individually, which was assigned to her and on which an execution was issued, under which his right, title and interest was sold and conveyed to her by the sheriff before the sale in partition, and who was therefore at the time of the latter sale the owner of the fee in what had been bis undivided estate in the lands.

The proceeds of the sale of land retain the character of real estate for the purposes of succession and distribution. Hackensack Trust Co. v. Tracey, 86 N. J. Eq. 301, 307. In that case I held that while a husband, whose wife has not borne him a child alive, has neither an estate by the curtesy initiate nor an inchoate right of curtesy in his wife’s land, he has, nevertheless, a contingent estate in remainder in that land; because, upon the happening of the contingency of issue born alive he would have an inchoate right of curtesy, and upon surviving his wife, he would be entitled to an estate by the curtesy consummate1—that is, a freehold estate in possession for the remainder of his life; and I made the .queen, Can a wife who has not borne her husband a child defeat his possible right to inchoate curtesy, and, ultimately, consummate curtesy, by reason of the involuntary sale of her land under process, producing surplus money, which money retains its character as land for the purpose of succession? As I remarked (at p. 307), I am just as unable to understand why the husband of a woman who has not borne him a child has not a contingent estate in remainder in her lands as Vice-Chancellor Stevens was unable to understand why a husband, after issue born alive, has not a vested estate in remainder in his wife’s land, and, for the reasons given in. that opinion, I hold that William Riley’s right to possible succession to her interest in this fund for his life if she predeceases him, provided they have a child born alive, is not to be defeated by the sale in partition, and, therefore, the fund will have to be conserved and protected so as to be available to meet the husband’s ultimate estate by the curtesy therein, if it ever becomes consummate.

She could not convey her land so as to defeat this right without his joining her in the conveyance, and, equally, an involuntary conveyance of her land by process of law should not operate to defeat it.

It was stated on the argument and is uncontradicted that William and his wife, Katie, have lived separate and apart for several years; that no child has been bóm of their marriage; that Katie is past forty years of age and her husband is about forty-seven years old; and it is argued that the probability of issue is remote even if they should live together again, and that therefore the husband can have no appreciable interest in the fund belonging to his wife. This is non seqvMur.

There is no time in the life of a woman, no matter what her age, when she is presumed in law to be unable to conceive and bear children. Sir William Blackstone says that a possibility of issue is always supposed to exist unless extinguished by the death of the parties, even though they be each of them a hundred years old. 2 Bl. Com. 125. See also 1 Wash. R. P. § 202; 2 Pres. Est. 395.

Vice-Chancellor Stevenson (In re Staheli, 78 N. J. Eq. 74) said (at p. 77) that in that case there had. been no issue of the marriage and that it was apparent that there would be none. The facts upon which that inference was based are not disclosed. And Vice-Chancellor Howell (In re Riva, 83 N. J. Eg. 200, at p. 205), speaking of In re Staheli, said that the report in that case showed that there were no- children, nor any likelihood of any, hence the husband had. not and could not get any interest in the wife’s lands. So far as these observations run counter to the ancient and established principle of law just adverted to, namely, that there is im period in the life of a woman when it is presumed that she may not possibly bear children, they must be overruled.

It is also urged on behalf of Katie Riley that she has an inchoate right of dower in the share and interest of her husband in the Randolph tract, and is therefore entitled to have her dower interest protected in the proceeds of the sale oE that tract. That is so, as the premises were sold free from her inchoate dower.

As to both imets.—There was paid into court as the net proceeds of the three-fourths interest in the Randolph tract, which was owned by William Riley, the sum of $994.97. Out of this, one-third must be set apart and invested to secure Katie Riley’s ultimate estate in dower in case she shall survive her husband, the interest to be paid to him during their- joint lives. Partition act, Comp. Stat. p. 3909 § 39. Out of the balance there must be paid the claim fixed by the judgment recovered by the executors of Orams against the executor of Ann Riley, amounting to $46.08, with interest thereon. The balance will be paid to William Rilej1', the devisee of Ann Riley, and owner of the share. There was paid into court as the net proceeds of the one-half interest in the Wharton, tract, which had been owned by William Riley, but was owned by Katie Riley at the time of sale, the sum of $1,326.62. This entire sum must be set apart and invested to secure his ultimate estate by the curtesy, if that shall become consummate by the birth of issue to William Riley and Katie, his wife, and her death in his lifetime, the interest to be paid to her during their joint lives.


text:
    Frederick W. Turney, petitioner, v. Minnie M. Avery, otherwise Minnie M. Turney, defendant.
    [Decided May 9th, 1921.]
    1. Want of power for copulation is impotence, but mere sterility is not.
    2. The procreation of children is one of the ends of matrimony—in fact the most important one; and when a woman, knowing herself to be barren and incapable of conceiving and bearing children, does not disclose that fact to her intended husband, he, upon discovering such sterility after marriage, may bring suit and obtain a decree for annulment on the ground of fraud under the general equity jurisdiction of the court of chancery dissociated from its statutory power to annul for,' specified cause.
    3. A decree nisi is the first decree in nullity as well as divorce suits.
    On petition for annulment of marriage. On final hearing ex parte.

      Mr. William L. Brunyate, for the petitioner.
   Walker, Chancellor.

The petition is one for annulment of marriage on two grounds — (1) impotence, and (2) fraud in the contract. The impotence charge is that the defendant had had a surgical operation performed upon, her whereby her ovaries had been removed. The sterility resulting from this the petitioner called impotence, but in law it is not. The doctors who were called testified that the defendant was capable of having sexual intercourse, and the husband testified that he had had such intercourse with her on several occasions. In Kirschbaum v. Kirschbaum, 111 Atl. Rep. 697, I decided that want of power for copulation is impotence, but that mere sterility is not. No relief can be accorded on this score.

As to fraud: The allegation is that the defendant failed to disclose to the petitioner the fact, which she knew, that she was sterile and could not conceive and bear children, and this was proved. It was discovered by the petitioner after marriage. This was a fraud in the contract of marriage affecting an essential of the marital relation. Bolmer v. Edsell, infra.

Ford Penzance has observed that the procreation of children is one of the ends of marriage. See Bolmer v. Edsall, 90 N. J. Eq. 299 (at p. 303). I do not hesitate to say that it is the most important object of matrimony, for without it the human race itself would.perish from the earth.

Some women are congenitally, and others traumatically, barren. The former may never discover the fact until after a fruitless marriage. But when a woman knows that she has been made barren by a surgical operation.she is under a legal duty to disclose the fact to an intended husband, so that, if he then marries her, he will be consenting to the situation that will frustrate his natural hope of posterity, and he would not be heard to repudiate the marriage which his conduct had rendered unavoidable, although if his knowledge had been acquired subsequent to the ceremony, he could have avoided it.

False pretences are of two kinds—suggesKo falsi, or affirmative false representation, and swppressio veri, or withholding the truth when it should be uttered. In Nicholson v. Janeway, 16 N. J. Eq. 285, it was held that undue concealment of a fact to the prejudice of another, which one party is bound in conscience and duty to disclose to the other, and in respect to which he cannot innocently be silent, constitutes a fraud against which equity will relieve. See also Conover v. Wardell, 22 N. J. Eq. 492; Keen v. James, 39 N. J. Eq. 527, 540.

The fraud in the case at bar is of the latter sort—that is, suppressio veri; and as it affected an essential of the marital relation the injured parly is entitled to be relieved by annulment of the marriage in this 'court under its general equity jurisdiction dissociated from its statutory power to annul for specified cause. Bolmer v. Edsall, supra.

Annulment for fraudulent concealment will be accorded the petitioner. A final decree is no longer granted in the first instance. There must be a decree nisi. P. L. 1916 p. 109; Bolmer v. Edsall, supra (at p. 313); Ysern v. Horter, 91 N. J. Eq. 189.


text:
    Lillian Olson, petitioner, v. Angelo Piazza, defendant.
    [Decided May 20th, 1921.]
    A. suit for annulment of marriage was commenced by a feeble-minded woman, not found to be a lunatic on inquisition, upon the ground that she was of unsound mind and did not have capacity to give consent to the marriage; and her mental incapacity has persisted ever since. The-defendant not appearing, the cause was prosecuted eso parte, and was referred to a special master who has reported in favor of a decree of nullity.—Held, that petitioner did not have capacity to instruct solicitors to bring the suit. Held, further, that the cause will be stayed to allow some proper person to come forward and apply to be appointed next friend of the petitioner to further prosecute her suit.
    On petition, &c. On final hearing for annulment of marriage-ex parte.

      Messrs. Pomerehne & Laible, for the petitioner.
   Walker, Chancellor.

The petition in this case alleges that on August 5th, 1920, a form of ceremony of marriage took place between the petitioner and defendant in the city of New York; that at that time the-petitioner was incapable of consenting thereto, being a person of feeble and unsound mind, bereft of reason to truly comprehend the nature of the marriage contract and deprived of will to give-intelligent consent thereto. Further on in her petition she alleges that her mind “is as immature as that of a young child, susceptible to any influence or persuasion on the part of another, depriving her of the power of deliberation and choice,” and that she has been since childhood, and still is, under the care and treatment of physicians. The proofs which- have been taken before a special master sustain these allegations. She has not been found to be a lunatic on inquisition.

The master’s report being presented to me for review and determination as to whether or not a decree nisi should be granted, the question at once presented itself as to whether or not this suit was providently brought, and, upon careful consideration, I am obliged to say that it was not.

A solicitor can no more obtain authority from a person non compos mentis to commence a suit than he could obtain authority from an infant to acknowledge service of a subpoena and defend a suit. Bunting v. Bunting, 87 N. J. Eq. 20.

In Norcom v. Rogers, 16 N. J. Eq. 484, Chancellor Green held that a lunatic sues only by his committee or guardian, or in certain cases by the attorney-general or next friend; that the right of appearing and prosecuting or defending any action in any of the courts of this state iñ person or by solicitor or attorney is expressly limited bjr statute to persons of full age and sound, memory; that a bill exhibited by a person of unsound mind must have been filed without authority of law, and should, therefore, be taken from the files. See also Collins v. Toppin, 63 N. J. Eq. 381; Kroehl v. Taylor, 69 N. J. Eq. 525.

In Collins v. Toppin, supra (at p. 383), Vice-Chancellor Pitney held that in the case of an infant or lunatic suing by a next friend, no authority, for obvious reasons, can'be presumed, and the next friend must have the leave of the court manifested b3r an order made by the chancellor.

It appears upon the facts in the petition before me that the petitioner, although of age, was as much incapacitated from giving authority to file the petition as she was from giving consent to the marriage which in form was solemnized between her and the defendant, and which the petition seeks to annul.

As the defendant has not appeared and moved to take the bill from the files, the court itself must now interfere upon the principle that in ex parte- cases the court represents the absent defendant to the extent of seeing to it that no judgment shall pass against him unless the adversary party is strictly entitled thereto. In re McCraven, 87 N. J. Eq. 28, 32. The order of reference in this case was inadvertently made, and, had the petitioner’s want of capacity been made known to the court at the time that the order was applied for, the cause would have been arrested then.

Notwithstanding the defect in the proceeding, the order of reference need not necessarily be vacated and the petition dismissed, for, in Lamb v. Lamb, 23 Atl. Rep. 1009, an aged person of feeble mind brought suit, and after all the testimony in the case was produced, the defendant for the first time moved for an order to take the bill from the files; and the court held that when a complainant, not an idiot or lunatic, but aged and feeble minded, is permitted to proceed with her suit until her testimony is all produced before any objections are made for want of proper parties, the bill will not be dismissed, but a next friend will then be appointed.

Whoever instructed the solicitors of the petitioner should have come forward and asked to be appointed next friend for the purpose of bringing the suit. The petitioner, herself, was incapable of properly instructing them. In Norcom v. Rogers, supra, the complainant had been found to be a lunatic upon inquisition. Neither in Collins v. Toppin, nor in Kroehl v. Taylor, supra, had the incapacitated party been found to be a lunatic by inquisition, and the latter cases stood before the court in the same situation as this one.

The cause will be stayed to allow some proper person to come forward and apply to be admitted as next friend to further prosecute the suit.


author: Leaking, Y. O.

text:
    Ventnor City v. J. Harry Fulmer et al.
    [Submitted March 14th, 1921.
    Decided March 24th, 1921.]
    1. A mandatory injunction will not be issued to require the removal of a structure'built by defendants on their own lots, but closer to. the lot line than' is permitted by the municipal ordinance, even though the ordinance is a reasonable one ,to afford' protection from fire, since, except for the ordinance, the structure was a lawful one, and-not a nuisance, and the púrpose of the injunction was only to enforce the ordinance.
    2. Equity will not enforce the penal laws of the state or the ordinances of municipal corpiorations by injunction unless the act sought to be restrained is a nuisance.
    On final hearing.on bill for injunction.

      Mr. John 8. WestcoUj for whom appeared Mr. Harry R. Coulomb, for the complainant.

      'Mr. Theodore W. Schimpf, for whom"appeared Mr. William Rimer Brown, for the defendants. '
   Leaking, Y. O.

The primary question in this suit is one of jurisdiction.

An ordinance of complainant municipality forbids the erection of buildings within specified distances of the side lines of lots and provides a penalty for its violation. The provisions of the ordinance may be conceded to be reasonable and consistent with its purpose1 to afford protection against fire.

Defendant has clearly violated the ordinance. By the bill filed herein the municipality seeks mandatory relief by injunction to compel defendant to remove the offending part of the structure.

The want of jurisdiction of a court of equity to award to the municipality the relief sought would seem almost too well settled to warrant extended discussion.

The structure complained of is not a nuisance in itself. It is a structure erected by defendant upon his own land which, but for the ordinance, would be a lawful use which he could make of his own property without, invasion of the rights of others. 'The structure can only be considered unlawful or as in the nature of a nuisance because it is violative of the terms of the municipal ordinance.

The situation thus presented is purely an appeal by a municipality to a court of equity for the enforcement of its ordinance by process of injunction.

It can probably be asserted with a reasonable degree of confidence that no authority can be found in this state or elsewhere affording substantial support to complainant’s claim. The precise question here presented has been before the courts of our sister states repeatedly and with apparent uniformity resolved against the jurisdiction of a court of equity to intervene in behalf of the municipality in such circumstances. Town of Rochester v. Walters, 27 Ind. App. 194; Mt. Vernon National Bank v. Sarlls, 129 Ind. 201; Kaufman v. Stein, 138 Ind. 49; Hudson v. Thorne, 7 Paige (N. Y.) 261; Manchester v. Smyth, 64 N. H. 380; Village of St. John v. McFarlan, 33 Mich. 72; Village of Waupun v. Moore, 34 Wis. 450. In-the case last cited the ordinance specifically provided that it should be enforced by injunction.

The general doctrine is, as tersely stated in Hudson v. Thorne, supra, that “it is no part of the business of this court to enforce the' penal laws of the state or the by-laws of [municipal] corporations by injunction, unless the act sought to be restrained is a nuisance.” This statement of the rule is in harmony with the decisions in this state. Green v. Piper, 80 N. J. Eq. 288, and cases cited on p. 290.

A decree will be advised dismissing the bill.