author: Berry, J. S. C.

text:
    W. LINCOLN TAYLOR, PLAINTIFF, v. ROBERTA MORRIS, ET ALS., DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided October 27, 1948.

      Mr. Isadora H. Hermann, for plaintiff.

      Mr. Wilfred B. Wolcott, for defendants and counterclaimants Roberta Morris Rossiter, Mary Blake Lee, guardian, &c.

      Mr. John J. Crean, for defendant City of Camden.
   Berry, J. S. C.

This is a suit to foreclose a certificate of tax sale. The facts have been stipulated. The property involved is known as 94 East State Street, Camden, New Jersey, and consists of a lot of land on which is erected a two-story brick dwelling house. It was sold to the City of Camden for delinquent taxes for 1928 to 1933 inclusive, amounting, with costs, to $460.39, on March 21, 1934, and the certificate of sale was duly recorded in the office of the register of deeds of Camden County. At that time the defendant Roberta Morris Rossiter was the record owner of the property, and she still is such owner. In July, 1936, the City of Camden entered into possession of the premises and it is stipulated that up until February 19, 1946, the city collected rents therefrom which, with interest thereon, amounts to $2,221.38, against which the city is entitled to a credit for taxes in the sum of $1,624 and for interest in the sum of $597.38, or a total credit of $2,221.38, the exact amount collected. While the coincidence of amounts seems strange, such is the stipulation. On the latter date, the city assigned said certificate to the plaintiff W. Lincoln Taylor, Who then paid the city $1,066.24 which it claimed to be due for unpaid taxes, etc., including the first quarter of 1946. During the period that the City of Camden was in possession it expended for necessary repairs to the property the sum of $882.52. Of this sum $525.32 was expended after May 2, 1942, the effective date of chapter 54, P. L. 1942 which restored to municipality-purchasers at tax sale the right of possession which existed under chapter 237, P. L. 1918, sec. 34, p. 892, but which right was abolished by chapter 169, P. L. 1929 (R. S. 54:5-50). See Forster v. Davenport, 16 Atl. (2d) 614, 616; Taylor v. Borgfeld, 50 Atl. (2d) 654. Also, of this sum of $882.52, $269.65 was expended after October 10, 1939, the effective date of chapter 362, P. L. 1939, p. 870 (the “Stout Act) which gave a municipality the right to apply to the Court of Chancery for the appointment of a receiver to collect rents of properties on which taxes were more than six months in arrears. Under that act a receiver so appointed could, by order of the court only, apply rents to expenses such as necessary repairs; but in the instant case no application for the appointment of such a receiver was made by the City of Camden. Consequently, the possession of the city during this period was not by statutory authority. The balance, or approximately $88.00, was expended between July, 1936, and October 10, 1939, and of course, during this period there was no statutory authority for possession or expenditures for repairs. The rights of holders of municipal liens arise solely out of and are fixed and determined by statute. Absecon Land Co. v. Keernes, 101 N. J. Eq. 227, 231; Forster v. Davenport, supra; Reconstruction Finance Corporation v. Haag, 40 Atl. (2d) 801, 803; Taylor v. Borgfeld, supra.

After the assignment of the certificate of tax sale to the complainant on February 19, 1946, he went into, possession and collected rents up to and including March 9, 1948, to the amount of $432, but made no expenditures for repairs. He concedes the defendant owners right to a credit of this amount on taxes paid or assumed by him.

The defendant Roberta Morris Rossiter, the record owner of the premises here involved, answered the complaint denying that there was anything due the plaintiff, and filed- a counterclaim against him and the City of Camden wherein she demanded an accounting of the rents and profits of said premises collected by them since the date of said tax sale. Such accounting i-s included in the stipulation of facts.

The sole issue here involved is whether or not the City of Camden is entitled to credit .in its account for monies spent out of rents collected for necessary repairs. Assuming that it is entitled to such credit, the amount due it for delinquent taxes and interest on February 19, 1946, the date of the assignment to the plaintiff, was $1,066.24, which is the amount paid by him to the city for such assignment. Since that date, the plaintiff has paid for taxes and interest the sum of $183.76 and has collected $432 in rents, $248.24 in excess of taxes paid.

The rights and duties of a holder of a certificate of tax sale in possession of the premises affected thereby are similar to those of a mortgagee in possession. Stewart v. Fair-child-Baldwin Co., 91 N. J. Eq. 86; Merchants’ & Traders’ Realty Co. v. Stern, 101 N. J. Eq. 629, affirmed 102 N. J. Eq. 290; City of Asbury Park v. Ehrlich, 25 N. J. Misc. R. 367. And the duties of a mortgagee in possession are those of a prudent owner. Merchants’ & Traders’ Realty Co. v. Stern, supra; City of Asbury Park v. Ehrlich, supra, and cases cited.

Under the statutes and decisions above referred to I have no hesitancy in saying that the City of Camden is entitled to a credit against rents collected of that portion of its expenses for repairs incurred after May 2, 1942, the effective date of chapter 54, P. L. 1942, which amounts to $525.32; and that the defendant owner is entitled to a credit of $248.24 representing the excess of rents collected by the plaintiff over taxes and interest paid by him. This credit of $525.32 to which the city is entitled leaves the sum of $540.92, the balance of the sum of $1,066.24 after such credit, subject to adjudication. It is clear that there was no statutory authority for the expenditure of that amount, but it is argued that it is the public policy of this State to permit such expenditure by a municipality in possession under a certificate of tax sale. The answer to that is that the right of possession of such a municipality as it existed under the 1918 Tax Act was taken away by chapter 169, P. L. 1929, and this act of the Legislature indicates a contrary policy. The question then is, whether one wrongfully in possession who collects rents is justified in applying such rents to the payment of the cost of necessary repairs .without which the rents might not have -been collected. This question should be governed by the principles applicable to a constructive trustee, or an administrator or executor de son tort. Without a doubt, the city became a constructive trustee of the premises when it unlawfully entered into possession. A trustee (constructive or otherwise) is under a duty to protect the trust property by paying taxes thereon and to expend trust funds or the income therefrom in keeping the buildings in repair. 2 Scott on Trusts, 174, 176; his duties are much the same as those of a mortgagee in possession, i. e., of a prudent owner. Also, his duties and liabilities are analogous to those of an administrator or executor de son tort, who is subject to all the liabilities of an ordinary administrator or executor without being entitled to any of his privileges. “He may use proper means to protect the assets of the estate, and may recover necessary expenses incurred, but is not entitled to commissions for his services.” 34 C. J. S., Title Executors and Adnunistrators, sec. 1065. And, see, Restatement, Trusts, vol. 1, sec. 245, sub-sec. 2, p. 758, and Comment, p. 760, which reads as follows:

“c. Benefit conferred. If the trustee exceeds his powers in incurring an expense and thereby confers upon the trust estate a benefit, the trustee is ordinarily entitled to indemnity to the extent of the value of the benefit conferred. If such indemnity were not allowed, the beneficiary would be unjustly enriched at the expense of the trustee.”

Also, see De Concillio v. Brownrigg, 51 N. J. Eq. 532.

The stipulation of facts is silent on a number of points, but as the tax sale was in 1934 and the city took possession in 1936, and it or its assignees continued in possession until the bill to foreclose the tax certificate was filed, the inference that such possession was with the knowledge and acquiescence of the defendant counterclaimant is justifiable. Even a mere trespasser who applies rents for the benefit of the owner may be excused of his trespass by the owner’s acquiescence. Hendrickson v. Dwyer, 70 N. J. Law 223. And, as the defendant owner here has received full credit for all of the income from the property, either by application to the payment of taxes as they accrued or to the cost of repairs, I can not see where she has any cause for complaint. No damage has resulted to her by reason of such possession by the -city and its assignee — on the contrary, she has been benefitted. It is also a justifiable inference that the city took possession in good faith believing it had the right to do so, and, a-s it was the holder of the tax title, such entry into possession was under some color of right. I have no doubt but 'that the City of Camden officials believed they were acting pursuant to a legal right. True, the statute giving such right of possession had been repealed, but evidently the officials in charge of this affair were ignorant thereof. While technically the city and its assignee were trespassers, there was no wilful or intentional wrong done by either, and the defendant owner has not been harmed. We may also justifiably infer, from the circumstances, that in 1936, and for some time thereafter, the owner thought the value of the property did not justify her in redeeming it, and that in view of a_ better real estate market today she has concluded 'that its redemption will be profitable, especially if she can saddle on the city the expense of the repairs thereto which were evidently necessary to insure an income therefrom. After all, this is a ■court of equity, and the defendants seeking equity by way of redemption, must do equity, and no less than full compensation for such repairs will do equity to the city.

I am also of the opinion that the defendant-counterclaimant, Roberta Morris Rossiter, is guilty of laches in not having taken proceedings for re-possession of the premises during the time she alleges the City of Camden was in unlawful possession. It is -too late now for her to complain. She stood by for 12 years, without objection, while the challenged expenses were incurred by the city for the benefit of her property, although she must have known that the city was in possession and collecting the rents. To grant her the relief she now asks will unjustly enrich her at the expense of the city.

The counterclaim against the City of Camden will be dismissed, but counterclaimant is entitled to a judgment allowing her a credit of $248.24, being the excess of rents over taxes paid by him, on the amount of $1,066.24 which he paid 'to the City of Camden for the assignment of the certificate of tax sale. The amount which the defendant owner will be obliged to pay the plaintiff for redemption is $818.00, plus taxes paid by him in addition to those shown in the stipulation, and minus additional rents collected.

Judgment will be entered accordingly.


source: Caselaw Access Project

author: Stein, J. S. C.

license: Public Domain

text:
    THE MORRISTOWN TRUST COMPANY, AS SUBSTITUTED TRUSTEE UNDER THE WILL OF KATHARINE BRINLEY HUNTINGTON, DECEASED, PLAINTIFF, v. PROTESTANT EPISCOPAL CHURCH IN THE DIOCESE OF FLORIDA, AND OTHERS, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided November 1, 1948.

      Messrs. Mills, Jeffers and Mountain (Mr. Worrall F. Mountain, Jr. appearing), for plaintiff.

      Messrs. Martin & Reiley (Mr. William H. Corbin appearing), for defendant Protestant Episcopal Church in the Diocese of Florida.

      Messrs. Long and Oram (Mr. George S. Oram appearing), for defendants Mary Brooks Whittemore, Emily Morgan Crosby, Anne Huntington O’Donnell and Frances Huntington LeBouvier.
   Stein, J. S. C.

Plaintiff, The Morristown Trust Company, as substituted trustee of the trust created under the will of Katharine Brinley Huntington prays the court to construe the codicil to the last will and testament of the decedent and to advise whether under the circumstances the court will exercise its equitable power cy pres and direct plaintiff as to the manner in which the trust shall hereafter be administered.

Decedent died February 23, 1902, and the codicil to her will duly probated provides:

“I, Katharine Brinley Huntington, of Huntington, Florida, being in full possession of my faculties will and. bequeath the sum of Five thousand dollars (say $5,000.) to be used for the GLORY OF GOD and support of ALL SAINTS CHURCH, Huntington, Florida, & in memory of my beloved sister Elizabeth Wilson, as follows, namely that this sum 'be suitably invested and that of the annual interest a sufficient sum shall be used first to pay the fire insurance on the church and contents and to keep this house of God and its grounds in thorough repair and good condition, this matter having been neglected by the Church authorities, "also such sum as my appointed Trustees shall direct may be used for the benefit of the Sunday 'School attached to this Church, of the remaining interest a suitable sum shall be paid to the pastor, or minister appointed to conduct the services in connection with this Church, and in the event of no services being held regularly my trustees shall have the power to withhold and I direct them to withhold this salary until such time as the services shall be resumed, or to pay in such proportion as they shall see fit. In-the event of fire or any other element destroying the Church or part of it, the amount shall be withheld until the Church or such part is rebuilt, and if however the Church or part of it is not rebuilt for a period of five years this bequest shall lapse and the sum revert to my estate.”

After the death of the testatrix income from said trust was from time to time paid to All Saints Church pursuant to the terms of the trust until about the year 1943 when the church building theretofore located in Huntington, Florida, and used by the Episcopal congregation in that community was physically removed to Murray' Hill, a suburb of Jacksonville, Florida. Plaintiff being advised of this fact no longer made payments of income from the trust to anyone. Huntington and Murray Hill are approximately 60 miles apart. The removal of the - church building was occasioned by the fact that all families of the Episcopalian communion had departed from Huntington, a community of about 200 persons and Murray Hill was the site chosen because of the needs of the Episcopalian community for a place of worship. The church located in Murray Hill is being used by an Episcopal body known as St. Stephens’ Mission. The Protestant Episcopal Church in the Diocese of Florida holds legal title to the land upon which the church building stood at Huntington, as well as the land on which the building stands in Murray Hill and administers the affairs of the Episcopal congregations within this Diocese, including the former congregation at Huntington and the present one at Murray Hill.

The defendants, Mary Brooks Whittemore, Emily Morgan Crosby, Anne Huntington O’Donnell and Frances Huntington LeBouvier, who are the residuary legatees under the will of decedent contend that the charitable purposes of the trust have become impossible of performance, and that consequently the corpus of the trust, together with accumulated income, reverts to testatrix’ residuary estate and should be administered by plaintiff accordingly. The Protestant Episcopal Church in the Diocese of Florida takes the position that while the trust was established by the decedent for the purpose of preserving the church building in Huntington, Florida, the real object of testatrix’ bounty was the carrying on in a suitable manner of the worship and services of the church of which decedent was a devout member, and that by the application of the equitable doctrine of cy pres this defendant is entitled to receive the income from the trust thereby created to support and maintain St. Stephens’ Mission in Murray Hill where the oiiginal church building of All Saints Church is now located, and to support and maintain the church building of the Mission of the Holy Comforter at Crescent City, and to support the organized missions generally in the Diocese of Florida.

When a gift for charitable uses can no longer be administered in exact accordance with the intention of the donor, this Court has the undoubted power, under its general equity jurisdiction, to direct that the gift be administered cy pres — that is, as nearly as possible in conformity with the intention of the donor. MacKenzie v. Trustees of Presbytery of Jersey City, 67 N. J. Eq. 652, 61 Atl. 1027; Brown v. Condit, 70 N.J. Eq. 440, 61 Atl. 1055; Larkin v. Wikoff, 75 N. J. Eq. 462, 72 Atl. 98, affirmed 77 N. J. Eq. 589, 78 Atl. 1134.

“Where a testator has two objects in view, one primary or general and the other secondary or particular, and these are, literally speaking, incompatible, the secondary object must be sacrificed in order that effect may be given to the general object. Where the will exhibits an intention that the donation shall be devoted to a specific charitable purpose and prescribes a particular mode or means by which the purpose shall be carried out, the failure of the mode or means, after the donation has taken effect, will not defeat the charitable purpose. The specification of the manner of doing the thing often is only directory, and the implication, in such case is that the donor has intended that his purpose shall, if necessary, be effectuated in some other way. This is not substituting a different charity for the one which the donor founded and which has failed, but it is carrying out the donor’s general intention by the use of means other than those specified by the donor, when the specific means have become impracticable. MacKenzie v. Trustees, supra; Brown v. Condit, supra.” In re Young Women’s Christian Asso., 96 N. J. Eq. 568, 574, 126 Atl. 610.
“The doctrine of oy pres is therefore the doctrine of nearness or approximation * * * in the law of charitable trusts, where gifts havo been made for charitable purposes which, either originally or in the course of time, cannot bo literally executed. * * * yje gift wjn be administered, as nearly as may be, according to the donor’s purpose, under general rules of law. * * MacKenzie v. Trustees, etc., supra.

“And it is to be remembered” quoting Chief Justice Beasley in Hesketh v. Murphy, 36 N. J. Eq. 304, 309, “that it is the acknowledged doctrine that in all matters of construction courts are bound to lean in favor of charity rather than against it.”

What the testatrix had in mind was to create a trust “for the Glory of God.” That was her primary and dominant intention. I doubt not that had testatrix foreseen that the church building located at Huntington would at some future time be removed from Huntington to Murray Hill to meet the needs of the Episcopalian members of that community for a place of worship that she would have provided for the continuance of the trust at that place. The gift should not be held to lapse and thus defeat the primary intention of the testatrix.

It is concluded that under a proper construction of the codicil to the will of decedent and by the application of the equitable doctrine of cy pres, the Protestant Episcopal Church in the Diocese of Florida is entitled to the income from the trust created to support and maintain St. Stephens’ Mission in Murray Hill where the original church building of All Saints Church formerly located at Huntington is .now located, and for the support of the organized” missions generally of the Protestant Episcopal Diocese of Florida. Thus the trust will be continued for the use for which the testatrix intended it.

Judgment in accordance herewith.


text:
    ALEXANDER K. LAWRENCE, ET ALS., PLAINTIFFS, v. THE WESTFIELD TRUST COMPANY AND LOUIS LAWRENCE, TRUSTEES OF THE ESTATE OF MARIE DePUI NORTON, ET ALS., DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided November 8, 1948.

      Messrs. McKirgan & Gilson (Mr. Elmer McKirgan appearing), attorneys for plaintiffs.

      Messrs. Beard and McGall (Mr. William M. Beard appearing), attorneys for defendant, The Westfield Trust Company, substituted trustee.

      Mr. J. Albert Homan, attorney for guardian ad litem.

   Stein, J. S. C.

This complaint is brought for construction of the last will and testament of Marie DePui Norton and for judgment as to whether the release executed by Louis Lawrence, life tenant, of his life estate, had the effect of accelerating the trust and immediate distribution of the corpus of the trust to the remaindermen.

Marie DePui Norton died testate, a resident of the Township of Cranford, Union County, New Jersey, in 1922. Her last will and testament was admitted to probate by the Union County Surrogate on May 20, 1922, and letters testamentary were issued to Solon Lathrop Norton, the decedent’s husband, who- was named as the executor and trustee therein. The said Solon Lathrop Norton died on October 28, 1922, whereupon the Cranford Trust Company was appointed administrator with the will annexed. On February 9, 1923, the Cranford Trust Company was relieved of its duties as administrator c. t. a., and letters of substituted administration were issued to Louis Lawrence, a son of the testatrix, and to the Westfield Trust Company. The substituted administrators qualified as trustees and are administering the estate in that capacity.

Under the fourth paragraph of her will, the testatrix bequeathed all the rest, residue, and remainder of her estate to her executor and trustee therein named, to pay one-half of the net. income therefrom to her husband, Solon Lathrop Norton, for life, and the remaining half to her son, Louis Lawrence, for life and further directed that should her husband, Solon Lathrop Norton, die before her said son then all of the net income from the estate was to be paid to her son. In' the event of the death of her said son leaving lawful issue him surviving, then the share of the income which he would have received if living was by her will to be paid and divided among said issue, share and share alike. Upon the death of both her husband and son, testatrix devised all of her property to the lawful issue of her son, to be divided among them share and share alike.

Solon Lathrop Norton died October 28, 1922. The son, Louis Lawrence, at the time of the filing'of the? bill of complaint was 76 years of age. He has five children, Stuart N. Lawrence, Alexander K. Lawrence, Robert L. Lawrence, Marie L. Loblein, and Solon L. N. Lawrence. The said Louis Lawrence also has five grandchildren, who are infants, and for whom I. Grant Scott, Clerk, was appointed as guardian ad litem.

On November 18, 1946, Louis Lawrence, the surviving life tenant, executed an instrument purporting to be a release of any right, title, and interest that he might have in the life estate created under the testatrix’ last will and testament.

The word “issue” as used in a will may be given its ordinary meaning or may be given a more restricted meaning. In its ordinary sense, the word “issue” includes grandchildren and remoter descendants as well as -children, but where 'it is apparent from the will that the testator intended that the word be given a restricted meaning that intention will be attributed to the word.

In Pierson v. Jones, 108 N. J. Eq. 453, the rule is expressed as follows:

“The correct rule is well stated by Chancellor Magie in Inglis v. McCook, 68 N. J. Eq. 27 (at p. 39), as follows:
‘But when used in a will a more restricted meaning may be attributed if, from the terms of the testamentary disposition, it clearly appears that the testator used the word in a particular meaning less general than its ordinary meaning. * * *
‘To properly pursue this inquiry, it is obvious that we must start with the assumption that the testator used the word in its ordinary signification. We must then examine the whole will, and we will not be able to attribute to the word a more restricted meaning unless we find in the will itself dear indication that the testator used it in this case in such restricted meaning.’ ”

Where the testamentary disposition provides for issue to take the share their parent would have taken if living, the word “issue” will be given its restricted meaning because such a disposition suggests that the testator in using the words “their parent” referred to children only as issue. Central Hanover Bank & Trust Co. v. Helme, 121 N. J. Eq. 406, 190 Atl. 53.

In In re Fisler, 133 N. J. Eq. 421 (E. & A.), the court at page 423 stated:

“If not restrained by the context, the word ‘issue’ is synonymous with descendants. It is nomen generalissimum; and, in its primary, technical sense, it signifies grandchildren and all remoter descendants, and the distribution is per capita and not per stirpes. Weehawken Ferry Co. v. Sisson, 17 N. J. Eq. 475 ; Dennis v. Dennis, supra [86 N. J. Eq. 423]; Coyle v. Coyle, 73 N. J. Eq. 528; Inglis v. McCook, 68 W. J. Eq. 27. It is a rule of construction designed to advance and not defeat the testamentary object. If there be nothing more in a will touching the construction of the term ‘issue’ than a ‘direction that the issuo are to take the shares of their parents, that is enough to confine the general meaning of the word “issue” to the particular meaning of children of that parent.’ Pruen v. Osborn, 11 Sim. 132. To the same effect is Lehigh v. Norbury, 13 Ves. 340. See, also, Sibley v. Perry, 7 Ves. 522.”

In Fidelity Union Trust Co. v. Graves, 139 N. J. Eq. 571, at 582, the rule is stated as follows:

“The rule as to the meaning of the word ‘issue’ as stated in the cited cases is divided into two general rules: first, that it means descendants of every degree, and second, that distribution is per capita rather than per stirpes. Both branches of the rule are subject to the same qualification, that a different result will be reached if such was the intention of the testator. In the present case if the word ‘issue’ were to be treated as an isolated word without reference to the other provisions of the will, it might have the meaning attributed to it in the cited cases, but it cannot be treated as an isolated word and the question is whether a more restricted meaning must be attributed to the word, either as to the persons contemplated within the description or as to the manner of distribution, in order to carry out the plan and intention of the testator as expressed in the will as a whole.”

In the instant case, the testatrix bequeathed the residue'of her estate upon the death of her husband and son “unto the lawful issue of my said son, to be divided among them share and share alike.” It is evident therefore that the testatrix intended that the word “issue” be given its general meaning, and that it means'descendants of every degree of her son, Louis Lawrence, and the word cannot be given its restricted meaning. The “lawful issue” of the testatrix’ son, Louis Lawrence, includes not only his children but also grandchildren'.

There can be no doubt but that the bequest to' the lawful issue of the testatrix’ son under the seventh paragraph of her will vested immediately upon her death. This gift comes clearly within the principles enunciated by Vice-Chancellor Jayne in Simpkins v. Simpkins, 131 N. J. Eq. 227, 24 Atl. (2d) 821, wherein he stated that where there is a testamentary gift of a life estate and a gift of the remainder after the termination of the life estate, the gift in remainder will be deemed vested immediately in the absence of some controlling equity or some evidence in the will from which a different intent is implied. The policy of the law requires that legacies in all cases shall be deemed to be vested rather than contingent unless such a construction is clearly discordant with the intention of the testator. This rule of construction is always observed where it is apparent from the terms of the will that a future gift is postponed merely to let in some other interest such as a life estate. The future gift is vested although the enjoyment is postponed.

The bequest to the “lawful issue” of the testatrix’ son, Louis Lawrence, constitutes a class gift. A class gift is defined as a gift of an aggregate sum to a body of persons uncertain in number at the time of the gift, to be ascertained at a future time, who are all to take in equal or some other definite proportions, the share of each being dependent for its amount upon the actual number. Clark v. Morehous, 74 N. J. Eq. 658, 70 Atl. 307; The Paterson Savings Institution v. DeGray, 136 N. J. Eq. 371, 42 Atl. (2d) 264; Fidelity-Philadelphia Trust Co. v. Jamison, 137 N. J. Eq. 385, 45 Atl. (2d) 134; Fidelity Union Trust Co. v. Graves, supra.

The same difficulty arises in this case as in all cases involving class gifts in determining at what time the members of the class shall be ascertained and. further who constitute the class. Generally members of the class are determined at the time the instrument of gift takes, effect, and this is ordinarily at the date of the death of the testator, yet there may be provisions in the will which will fix the membership of the class as of the date of the execution of the will or upon the happening of some event in the future. Clark v. Morehous, supra.

In the instant case, the “lawful issue” of the testatrix’ son, Louis Lawrence, cannot be completely ascertained until the time of his death, and although the gift vested.at the time of the testatrix’ death the class must remain open until the death of Louis Lawrence to admit new members, and at that time the class will include all of the descendants of Louis Lawrence who were alive at the death of the testatrix and who subsequently became members of the class before the death of the life tenant.

Under a testamentary gift to “issue,” where the word is used without any terms to qualify its meaning, it is very generally held that the children of the ancestor and the issue of such children, although the parent is living, take in equal shares per capita, and not per stirpes, as primary objects of the disposition. All courts seem to agree in holding that “issue” is a word which lends itself very easily to the expression of representation and that the presumption which favors a per capita distribution yields to a very faint glimpse of a different intention. 57 Am. Jur., Wills, § 1305.

As stated in Fidelity Union Trust Co. v. Graves, supra, where the word “issue” means descendants of every degree, the distribution is per capita rather than per stirpes, and further where there is doubt as to whether the testator meant a per stirpes or per capita distribution the court will adopt a construction in favor of a per stirpes distribution.

In the present case, since “lawful issue” means descendants of every degree of the life tenant, Louis Lawrence, the distribution must be per capita rather than per stirpes. There is no doubt as to the manner in which the testatrix intended distribution, and there is nothing in her will to warrant the court in adopting a construction in favor of distribution per stirpes rather than per capita.

The doctrine of acceleration of remainders has been adopted in New Jersey, and the rule of construction has been established by a long line of decisions.

Vice-Chancellor Learning in Anthony v. Camden Safe, &c., Co., 106 N. J. Eq. 41 (at p. 42), states the rule as follows:

“Although the language of the will refers to the death of the particular tenant as the time for distribution to the remaindermen, it is an established rule of construction of testamentary provisions of that nature that a testator will be presumed to have intended to give the property in remainder from and after the termination of the preceding estate in the absence of some controlling equity or an express or clearly implied provision in the will to the contrary; and accordingly the provisions for distribution at the death of the life tenant, standing alone, will be understood to relate to the termination of the precedent estate and accelerate distribution to remaindermen whose estates in remainder are vested. As specifically pointed out in Sherman v. Flaeh, 283 Ill. 457, and in Holdren, Adm. v. Holdren, 78 Ohio St. 276, this established doctrine proceeds upon the supposition that, although the ultimate devise is in terms not to take effect in possession until the death of the life tenant, yet in point of fact it is to be read as a limitation of the remainder to take effect in every event which removed the prior estate out of the way.”

In addition to the Anthony case, supra, the question of acceleration was presented in each of the following cases,' and upon the facts in each particular case the court therein determined whether or not the corpus of the trust was accelerated: Schmieder v. Meyer, 97 N. J. Eq. 335, 127 Atl. 162; Fisch v. Fisch, 105 N. J. Eq. 746, 155 Atl. 146; In re Nilsson, 112 N. J. Eq. 445, 164 Atl. 578; Bennett v. Fidelity Union Trust Co., 122 N. J. Eq. 455, 194 Atl. 449; Bennett v. Fidelity Union Trust Co., 123 N. J. Eq. 198, 196 Atl. 375; Buhring v. National Standard Co., 127 N. J. Eq. 243, 12 Atl. (2d) 632; Walter v. Thielke, 127 N. J. Eq. 402,13 Atl. (2d) 649; Simpkins v. Simpkins, supra; Young v. Eagon, 131 N. J. Eq. 574, 26 Atl. (2d) 180; Provident Trust Co. of Phila. v. Osborne, 133 N. J. Eq. 518, 33 Atl. (2d) 103.

The rule will be applied and a remainder accelerated in the absence of some controlling equity or an express or clearly implied provision in’ the will to the contrary. Under the last will and testament of the testatrix in this case, the lawful issue of her son, Louis Lawrence, acquired a vested remainder immediately upon her death, and unless some controlling equity or an express or clearly implied provision in the will to the contrary can be found it must be presumed that the testatrix intended to give the property, in remainder from and .after the termination of the preceding estate. Under the terms of the will in question, there is such a contrary intention. The gift to the lawful issue of the life tenant is a class gift, all of the members of which cannot be ascertained until his death. Since the members of the class cannot be completely ascertained until that time, the application of the doctrine and distribution of the estate at this time would negate her testamentary scheme as expressed in the will itself. A present distribution of the corpus of the estate would disinherit grandchildren of the life tenant born between now and the time of his death.

Judgment will be entered in accordance with forgoing conclusions.


text:
    MARGARET RUSSELL HEDGES, PLAINTIFF, v. PHILIP NORMAN RUSSELL, ET AL., DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided November 9, 1948.

      Messrs. Bunker & Elliott (Mr. Horace E. Bunker appearing), attorneys for plaintiff.

      Messrs. McDonough & McDonough (Mr. Andrew L. McDonough appearing), attorneys for defendants.
   Stein, J. S. C.

Plaintiff 'by this suit seeks construction of the last will and testament of Charles Harvey Russell who died on February 3, 1936, and by his last will and testament duly probated by the surrogate of the County of Union pro-' vided as follows:

“FIRST: I appoint my wife, Marion Byrne Russell, my sole executrix and direct her to pay all of my funeral expenses and all of my just debts, from my personal property, which I hereby give and bequeath to her, together with all of my property, both- real and personal, for her sole use during her life and including all of my equity in the capital stock of all Companies, as shown by the certificates in my possession or deposited as collateral for loans, at the time of my death; all bonds and other securities; all of my interest in the property at 953 Kenyon Avenue, Plainfield, Union County, New Jersey, including my automobiles AND accessories and all of my jewelry, silverware and household goods; all of my equity in the Queen City and Home Building & Loan Association, of Plainfield, New Jersey; all of my interest in the lot and buildings, being lot number 25, Block 2, in Westmont Avenue, North Lavallette, Ocean County, New Jersey and all furnishings therein; all funds deposited with the State Trust Company, of Plainfield, New Jersey, either in joint account with my wife, Marion Byrne Russell, or in my own name.
“SECOND: I earnestly request my wife, Marion Byrne Russell, at her demise, to bequeath what there is then remaining of the estate as described above, or as it then is, or shall be, as near as possible, to the individuals, then living and in the same proportions, as set forth in the third paragraph of this will.
“THIRD: Should I survive my wife, Marion Byrne Russell, I appoint my son, William H. Russell, my daughter, Margaret Russell Hedges and my son, Philip Norman Russell, my executors and direct them to pay all of my funeral expenses and all of my just debts, from my personal property and dispose of the remainder of my property, both real and personal, as follows, to wit; One fourth to my son, William H. Russell (who is to divide one fourth of his share, equally, among his children, namely, Margaret Russell Ackerman, of Detroit, Michigan; Margaret Russell Bonsor, Junior, and Charles H. Russell Bonsor, of San Francisco, California), one fourth to my daughter, Margaret Russell Hedges, Plainfield, New Jersey, one fourth to my son, Philip Norman Russell, Plainfield, New Jersey, and one fourth to my son Howard Ewing Russell, Plainfield, New Jersey.
“FOURTH: Should I survive my wife, Marion Byrne Russell and my son William H. Russell, I direct my remaining executors to pay all of my funeral expenses and all of my just debts, from my personal property and dispose of the remainder of my property, both real and personal, as follows — one-tenth to be equally divided among the children of my son, William H. Russell, namely, Margaret Russell Ackerman, Margaret Russell Bonsor, Jr., and Charles Russell Bonsor; throe tenths to my daughter, Margaret Russell Hedges; three tenths to my son Philip Norman Russell and three tenths to my son, Howard Ewing Russell.”

The first question to be determined is what estate did Marion Byrne Russell take under the first paragraph of the will? Plaintiff contends that she took an absolute estate in fee simple. The defendants contend that she took a life estate and that the testator died intestate as to the remainder.

The bequest in the first paragraph of the will to Marion Byrne Russell undoubtedly gave her a life estate with an implied power of disposal. The words employed by the testator in creating this estate are specific and simple. He gave his estate to his wife “ * * * for her sole use during her life * * * ." The matter comes squarely within the second rule laid down by the Court of Errors and Appeals in Trafton v, Bainbridge, 125 N. J. Eq. 474, 6 Atl. (2d) 209, that

“ * * * Where the first bequest or devise to A is in terms indicating clearly that only a life estate is intended to be given, only a life estate passes, notwithstanding there be also given to A a power of absolute disposal of the property, even if such power be without any limit or restriction as to the time or manner of its execution, A does not take a fee, but a life estate plus the power of disposal, and a subsequent gift to B, at A’s death, of such part of the property as remains undisposed of, is valid and effective. Pratt v. Douglas, 38 N. J. Fq. 516; Wooster v. Cooper, supra; Weaver v. Patterson, 92 N. J. Eq. 170; Gaston v. Ford, supra.”

The second question to be determined is what disposition does the will make of the remainder of testator’s property? In the second paragraph the testator earnestly requests his wife at her death to bequeath what the're is then remaining of the estate to the individuals then living and in the same proportions as set forth in the third paragraph of his will. Here it is argued that these words are merely precatory and not mandatory. In 40 Cyc. (at page 1404) the following general rule is stated:

“Words in a will which are merely expressive of a desire or intention on the part of the testator, and are merely advisory or precatory in character may be useful in resolving doubts in other parts of the will; but they do not amount to a testamentary disposition, and do not control or alter the express dispositions in the will unless it is apparent that it was the testator’s intention that such words of desire or intention should be mandatory.”

The will under consideration was apparently drafted by one not learned in the law. However, the intent of the testator to dispose of all of his property by his will and not to die intestate as to any part thereof is manifest throughout the will. The third, fourth and fifth paragraphs of the will deal with the disposition of testator’s property in the event that his wife or certain of his children predecease him. Considering the language used by testator in the second paragraph of his will in the light of his whole will, it is concluded that the testator intended to give to his wife the power to dispose of what remained' of his estate by her will to the persons named and in the proportions as provided in the third paragraph of his will.

The third question to be determined is did testator’s wife validly exercise such power of appointment? In the second paragraph of the will testator provides that his wife shall dispose of what remains at her death to the individuals then living as set forth in the third paragraph. The third paragraph of the will names the persons and proportions as follows: One-fourth to testator’s son, William H. Russell, who is to divide one-fourth of his share equally among his three children, Margaret Russell Ackerman, Margaret Russell Bonsor, Jr., and Charles H. Russell Bonsor; one-fourth to testator’s daughter, Margaret Russell Hedges and one-fourth each to testator’s sons, Philip Norman Russell and Howard Ewing Russell.

Testator intended that the portion of his estate to which he made the power applicable should vest subject to the life estate in the persons whom he named, contingent only upon their surviving his wife. He provided that of the share given to his son, William H. Russell, one-fourth was to be divided among his three children. William H. Russell survived the testator but predeceased testator’s wife, and it seems clear that the testator intended that his children should take their share whether or not he was living at the death of the wife. It is true that the will directs the son to make the division among his children but his death will not defeat testator’s intention as to the children. The only effect of his death was to increase the portions of the other beneficiaries.

Testator’s wife died on November 10, 1946, leaving a will dated September 13, 1946, wherein she executed the power of appointment given to her by her husband’s will in the following language:

“Third: All the rest, residue, and remainder of the property and estate, real, personal and mixed, and wherever situate, of which I may die seized or possessed, or to which I may in any wise be entitled, or which I may have the power to dispose of under any will, deed or other instrument, I give, devise and bequeath to those of my said children, Margaret Russell Hedges, Philip Norman Russell, and Howard Ewing Russell, who shall survive me, and to the surviving issue of any of them who shall die before me, in equal shares, per stirpes and not per capita.”

Inasmuch as testator directed his wife to dispose of what remained in his estate to certain named persons, it must be held that the power of distribution which he gave her was limited and non-exclusive, and if one of the persons whom testator’s will directs is to receive part of the estate is omitted, then the power of appointment is not validly exercised. Cameron v. Crowley, 72 N. J. Eq. 681, 65 Atl. 875; Beattie v. Adams, 123 N. J. Eq. 367, 198 Atl. 201. The failure to exercise such power results in the distribution among the persons named and as directed by the will of the donor of the power. Cameron v. Crowley, supra; Beattie v. Adams, supra.

Testator’s wife in exercising the power in her will only included Margaret Russell Hedges, Philip Norman Russell and Howard Ewing Russell, and excluded the children of William Hedges Russell. Therefore the power vested in Marion Byrne Russell was not validly exercised by her and the children of William H. Russell are entitled to share in the estate of the testator with the said Margaret Russell Hedges, Philip Norman Russell and Howard Ewing Russell in the proportions as set forth in the third paragraph of the will.

Upon the death of Marion Byrne Russell, plaintiff was appointed substituted administrator. It is stipulated herein in writing filed that there are no unpaid debts of the estate and so distribution may be made directly to those entitled thereto without the interposition of an administrator with the will annexed. In re Woodruff, 134 N. J. Eq. 299, 35 Atl. (2d) 461.

Judgment in accordance herewith.


author: Grimshaw, J. S. C.

text:
    IN THE MATTER OF THE DISSOLUTION OF COLLINS-DOAN COMPANY.
    Superior Court of New Jersey Chancery Division
    Decided November 15, 1948.

      Messrs. Morrison, Lloyd & Griggs, solicitors for petitioners.

      Messrs. Insley & Decker, solicitors for respondents.
   Grimshaw, J. S. C.

The petitioners seek a dissolution of Collins-Doan Company under the provisions of R. S. 14:13-15 which is as follows:

“Every corporation organized under Title 14 of the Revised Statutes may be dissolved by the decree of the Court of Chancery when it is made to appear that the corporation has an even number of directors who are equally divided respecting the management of its affairs, and.that the voting shares of such corporation are equally divided into two independent ownerships or interests and one-half thereof is owned or controlled by persons favoring the course or views of part of the directors, and one-half is owned or controlled by persons favoring the course or views of the other directors, or that the persons owning or controlling the voting shares are unable to agree on, or vote for, the election of a board of directors consisting of an uneven number, and, in either such event, the holders of shares entitling them to exercise one-half or more of the voting power shall have voted for such dissolution, or shall have agreed in writing thereto, or shall join in filing the petition for dissolution. The petition for dissolution may be filed by one-half of the directors when there is an even number of directors who are unable to agree- as to management, if the holders' of one-half or more of the shares have voted for or agreed in writing to such dissolution, or it may be filed by the persons holding one-half of the voting shares when such persons are unable to agree with the persons holding the other half of such shares ns hereinabove provided. The petition shall be verified by the petitioners or one of them. A schedule shall be annexed to the petition setting forth the name of each shareholder, his address if it is known, or, if it is not known, stating that fact, and the number of shares belonging to him. Such -schedule need not be annexed if the petitioner shall state that he is unable to annex a list of such shareholders. Whenever shares, the holders of which are entitled to petition for dissolution, shall be deposited subject to the control of a committee which is authorized by the deposit agreement to represent depositing shareholders with respect to dissolution proceedings, the petition may be filed by such committee or the majority of the members thereof.
“The provisions of chapter thirteen of Title 14 of the Revised Statutes shall be applicable hereto, except so far as they be inconsistent with the provisions hereof. L. 1938, c. 303, p. 697, sec. 1.”

The evidence discloses a situation for which the statute provides a remedy. The charter of Collins-Doan Company sets forth that the board of directors of the company shall consist of four members, two being elected by the common stockholders and two by the preferred stockholders. By reason of disagreement between the directors, they being equally divided, the board has not functioned since 1936. Collins, who controls the common stock, has run the business as though it were his own private enterprise. He has set salaries, determined business policies and has taken upon himself the responsibility of deciding that dividends should not be paid, all without authority from the board, which was not consulted. Latterly he moved the business from the plant which it owned to a new location in a building owned by his son. All of these activities may have been, as respondents allege, for'the benefit of the company but they were in defiance of the law governing corporate operations and certainly at the expense of the preferred stockholders who have been deprived of dividends. The petitioners, being one-half of the board of directors, and representing one-half of the stock of the company, seek a dissolution of the company under the provisions of R. S. 14:13-15, and the question arises whether the statute is available to them, the jurisdictional facts being present.

Collins-Doan was organized in 1916, under the provisions of the Corporation Act of 1896. In that statute it was provided that before a corporation could be dissolved by act of the parties, the consent .of two-thirds of the stockholders was required. 2 C. S. 1619, par. 31, R. S. Title 14:13. Respondent, Collins, argues that upon the formation of Collins-Doan Company, Collins acquired a vested right in the continued existence of the corporation until two-thirds of the stockholders consented to its termination, excluding of course, dissolution for non-payment of taxes or by reason of insolvency, neither of which latter contingencies is involved here. Respondent says that the provision for dissolution is one which affects the rights of the stockholders as between themselves and, therefore, is a provision with which the legislature may not constitutionally interfere. They conclude that it would be an unconstitutional invasion of private rights to apply the provisions of R. S. 14:13-15 to the Collins-Doan Company.

Petitioners, on the other hand, point to 2 C. S. 1600, par. 4, 5, now appearing substantially as R. S. 14:2-8, 9. These two sections as they appeared in the Compiled Statutes are as follows:

“4. The charter of every corporation, or any supplement thereto or amendment thereof shall be subject to alteration, suspension and _ repeal, in the discretion of the legislature, and the legislature may at pleasure dissolve any corporation.
“5. This act may be amended or repealed, at the pleasure of the legislature, and every corporation created under this act shall be bound by such amendment; but such amendment or repeal shall not take away or impair any remedy against any such corporation or its officers for any liability which shall have been previously incurred; this act and all amendments thereof shall be a part of the charter of every corporation heretofore or hereafter formed hereunder, except so far as the same are inapplicable and inappropriate to the objects of such corporation.”

Petitioners argue that by virtue of the statutory provisions quoted above R. S. 14:13-15 is as much a part of the original charter as though it had been in existence when Collins-Doan Company was formed. They urge that R. S. 14:13-15 is applicable to the Collins-Doan situation.

Section 4 of the Corporation Act of 1896, now R. S. 14:2-9, frequently has been the subject of consideration by the courts of this state. And it is now the settled law of the State that the right 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 respects be impaired except in so far as impairment may result from an alteration required by the public interest. Berger v. U. S. Steel Corporation, 63 N. J. Eq. 809. In that case, however, in commenting on section 5, now R. S. 14:2-8, the court directed attention to the broad language of the section, and said that it was difficult to see how any substantial force could be accorded to the section unless some amendments could be made which might affect the rights of stockholders inter sese to some extent. What the limitation upon the legislative power was the court declined to say since such a determination was not necessary to the decision of the case before it.

Undoubtedly there may be changes so radical that underlying and fundamental principles will not permit the legislature to reserve to itself a right to make them. Whether any change comes within the prohibited class is a matter for determination when the question arises. Berger v. U. S. Steel Corporation, supra.

As has been said so often, corporations are creatures of the State and exist by the grace of the Legislature. The power which gives life to a corporation with the grant of a charter may terminate the corporate existence by a repeal of that charter. That same power may set the conditions under which the privilege of corporate existence shall be granted; the duration of the privilege and the circumstances under which it shall be terminated. All these things are matters of public concern to be determined by the Legislature. They are not affected by private negotiations between the parties. No private rights to their continued existence unchanged can arise. It is for the legislature, acting in the public interest, to say when the conditions shall be changed. And in the corporation acts the Legislature has clearly reserved to itself the right to make changes when the public welfare requires them.

I am unable to agree .that Mr. Collins acquired a vested right to have continued a corporation which, by reason of the irreconcilable differences of the evenly divided board of directors, only functions by disregarding the laws governing corporate activities. The Legislature, by the passage of R. S. 14:13-15, has said, in effect, that it is not in the public interest to permit such a situation to continue and has, in the act, provided a cure. Such action was within the power of the Legislature, and by virtue of the provisions, 2 C. S. 1601, par. 5, R. S. 14:2-8, the statute is applicable to the Collins-Doan Company.

There will be a judgment for the dissolution of the company in accordance with the provisions of R. S. 14:13-15


author: Jayne, J. S. C.

text:
    MARY BLAKE, ET AL., PLAINTIFFS, v. JAMES BRENNAN AND MARY BRENNAN, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided Nov. 12, 1948.

      Mr. Samuel Morris, for the plaintiffs.

      Mr. Frank I. Casey, for the defendants.
   Jayne, J. S. C.

When young “Jimmie” Brennan arrived in the United States from Ireland in 1925, he found a kind-hearted friend and sympathetic benefactor in one George Foley. It was Foley who obtained lodgings for him and soon procured for him an opportunity of employment. Thus originated an affectionate and enduring friendship between the childless George Foley, his wife Catherine, and the grateful James Brennan. Jimmie, however, never was a member of the Foley household.

The succeeding events about to be related occurred in the City of Trenton. Jimmie was engaged in the capacity of building custodian and maintenance supervisor at Rider College, and was thereafter employed in a like position by the Board of Education of the city.

It was in 1938 that Foley unfortunately resolved to enter into the retail alcoholic beverage business, and he purchased an existing saloon for $800. He soon began to succumb to the ever present temptation to indulge in the stock at hand, and his submission was progressively more excessive. His carelessness kept pace with his intemperance. The bar room degenerated into a filthy, squalid resort regularly harboring that variety of inmates commonly called “bar flies” who are alert to accept any “given” quantity of liquor to which the proprietor or some liberal patron may treat them. Mrs. Foley was aware of the -conditions, so was Jimmie, and in his infrequent sober moments so was George Foley.

It was in -such exigency that Mr. and Mrs. Foley implored Jimmie to render assistance. Would he not conduct the saloon during some of the evenings of the week, particularly on those when Mr. Foley was incapacitated?

Jimmie -had married, and his wife although emphatic in her disapproval, nevertheless appreciated the -depth of 'her husband’s gratitude and friendship for Mr. Foley. Jimmie contributed his assistance on such occasions and evidently succeeded in so far as his time and the conditions would permit in improving the surroundings and the environment. Mr. Foley offered him a partner-ship interest in the business which Jimmie declined.

On December 13, 1944, Foley collapsed and died in the saloon. It was Jimmie who conducted his old friend to an abode of eternal rest.

The only property known to -belong to the decedent’s estate were the saloon business and its bad will. Mrs. Foley had some information of the existence of an insurance policy on 'her husband’s life, only to discover that 'he -had materially -reduced the benefit by means of loans on its security. The apprehension that Mr. Foley had numerous -debts and that h-is estate was insolvent promptly -became a reality.

Doubtless Mrs. Foley in looking toward th-e future envisioned a scene of perplexity. However, I am persuaded that she thoughtfully surveyed all of -her circumstances and perceived the avenues which she might possibly pursue. Of -her -mental ability to have done so, I have no uncertainty.

The scope of her contemplations can be easily deduced from the evidence. She undoubtedly realized that she had no more than $1,500 in cash, that she owned premises at No. 797 East State Street of a taxable valuation of $3,600, upon which there was a mortgage encumbrance of $3,000, and from which premises she derived a relatively small rental income, and that she had title to the building known as No. 803 East State Street, which was 'in such a state of 'disrepair as to he undesirable for occupancy. She had expressed her intention to -abandon her ownership of the last mentioned property and to permit it to be sold for unpaid taxes. It was, however, adjacent to No. 805, in which the saloon business was conducted. She learned that she could sell the saloon business by the acceptance of offers ranging from $1,500 to $2,300. She entertained the notion that she herself could continue the business if Jimmie would only assist her, and yet she wondered whether the creditors would continue to supply her with liquors on credit. She had' no relatives who could aid her and no source from which to acquire additional 'capital. I infer that to embark on a project so unsuitable to a woman alone was not alluring to Mrs. Foley.

Naturally her anxiety concerning her future means of livelihood was predominant. Manifestly, the saloon business was the only available fountain from which she could draw any persistent assurance of her prospective maintenance. I believe she adequately appraised the advantages and disadvantages of the available adventures.

A calculating, fair, and mutually prudent bargain between Mrs. Foley and Jimmie seems to have eventuated which did not impair the comfort of Mrs. Foley 'but, it is said, has unlawfully prejudiced the rights and expectations of her next of kin, most of whom reside in Ireland.

The agreement was of the following tenor: Jimmie would resign his usual employment. Mrs. Foley would assign the liquor license to him and convey to him the building at No. 803 East State Street, which premises Jimmie at his expense would suitably renovate and reconstruct for use as a cafe and to which the license would be then transferred. The upper floors would provide an apartment for the exclusive use of Mrs. Foley and additional rooms which Mrs. Foley could let to lodgers. It was -covenanted that Jimmie would furnish the apartment and defray from the business or personally the living expenses of Mrs. Foley. Those benefits Mrs. Foley would enjoy for the remainder of her life. Obviously her acts were not to be without beneficial considerations.

The compact was fulfilled by the parties in every particular. The property was renovated at an expense which apparently exhausted the savings of Jimmie and his wife. The creditors of the deceased were paid. The conveyance and the assignment of the license were executed in the spring of 1945. Mrs. Foley told Mrs. Moore, the alcoholic beverage inspector, “I have everything I want; I am happy.” The agreement continued as contemplated until the death of Mrs. Foley on July 7, 1946.

I do not hesitate to acknowledge that I have reposed confidence in the testimony of Mrs. Edith Moore in all respects. In my judgment she was a disinterested, impartial, intelligent, and truthful witness.

With this prefatory statement, I may now state my conclusions concerning the factual elements essential to the establishment of the alleged cause of action. I find that Mrs. Foley had the mental capacity to make the deed and assignment of the license. She had at that time the ability to understand, in a reasonable manner, the nature and effect of her acts and the significance of the transaction in which she was participating. Earle v. Norfolk and New Brunswick Hosiery Co., 36 N. J. Eq. 188, affirmed 37 N. J. Eq. 315; Wilkinson v. Sherman, 45 N. J. Eq. 413, 18 Atl. 228, affirmed 47 N. J. Eq. 324, 21 Atl. 955; Soper v. Cisco, 85 N. J. Eq. 165, 169, 95 Atl. 1016; Turner v. Cole, 116 N. J. Eq. 368, 173 Atl. 613, affirmed 118 N. J. Eq. 497, 179 Atl. 113; Wolf v. Palisades Trust and Guaranty Co., 121 N. J. Eq. 385, 190 N. J. Eq. 94; Campana v. Angelini, 132 N. J. Eq. 285, 28 Atl. (2d) 223. The charge of mental incapacity encountered refutation in the testimony of the plaintiffs’ witnesses Cottrell and- attorney Rigby, and in that of the defendants’ witnesses, Doctors Denelsbeck and Beyer, Mrs. Edith Moore, and others.

It must be realized that even a deed or transfer of gift is not necessarily void or in all circumstances voidable. Generally stated, the law permits anyone uninfluenced by fraud or imposition to dispose of his or her property gratuitously, provided the rights of creditors are not thereby injuriously affected, regardless of the providence or improvidence of the act. James v. Aller, 68 N. J. Eq. 666, 62 Atl. 427; Fretz v. Roth, 70 N. J. Eq. 764, 64 Atl. 152; Kerlin v. Maher, 139 N. J. Eq. 566, 52 Atl. (2d) 767.

The parties to the transaction here implicated were not relatives. They were not attached by any fiduciary relationship of a legal nature. There are well established principles which are to be applied in respect of transactions between persons occupying relations in which trust and confidence actually or presumptively exist. I have heretofore collated the decisions exemplifying those principles in my opinions in Campana v. Angelina, supra; Alpaugh v. Alpaugh, 135 N. J. Eq. 200, 37 Atl. (2d) 825.

The crucial point in the present case appertains to the quality and character of the relationship existing -between Mrs. Foley and Brennan at the time of the negotiations and the -consummation of the transaction. The determination of that element is of decisive importance -because it is not made evident that in entering into the compact Mrs. Foley had the benefit of independent, competent, and impartial advice. I have in mind our decisions in Peppler v. Roffe, 122 N. J. Eq. 510, 194 Atl. 548; Croker v. Clegg, 123 N. J. Eq. 332, 197 Atl. 13; Chandler v. Hardgrove, 124 N. J. Eq. 516, 2 Atl. (2d) 661; Zaveski v. Kish, 138 N. J. Eq. 61, 46 Atl. (2d) 665; Miller v. Miller, 138 N. J. Eq. 225, 47 Atl. (2d) 32; Kerlin v. Maher, 139 N. J. Eq. 566, 52 Atl. (2d) 767.

One -cannot always precisely delimit and demarcate a -mutually friendly, respectful, and trustworthy relationship from the so-called dominant confidential relationship from which a factual presumption of undue influence legally springs. Tersely stated, the test is whether the relations between the parties were of such a -character of trust and -confidence as to render it reasonably certain that the one party occupied a dominant position over the other and that consequently they did not deal on terms and conditions of equality. The burden of proving the existence of such a confidential relationship rests upon the party who asserts it.

I acknowledge that the question here is a sharp one, rendered the more acute by the absence of any testimony by the attorney before whom the instruments of transfer were executed by Mrs. Foley. Yet it is my conviction that Jimmie did not indulge in any deception or exert any actual undue influence upon Mrs. Foley in the transaction to which this litigation relates. I am more disposed to -believe that he was drawn into it in deference to his grateful devotion to Mr. and Mrs. Foley which had endured notwithstanding the accumulating misfortunes and adversities sustained by his old-time friends.

It is said that Jimmie was the one to whom Mrs. Foley would naturally appeal for aid. Such, I -suppose, is likewise the position of the banker in his relation to the -borrower. The testimony quite conclusively demonstrates by its -narrative of her normal deportment that in 1945 Mrs. Foley was not a. meek and supine person, easily cajoled. At that time she frequently conducted the bar and often participated in -card games with patrons and friends in the saloon.

And so I am -constrained to -conclude that the relations between Mrs. Foley and the defendant Brennan were not in fact ■such as to generate presumptively that dominance on the part of Brennan which is implicit in undue influence.

If the requisite confidential relationship out of which undue influence can be presumed is not evidentially shown, there must be some proof of actual fraud in order to nullify the transfers. Collins v. Collins, 45 N. J. Eq. 813, 820, 18 Atl. 860. In the absence of both classes of proof, the lack of independent advice is not material. Dill v. Dill, 118 N. J. Eq. 374, 179 Atl. 370, affirmed 119 N. J. Eq. 467, 183 Atl. 172; In re Fulper, 99 N. J. Eq. 293, 132 Atl. 834; Griffiths v. Griffiths, 142 N. J. Eq. 751, 61 Atl. (2d) 249.

I am satisfied that the transactions here sought to be impugned were “well understood” by Mrs. Foley, and in the existing circumstances the bargain in its entirety was prudent and advantageous.

Judgment for the defendants-.


author: Eastwood, J. S. C.

text:
    SEBASTIAN RUTA, PLAINTIFF, v. EUGENE WERNER, JR., DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided October 20, 1948.

      Messrs. Chandless, Weller & Kramer (Mr. Ralph W. Chandless, of counsel), for plaintiff.

      Messrs. Morrison, Lloyd & Morrison (Mr. William J. Morrison, Jr., of counsel), for defendant.
   Eastwood, J. S. C.

The bill of complaint alleges that on December 29, 1944, the plaintiff and defendant entered into a partnership agreement to engage as co-owners for their mutual profit in business of the development of acreage in the Village of Ridgefield Park. The business was to be conducted in the name of the defendant, whose wife held the legal title to the real estate, and profits were to be divided equally between -the parties. The partnership activities continued until March, 1945, when a disagreement arose, and the arrangement between them was terminated.

The bill prays for a decree dissolving the partnership, the appointment of a receiver and an accounting. Defendant denies that there was a partnership between the parties, and alleges that plaintiff has been fully compensated for the use of his equipment and such services as he may have rendered to defendant.

The issues involved here are: (1) was a partnership created; (2) does plaintiff have an adequate remedy at law; (3) is the plaintiff’s claim for one-half of the increase 'of the value of the land enforceable; and (4) is the contract enforceable in equity in view of the allegation that plaintiff was to use his ability and efforts in obtaining municipal contracts for the disposal of garbage?

The proofs establish that there were some preliminary negotiations between the parties with respect to their engaging as co-venturers for their mutual profit in the business of developing the land in question, as a result of which a proposed partnership agreement was prepared by defendant’s attorney in the month of December, 1944. However, the agreement was not executed by the parties and never came into existence. Plaintiff testified that on December 29, 1944, he and the defendant agreed orally to engage as partners in the venture. The tract of land in question consisted of approximately 100 acres of meadow land, of which the defendant testified he was the owner and that the title was in his wife’s name. The testimony indicates that the plan of operations was that plaintiff would level the land with his bulldozer and cover garbage and industrial waste with clean earth after such refuse was dumped there by scavengers holding contracts with various municipalities. The defendant in turn claims to have paid the sum of $1,300 into the venture, furnished a truck, gasoline and oil and made certain repairs to plaintiff’s bulldozer. Plaintiff worked on the dump approximately 12 hours per day until the middle of March, 1945, when a disagreement arose concerning the insistence by the plaintiff that a road be constructed over the tract so that incoming trucks carrying garbage and refuse might be properly accommodated. Defendant refused to accede to plaintiff’s demand and as .a result ordered the plaintiff to remove his equipment from the tract and cease his operations. Plaintiff insists that nothing was paid him for his services and there was never any accounting between the parties. In addition to the plaintiff’s claim for an adjustment of the rights and liabilities between the parties, there is sought to be enforced a claim on his part for one-half of the increased value of the lands in question due to the fill and leveling work performed by him.

Although defendant contends that the burden is on the plaintiff to prove a legally enforceable partnership contract and that plaintiff has wholly failed to do so, the plaintiff’s testimony, which is not seriously contradicted by defendant, amply establishes such relationship. In addition to the evidence offered by the plaintiff, the various acts of the parties speak eloquently of an arrangement between them whereby there was created a plan of operations with reference to the land in question under which plaintiff was to contribute his skill, ability and knowledge, together with the use of his bulldozer. On the other hand, it is clear that the defendant contributed some cash, gasoline and oil for the equipment used and also the use of the land in question, albeit title to same was in the name of defendant’s wife. That the parties were to share equally in the profits is established without serious contradiction. There was clearly established by the oral agreement a partnership relation and operations conducted in pursuance thereof. Braveman v. Munzer, 104 N. J. Eq. 477 (Ch. 1929). It appears from the evidence that partnership activities were discontinued by mutual acquiescence. It has been well-established that equity has jurisdiction over issues involving the establishment of a partnership, its dissolution, and for an accounting thereof. The entire issue should be settled in one proceeding.

While defendant, in his brief, argues that plaintiff’s claim for one-half of the increased value of the land is not enforceable, he failed to assert such a defense in his answer. There appears to be no merit to this contention. Although title to this property is in the name of the defendant’s wife, he testified that he is the owner'thereof. In support of his contention, defendant urges that since there was no written agreement signed by the owners, the agreement falls within the Statute of Frauds and is not enforceable. With this contention I disagree. Plaintiff does not claim an interest in the land. His claim is limited solely to the increase in value thereof. The title to the wife’s property is in no wise involved in these proceedings, which is limited to an accounting for the increased value of the land. See 27 C. J. 221, sec. 206. In Chew v. Markeim, 125 N. J. Law 595 (Sup. Ct. 1941), 16 Atl. (2d) 337, it was held: “An agreement simply for the division of profits derived from the sale of land need not be in writing to be valid.”

Nor is there any merit in defendant’s contention that the partnership is not enforceable in equity on the ground the plaintiff was to use his ability and efforts in getting municipal contracts for the disposal of garbage and refuse. This defense was not alleged in defendant’s answer. However, Ruta also testified that many of these agreements were made with scavengers having contracts with municipalities. In addition, plaintiff contributed his bulldozer and worked long hours in filling the land of the defendant. No testimony was offered to indicate that the plaintiff exercised any injurious influence over any public officials of any municipality. It is not illegal to form a partnership to secure by competitive bidding contracts from municipalities. Ruta’s services did not consist solely in securing contracts from municipalities. The cases cited by the defendant have no application.

In view of the fact that all business has ceased since the middle of March, 1945, and there appears to be no other issue involved than the determination of the increased value of the land in question and. an accounting of the other partnership activities, the appointment of a receiver at this time would serve no useful purpose.

An order dissolving the partnership and directing an accounting will be made and a reference for that purpose in conformity with Rule 3 :53-1 et seq.


author: Freund, J. S. C.

text:
    HYGIENIC PRODUCTIONS, INCORPORATED, A CORPORATION, AND RAYHERTZ AMUSEMENT CORPORATION, A CORPORATION OF NEW JERSEY, PLAINTIFFS, v. JOHN B. KEENAN AND THE CITY OF NEWARK, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided October 22, 1948.

      Messrs. Hannoch & Lasser (Mr. Aaron Lasser) for the plaintiffs.

      Mr. George B. Astley for the defendants.
   Freund, J. S. C.

The plaintiffs made application for a preliminary restraint. This matter comes on to be heard after notice to the defendants, the submission by them of answering affidavits, and argument.

There appears to be no dispute as to the material facts. The Director of Public Safety of the City of Newark has threatened to revoke the license of the Broad Street Theatre if it presents a motion picture film entitled “Mom and Dad.” The license for the operation of the theatre is held by Rayhertz Amusement Corporation, a plaintiff, and the owner and exhibitor of the moving picture film is the plaintiff, Hygienic Productions, Inc. The proposed presentation and exhibition of the picture at the theatre is pursuant to a contract entered into between the plaintiffs.

On October 9, 1948, the plaintiffs, in accordance with practice and for the purpose of advertising the picture, held a preview to which were invited representatives of the City of Newark. The number of persons attending this performance is differently estimated, plaintiffs claiming that 140 persons attended while the defendants’ affidavits give the number as 70.

I have read the affidavits submitted by the defendants. .Beside the affidavit of defendant John B. Keenan, Commissioner of Public Safety, who did not attend the performance, there are eight affidavits of persons who did attend, five by women affiliated with various organizations, and the remaining three by officials of the Police Department — an acting policewoman, a Captain and a Lieutenant.

The plaintiffs submitted an affidavit, attached to which were photostatic copies of 281 letters from clergymen, educators, public officials, scout leaders and other persons who viewed the picture in other communities. Attached also to the affidavit were photostatic copies of 80 forms which were supplied to guests who attended the performance on October 9th, on which they had indicated their comments on the picture. In addition depositions of the defendant, John B. Keenan, were taken before me yesterday on notice by the plaintiffs.

The significant factor to be gleaned from the affidavits submitted by the defendants is that it is not charged that the film is immoral, or obscene; the sole basis for objection to the exhibition of the film is that it is being exhibited under commercial auspices. None of the affidavits goes so far as to say that the film should not be exhibited at all. Four of them state expressly, and four, inferentially, that the film should be shown under educational, medical or social welfare supervision. To quote from some of the affidavits of the defendants: — Mrs. Agnes Depperman, who is chairman of Plays and Films of a’Kempis of New Jersey, a women’s organization, says “After the review of the facts, our committee recommends that the picture, as shown, and the lecture as published, should be conducted under the direct supervision of social, health and educational boards.” Josephine Renz, who is an acting policewoman, says “On the whole, while the picture is represented as a picture of sex problems, to me it is certainly objectionable because of its presentation in a commercial way. It should only be handled by authorized boards of physicians or the like.” Robert C. Lawrence, Captain in the Police Division, among whose duties are included the regulation of theatres and moving pictures, says “I viewed the picture and in my opinion it is a subject which should be controlled and regulated and not commercialized and put on the stage for the public, allowing people to come in for the price of admission, but I believe it should be under the control of a medical board or the Board of Education.” Arthur A. Weller, Polic lieutenant, said “Upon viewing the picture, I determined that in parts it was educational, if shown in the proper places under proper supervision.”

The affidavits and exhibits submitted by the plaintiffs contend that the picture is neither lewd, immoral nor indecent; that it has been shown to audiences in more than 4,000 theatres in more than 40 states; that it has been shown in more than 30 cities in the State of New Jersey; and that it is presently being exhibited in some other municipalities within the state. The letters, photostatic copies of which are attached to the affidavit, include letters of recommendation as to the educational value of the picture, which deals with parental delinquency, and information concerning sex matters. .It is alleged that the picture describes and illustrates the conception and delivery of a child at birth, both in a normal manner and by Caesarean operation, and it also depicts the ravages of social diseases.

It is not the province or function of the Court to censor motion pictures nor any accompanying lecture nor the auspices under which presented. If, as defendants argue, the presentation of the film would not be objectionable if conducted under non-commercial auspices, it is not within the power of the defendants to revoke a theatre license lif the same film is shown under commercial auspices. The defendants’ affidavits say that the picture should be exhibited under educational auspices. If it has educational value, such value exists whether or not it is shown under commercial auspices.

In the cases which have come to my attention, the Court had before- it for consideration the revocation of licenses for exhibition of pictures deemed by the police commissioner to be immoral or indecent, which is not the situation here. In Public Welfare Pictures Corp. v. Brennan, Commissioner of the City of Newark, 100 N. J. Eq. 132, the late Vice-Chancellor Church in 1926, in determining that the defendant commissioner had no authority to revoke a permit for presentation of a film called “The Naked Truth” which the commissioner deemed to be immoral, made these observations which are pertinent here: “The board of censors thought it objectionable unless presented in a Y. M. C. A., in a school building or a church, — without charge. In passing, I may say I cannot see why a play objectionable in itself is made less so by allowing the public to see it in a church, and for nothing.”

Since the film under consideration deals with social sex problems, the following remarks of Judge Augustus N. Hand speaking for the United States Circuit Court of Appeals in U. S. v. Dennett, 39 Fed. (2nd) 564, 76 A. L. R. 1092 are pertinent: “The old theory that information about sex matters should be left to chance has greatly changed and while there is still a difference of opinion as to just the kind of instruction which ought to be given, it is commonly thought in these days that much was lacking in the old mystery and reticence. This is evident from the current literature on the subject, particularly such pamphlets as ‘Sex Education’ issued by the Treasury Department, U. S. Public Health Service in 1927.” In this case, the plaintiffs allege that the medical sequences in the film were procured from materials furnished by the U. S. Department of Health and filmed under the direction of public health officials.

We are dealing here with the threatened revocation of a license for the conduct of a legitimate business because of such proposed exhibition. The court has not viewed the film and does not make any comment on its merits or demerits, nor on its educational value, but disposes of the matter upon' the facts presented and the law applicable.

I conclude that the Commissioner has no authority to interfere with the presentation of the film for the reasons urged. An order with a temporary restraint may be presented in accordance with these conclusions.


text:
    JOHN S. WESTERVELT’S SONS, PLAINTIFF, v. REGENCY, INC., ET ALS., DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided October 25, 1948.

      Messrs. Huckin & Huckin, attorneys for plaintiff.

      Mr. Abraham H. Sles, attorney for defendant, Regency, Inc.

      Messrs. Eichmann & Seiden, attorneys for defendants, Marij V. Cassel van Doorn and Jean G. L. Cassel van Doorn.

      Mr. L. Stanley Ford, attorney for defendant, William Henig, trustee in bankruptcy of Regency, Inc.
   Grimshaw, J. S. C.

This is a motion for summary judgment under Rule 3 :56. The plaintiff seeks a judgment setting aside a deed from Regency, Inc., a corporation of New Jersey to Jean G. L. C. van Doorn, one of the defendants, and a money judgment against van Doorn and his wife. From the affidavits filed in the cause the undisputed facts appear to be as follows:

Regency, Inc., was incorporated under the laws of New Jersey in 1941. According to the certificate of incorporation the corporation was formed to engage in the business of buying and selling real and personal property. Five hundred shares of stock having no par value were issued for the sum of $50,000. Of this stock, 498 shares were issued in the name of Marij van Doorn, one.in the name of Jean van Doorn and one in the name of Abraham H. Sles. Marij van Doom was president of the corporation and Jean van Doorn was the treasurer and directing head of the corporation. All three stockholders were directors. Sles later retired from the corporation leaving the van Doorns as the only persons interested in the company as officers, directors and stockholders.

In December, 1941, Regency, Inc., purchased the main tract of the property in dispute for $50,000, using the money originally subscribed for the capital stock. Two adjoining tracts were later purchased for $10,000 and $10,050, respectively. The money used in these purchases was supplied by the van Doorns.

On April 10, 1942, Regency, Inc., entered into a contract with the plaintiff for extensive alterations and additions to the buildings on the property. On November 10, 1943, plaintiff instituted an action at law to recover the amount due under the contract and on February 16, 1948, recovered a judgment in the sum of $23,103.90 and $78.97 costs. The judgment has not been satisfied.

On January 29, 1945, while the suit was pending, Regency, Inc. conveyed all of its property to the defendant, Jean van Doorn. The conveyance was made as part payment on a claim of $290,675.79 which the van Doorns asserted against' the corporation. As a result of the conveyance, a 'Credit was given upon the claim of $129,233 and a promissory note for the balance of $161,442.79 in favor of van Doorn was executed by the corporation.

By the conveyance to van Doorn, Regency, Inc., stripped itself of all of its assets except a deposit of $50 for telephone service. At the time, in addition to the van Doorn claim, the corporation was indebted to the plaintiff in the sum of $23,103.90; to William Beyenberg in the amount of $505 and to Frank Ackerman in the sum of $1,460.63. The corporation had never engaged in business other than' the transactions above described. It had no income. The property had been and still is used as a residence by the van Doorns, who paid no rent.

On April 16, 1946, Jean van Doorn and his wife conveyed a portion of the property to Howard S. Weaver, et ux. The consideration for the conveyance was the sum of $25,000.

On March 25, 1948, plaintiff filed its bill in the Court of Chancery seeking the aid of the court in the enforcement of its judgment at law. On April 23, 1948, Regency, Inc., filed a petition in bankruptcy and William Henig was elected trustee. On July 20, 1948, with the consent of the Chancellor and of the bankruptcy court, an amended bill of complaint was filed in which the trustee joined as a party defendant. In his answer the trustee admitted all of the allegations of the complaint and joined in the prayers for relief.

Upon the basis of the undisputed fact, it is clear that the conveyance from the corporation to van Doorn was made in contemplation of insolvency. It was made for a past consideration to the person who was fully informed as to the condition of the company. Hence the conveyance was in contravention of R. S. 14:14-2 and is void. Schwartz v. Maguire, 131 N. J. Eq. 578; Regina Music Box Co. v. F. G. Otto & Sons, 65 N. J. Eq. 582.

I am of the opinion that the pleadings and affidavits show that there is no genuine issue as to any material fact and that summary judgment should he entered. Rule 3:56 — 3. Accordingly, judgment will be entered setting aside the conveyance dated January 28, 1945, from Regency, Inc., to Jean van Doorn, except as to that portion of the property conveyed to Howard S. Weaver and Mary R. Weaver, his wife, who are bona fide purchasers for value and without notice of the fraud. A consideration of $25,000 having been paid by the Weavers to van Doorn for the conveyance to them, I will enter judgment against Jean van Doom personally for the sum of $25,000. The judgment will be in favor of the trustee in bankruptcy a,s the representative of all of the creditors of Regency, Inc.

Plaintiff urges that in addition to the judgment in favor of the trustee, there should be a money judgment against the van Doorns in favor of the plaintiff. A number of cases are cited in which the courts have pierced the corporate veil in order to prevent the perpetration of a fraud. They are not in point. The plaintiff contracted with Regency, Inc. Presumably plaintiff intended to look to the assets of Regency, Inc., for the payment of its claim. Had plaintiff intended to charge the van Dooms personally it would have insisted upon having them join in the contract. All the plaintiff can ask is that the assets of Regency, Inc., shall be made available for the payment of its claim. The fact that there are other claims and that bankruptcy has intervened does not alter the situation. The prayer for a money judgment in favor of the plaintiff against Jean van Doorn and Marij van Doorn will be denied.


text:
    JOSEPH GORECKI, ALSO KNOWN AS JOSEPH GURECKY, PLAINTIFF, v. ANNA GORECKI, ALSO KNOWN AS ANNA GURECKY, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided October 15, 1948.

      Mr. Ralph L. Fusco, for the plaintiff.

      Miss Lillian Clawans, for the defendant.
   Jayne, J. S. C.

Bills of particulars are superseded. “If a pleading to which a responsive pleading is to be made is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading, he may move for a more definite statement before interposing his responsive pleading.” Rule 3:12-5. In pursuance of the practice thus authorized, an application is made on behalf of the defendant for an order requiring the plaintiff to furnish a more definite and comprehensive statement in certain specified respects of his alleged cause of action.

In the consideration of a motion of this nature it is to be perceived that a request for a statement under Rule 3:12-5 is not to be recognized as the equivalent ad idem, of the former demand for a bill of particulars. “It is serviceable only in extreme cases where a responsive pleading cannot be framed.” See, Comment, Tentative Draft of Rules. The six “defects complained of and the details desired” in the present action have accordingly been studied in conformity with the evident object of the rule.

I have resolved that:

1. The plaintiff should reveal the purpose which impelled him to place title to the property in question in the name of the defendant.
2. The plaintiff should disclose whether the payments alleged in paragraphs 5 and 6 of the complaint were made by an agent. (Rule 3:9-3).
3. The information sought to be elicited by requests Nos. 4 and 6 should be supplied.
4. The plaintiff should inform the defendant of the name of the other party to the contract alleged in paragraph 7 of the complaint.
5. Recognizing the circumscribed object of the rule, the plaintiff will not be obliged to divulge the other details desired by the defendant.


text:
    IN THE MATTER OF A. L. S., ALLEGED INCOMPETENT.
    Superior Court of New Jersey Chancery Division
    Decided November 5, 1948.

      Mr. Eugene P. Hutchins, for the plaintiff.
   Jayne, J. S. C.

The complaint, proper in form and substance, is presented to the Chancery Division of this court. It prays for a judgment declaring that one A. L. S. is mentally .incompetent and unable to govern herself and her affairs, and requests the appointment of a guardian. The averments of the complaint which are particularly pertinent to the present question are that the alleged incompetent was committed to the New Jersey State Hospital on April 30, 1948, and that she is possessed of personal property of approximately $6,918.08.

The question is whether the issue of alleged incompetency may in the circumstances of the present case be adjudicated at a trial without a jury. The answer is necessarily negative.

True the constitution of 1947 ordained that “The Legislature may authorize the trial of the issue of mental incompetency without a jury.” Art. 1, par. 9. The Legislature, however, has chosen for the present to moderate the exercise of its full power as exemplified by the enactment of Chapter 388, (P. L. 1948) which reads:

“1. In civil actions or proceedings for the determination of mental incompetency or for the appointment of a guardian for an alleged mental incompetent, the tidal of the issue of mental incompetency may be had without a jury pursuant to Buies of the Supreme Court, unless a trial by jury is demanded by the alleged mental incompetent or someone on his behalf.”

It is observed that the statutory enactment authorizing the proceedings for the determination of mental incompetency without a jury are confined to those which .may .be prosecuted in pursuance of the rules of the Supreme Court, and the procedure without a jury is made subordinate to. the demand of the alleged incompetent or someone on his behalf for a trial by jury.

Rule 3:91 — 6 of civil practice in the Superior Court reads in part as follows:

“(a) Where the total personal and real estate of the alleged incompetent is not in excess of $2,000 in value and he has been confined in a public mental institution for at least 1 year prior to the hearing, the court without a jury may, after taking testimony in open court, appoint a guardian for him and fix the amount of the guardian’s bond.
“(b) In all other actions and, if the court so directs, in an action referred to in Rule 3:91-6 (a), the action shall be tried by a jury, which shall in every case be called from a general panel. If on the trial the person is found to be incapable of governing himself and managing his affairs, the court shall render judgment upon its finding and appoint a guardian for him and fix the amount of the guardian’s bond. A motion for a new trial shall be served not later than 30 days after the entry of the judgment.”

The rule manifestly permits the court without a jury, after taking testimony in open court, to determine the mental incompetency and appoint a guardian for a mental incompetent where the total personal and real estate of the alleged incompetent is not in excess of $2,000 in value and the alleged incompetent has been confined in a public mental institution for at least one year prior to the hearing, subject of course to the statutory conditions. Even in the circumstances specified in subdivision (a) of the rule the court may direct that the action be tried by a jury.

In all other actions the proceedings shall in obedience to subdivision (b) of the rule be conducted by the court with a jury selected from the general panel.

An inattentive reading of subdivision (b) and the presence of the comma after the -clause “and, if the court so directs,” seem to have introduced the erroneous impression that subdivision (b) relating to actions other than those comprehended by subdivision (a) only requires trial by jury “if the court so directs.” The clause “if the court so directs” appertains only to actions within the limited compass of subdivision (a).


author: Kays, J. S. C.

text:
    THE NEWTON TRUST COMPANY, TRUSTEE, PETITIONER, v. ALLAN M. CHAMBERS ET ALS., DEFENDANTS, AND ALICE L. PERKINS, PETITIONER.
    Superior Court of New Jersey Chancery Division
    Decided November 17, 1948.

      Messrs. Morris, Downing & Sherred, solicitors for The Newton Trust Company, Trustee, petitioner.

      Mr. John R. Perkins, solicitor for Alice L. Perkins, petitioner.
   Kays, J. S. C.

This matter came before me on a petition and order to show cause why the trustee should not be ordered to pay to Alice L. Perkins the sum of $11,666.07 or such other sum as might be due on a pro rata distribution of the funds in the hands of said trustee.

The Newton Trust Company was trustee for the bondholders of the Sussex Calcite Company and had in its hands for distribution to the bondholders the sum of $38,350.00 resulting from the foreclosure of the mortgage given to secure the bonds. By a consent decree the trustee was directed to distribute said amount proportionately among the bondholders who presented their bonds for endorsement of payment and was then directed by said decree to file its report of distribution within eight months of the date of the making of said decree and deposit the moneys remaining in its hands with the Clerk of the Court of Chancery with leave to the bondholders to make application to the said Clerk for further distribution or disposition of said money that might remain. The decree further provided that upon the making of the said payments and disbursements and carrying out the directions of the decree, the said trustee should be discharged from all obligations in relation to the said trust. The decree was dated August 23, 1947.

Certain bondholders presented their bonds to the said trustee and were paid at the rate of 38.35 per cent, of the principal amount of their bonds. The trustee based the payments on the assumption that $100,000.00 of bonds were issued and outstanding. Among the bonds presented were bonds in the amount of $41,500.00 presented by Phoebe M. Zabriskie, who was represented by Harrison & Reinhardt, her solicitors. There was paid by said trustee to the said Phoebe M. Zabriskie, or her solicitors, the said proportionate share of 38.35 per cent, of the, face value of the said bonds which amounted to $15,915.25.

After the distribution had been made to the said Zabriskie and other bondholders, there remained in the hands of the trustee a sum amounting to about $12,000.00.

On February 28, 1948, about six months after the entering of the consent decree, the petitioner, Alice L. Perkins filed a petition wherein she alleged that she was the owner of certain coupons attached to a number of said bonds in the amount of $30,420.00 for which she had not been paid and that the said trustee had remaining in its hands $12,810.90 of which she demanded that she be paid 38.35 per cent, of the amount of said coupons.

It developed at the argument that the coupons referred to in the petition and the order to show cause were attached to bonds which had been owned by Phoebe M. Zabriskie which bonds were presented to the trustee for payment and which were paid by the said trustee in the proportionate amount of 38.35 per cent. It was also admitted that after said payment had been made to and accepted by the said Phoebe M. Zabriskie she assigned the bonds to which • it is alleged coupons were attached to the said Alice L. Perkins, the petitioner, and that thereafter the said Alice L. Perkins presented her petition and obtained the order to show cause. At the time of the argument on the order to show-cause, it appeared that a number of the bondholders had not presented their bonds for payment.

There was no form of the bonds or coupons before me. There was no evidence or other proof that the bonds of the bondholders who had been paid a proportionate share had no coupons attached. No notice was given to other bondholders of the said application and there was no proof of the number of outstanding bonds or coupons which had not been presented for payment.

Under all the circumstances in the case, including the fact that Phoebe M. Zabriskie had presented her bonds, which were the bonds in question, and accepted payment of her proportionate share, I denied the application.