text:
    Henry W. Johnson, executor &c. of Peter P. Conover, deceased, v. Huldah H. Conover et al.
    1. A bequest to a wife of “ the sum of eight thousand dollars invested in stocks, the interest to be paid to her during her life,” is a demonstrative legacy.
    2. This' legacy is not a charge upon the real estate, either by reason of an equitable conversion of the realty, inasmuch as the order to sell the real estate is for the purpose of distribution and not to pay legacies; or by a gift of the residue of the real and personal property in one mass, inasmuch as the last clause of the will contains a gift of all the proceeds of the sale of the real estate.

      Messrs. Hawkins & Durand, for the complainant.

      Mr. Frank P. McDermott, for the residuary legatees.

      Mr. Alfred Walling, for the executor of Margaret Conover.
   Reed, V. C.

This bill, although filed in the nature of a bill of interpleader, is in reality a bill by an executor to obtain a decree construing the will of his testator.

The first question propounded is whether the bequest to testator’s wife of the sum of eight thousand dollars, invested in stocks, the interest thereof to be paid to her during life,” is a specific or a demonstrative legacy.

The second question is whether, if it be a general legacy, it is chargeable upon the real estate of the testator.

The facts of the case are these: Peter P. Conover died November 15th, 1890. By his will, after directing his debts and funeral expenses to be paid, he proceeded as follows:

“Item. I give and bequeath unto my beloved wife, Margaret, the use of all my household goods and furniture of every hind and description during her life, empowering her to distribute the said property, or any part thereof, to such of my children as she shall think proper to give the same, and in case she should die without disposing of the same, then I order the same to be sold, and the proceeds to be disposed of as hereinafter directed.
“Item. I give and devise to my wife, Margaret, during her life, the use of my dwelling-house and lot whereon I now live, also all my other real estate for life, empowering my executors herein named, with the consent of my wife, to sell and dispose of any part thereof, at public or private sale, as they shall esteem for the best interest of my estate, and invest the proceeds of such sale in bonds and mortgages or government securities, and pay the interest thereof to my wife during her lifetime.
“Item. I give and bequeath unto my beloved wife, Margaret, the sum of eight thousand dollars, invested in stocks, the interest whereof to be paid to her during life.
“Item. Whereas, I have, for a nominal consideration (no money being paid), conveyed to my son, John H. Conover, a house and lot in the village of Key-port, I order and direct my executors not to exact from my son John the payment of any money for said property, he having the right to dispose of the same without accounting to my estate.
“Item. I give and bequeath unto my wife, Margaret, the interest of all my personal property not hereinbefore mentioned, during her lifetime for her maintenance and support.
“Item. After the decease of my wife, Margaret, I order and direct that all my real estate not disposed of in the lifetime of my wife, be sold by the surviving executor of my estate, and that with proceeds of sale, together with my personal property, he make distribution equally among all my children and my grandchild, Peter Frismuth (excepting my son John), share and share alike, and in event of the death of any of my said children without lawful issue, then I bequeath said share to my children then living, share and share alike.
“Item. I hereby empower my wife, if she so elect, to devise the sum of eight thousand dollars, the interest whereof I have before directed to be paid to her.”

The widow, Margaret Conover, died October 1st, 1893. She left a will, from which is extracted the following clause:

“Second. Whereas, my late husband, Peter P. Conover, in and by his last will and testament, having given and bequeathed to me the interest and income of the sum of eight thousand dollars, and having also, in and by his said last will and testament, empowered me to bequeath and devise the said sum of eight thousand dollars, in words as follows:
“Item. I hereby empower my wife, if she so elect, to devise the sum of eight thousand dollars, the interest whereof I have before directed to be paid to her.
“ Now, therefore, having elected and hereby electing to exercise the said power conferred upon me by said last will and testament of my said husband, I do hereby exercise such power, and in pursuance thereof do dispose of said sum of eight thousand dollars, as follows:
“I give, bequeath and devise the same unto my daughter, Miss Huldah Conover, and in case of the death of my said daughter before me, I do in that event give, bequeath and devise said sum of eight thousand dollars in equal shares to my two sons, William L. and Elias H. Conover. And I do hereby empower and direct the surviving executor or the legal personal representative of my said hjasband to pay over and dispose of said sum of eight thousand dollars to the persons to whom I have given, bequeathed and devised the same as aforesaid.”

She appointed Alfred Walling as ber executor.

The will of Peter P. Conover, already mentioned, was executed June 6th, 1878. At that time he seems to have had money invested in stocks. He had fifty shares of Pittsburg, Fort Wayne and Chicago preferred stock of the par value of $100 per share. For this stock he had paid $4,500 in 1868 or 1869, but at the time of the execution of the will it was worth, in the market, $5,000.

He also had at this time, three seven-per-cent, bonds of the Cincinnati, Richmond and Fort Wayne railroad, par value $1,000 each; the market value, in 1878, of this was $700 per share. It is probable, but not certain, that he had no other stocks.

Whether he had any personal property aside from this stock and these bonds, in 1878, does not appear in the testimony. It does appear that, at the time of his death, his personal estate did not amount to $8,000. He died seized of real estate worth upwards of $15,000, all of which he had owned from the time of the execution of his will. The value of his real estate at the time he made his will is estimated at $25,000 to $30,000.

Testator sold the fifty shares of railroad stocks, in May, 1888, for $7,000.

In addition to- the testimony taken before the master to show these facts, there was also testimony introduced for the purpose of showing that a part of the testator’s estate had come to him through relatives of his wife. Elias Conover, son of the testator, testified that he heard a conversation between his father and his mother more than nineteen years ago. His father, he says, handed his mother a paper and said:

“ ‘ Mother, there is the paper that I promised you; ’ she took it, looked at it and said, ‘It should have been for $2,000 more’ — that it was $6,000 she got by her father; the $2,000 she got- from her brother, her mother and her aunt; father said he had no recollection of anything of that kind, about the $2,000 ; she kept this paper for $6,000.”

This testimony was objected to as incompetent and immaterial. It was material for the purpose of showing an admission on the part of the testator that he recognized his wife’s claim against him, of some kind, for at least $6,000, and therefore as displaying the relations existing between him and his wife in respect to the property at the time he made his will. But it was delivered by Elias Conover, a party to the suit, a son of the testator and a residuary legatee under the will of his father. His share of the estate, and therefore his claim against the executors, will be affected by. the decision of the question at issue in the suit. The executor, it is true, was sworn, but his testimony does not clearly appear to have been in respect to transactions with, or conversations by, the testator. So I think the testimony of Elias was incompetent, Burnett v. Smith, 8 Stew. Eq. 314.

The first question, as already observed, is whether the bequest of the $8,000, contained in the third clause of Peter P. Conover’s will, is a specific or a demonstrative legacy. The importance of this question arises out of the fact that the testator during his life converted the stocks mentioned in that clause, so that at his death they were non-existent as a part of his estate.

One of the attributes of a specific, as distinguished from a general legacy, or from a demonstrative legacy, is that if the property given in specie does not exist at the death of the testator, there is nothing upon which the gift can take effect, and the legacy is necessarily lost.

A general legacy is payable out of any personalty, or, if properly charged, out of the real estate of the deceased. In this respect a demonstrative legacy has the quality of a general legacy. It differs from a specific legacy in this respect, that the former bequeaths certain property in specie, while the latter gives generally a sum of money to be primarily raised out of certain specified property.

If there is none of the property existing out of which it is to be raised, it becomes a general legacy, payable out of the general estate. If a part of the property is existing, but such part is insufficient to pay all of the demonstrative legacy, the remainder becomes a general legacy. So it is never adeemed by the nonexistence of the specific property out of which it is directed to be raised.

If, therefore, the gift in question is demonstrative, i. e., of a sum of $1,000 to be raised out of stocks, then the stocks not being in existence at the time of Conover’s death, it is a general legacy, payable out of his estate as such. If, however, the gift was of the stock in specie, nothing passed to his widow for her disposition by will. On account of this liability to extinguishment, contrary to the intention of the testator, by the destruction or conversion of the property specifically given, the tendency of courts is to lean towards such a construction of the will as will make the. bequest general or demonstrative rather than specific. Norris et al. v. Executors of Thompson et al., 1 C. E. Gr. 218.

The language employed by the testator, in making the bequest now in question, brings it within a much-discussed class of cases. Of all the nice distinctions which have been drawn in arriving at testamentary intent, there are none finer than those which have been evolved by cases of gifts of money or of a sum of money, coupled with the words “ invested in securities,” or “ in stocks,” or “ in shares,” or “ in bonds.”

Slight indications in other parts of the will are relied upon to discover whethér, by the use of such language, the testator meant to give the stocks, or securities, or bonds, or shares in specie, or whether he merely meant to give a sum of money which happened to be invested in such stocks or bonds, or was to be so invested, and so meant to indicate that the sum of money given was to be paid out of such securities. Perhaps the most cited case, in the English court of chancery, is Mytton v. Mytton, L. R. 19 Eq. Cas. 30. A testatrix, having £3,000 East India debenture bonds, gave a legacy to her executors, in trust, to pay to her. nephew, “ the sum of £3,000 invested in Indian securities.” Vice-Chancellor Malins held this to be a demonstrative and not a specific legacy. In the subsequent case of Page v. Young, L. R. 19 Eq. Cas. 501, there was a bequest to “my dear sister ” of the interest of £4,500 in the funds for her absolute use and benefit. This bequest was followed by specific gifts to the same legatee, then followed the words “ at her death to M. A. H., the funded property to H. Y.” The same vice-chancellor Avho had decided Mytton v. Mytton held that this bequest was specific, because, looking at the situation of the testatrix, he was of the opinion that she intended to mean “ my money that is now in the funds.”

The last reported case decided by the English equity courts, of which I am informed, is that of Pratt v. Pratt, L. R. Ch. 491 (1894). The bequest in this case was of £800, invested in two and a half consols. Judge North, after a review of many cases, held that this was a specific bequest of the consols. He admits that the only point of difference between this bequest and the one in Mytton v. Mytton, supra, consists in the fact that in the former the testator gives “the sum of £3,000,” while in the latter he gives, not the sum of, but simply £800. He seems to think that there is a distinction between the gift of “the sum of £-invested in securities” and of “£-invested in .securities.”

In Giddings’ Executors v. Seward et ux., 16 N. Y. 365, the bequest was “ of the sum of $1,200 and interest on the same contained in a bond and mortgage.” There was a subsequent provision that the sum was given to the legatee for life, with a limitation over. The New York court of appeals held this to be a demonstrative legacy. Judge Selden says: “The form of expression is not one that would naturally be chosen to manifest an intention to make a specific bequest of the bond and mortgage itself. The leading subject of the gift is not the bond and mortgage, but the sum of money mentioned.”

Little assistance in arriving at testamentary intention in this respect is to be obtained from an examination of the cases in detail. Such an examination would show that, in determining whether, by the use of this formula, the testator means to give the sum of money or to give the specific stock or share or bond in which it is invested, every expression in the will is scanned to arrive at the intention of the testator. When there cannot be found any particular language which can be pressed into use for this purpose, then the courts seem to go upon the ground that the testator is presumed to have intended to make a sensible and equitable disposition of his property, and if the bequest is to a person so related to the testator that the ademption of the gift could not have been anticipated by the testator, then the bequest will be held to be general, to save it from extinction. This seems to have been the ground upon which Mytton v. Mytton, supra, and Page v. Young, supra, were decided.

If, in the present case, there were no testimony exhibiting the character of the property owned by the testator at the date of the execution of his will, I think it would be clearly inferable that the testator, in using the quoted language, meant $8,000 which was to be invested in stocks. This would undoubtedly fix upon the gift the character of a general and not of a specific legacy. The fact disclosed in the testimony upon which an argument in favor of regarding it as a specific gift of the stocks, is that it seems almost certain that, at the time of executing the will, the testator held stock and bonds of the nominal value of $8,000; therefore, it can be argued, he must have meant to give the sum of $8,000 then invested in stock. If he had used the form of expression, “ now invested in stocks,” it would, according to Vice-Chancellor Malins, in Page v. Young, have implied a specific bequest. In Robinson v. Addison, 2 Beav. 515, however, the testator owned fifteen and a half shares of the Leeds and Liverpool Canal Company. He gave in trust to one legatee five and a half shares in the Leeds and Liverpool Canal Company, to another five shares, and to still another five shares. The bequest, it is perceived, was of the exact number of shares owned by the testator at the time of the execution of the will, and yet it was held to be-a general legacy. The master of the rolls remarked, “there is no description or reference to show that he meant the particular shares which he had at the date of the will.”

Looking at the form of words employed in making the present bequest and at the whole face-of the will, it is difficult to say whether the testator meant to give absolutely the sum of $8-,000 or to give the stocks and bonds of the nominal value .of $8,000. It is to be remarked, however, that if he had intended to make a specific gift of the stock and the bonds, it would have been easy for him to have given them by name. But, by employing the words “ the sum of $8,000,” in the first clause, and by repeating it in the succeeding clause, he has left it doubtful whether his intention was not to give the sum of $8,000, which happened at that time to be invested in w7hat he termed “ stocks.” It is probable that he had no notion that, in case of the fluctuation in the value of stocks, or from any reason, it should become politic to change these securities, the gift would thereby become extinguished. I shall therefore lean towards that construction which prevents ademption, and hold this to be a demonstrative legacy.

The next question to be resolved is whether this legacy is a charge upon the real estate of the testator. If so, it must be charged by express words or by necessary implication.

There are no express words charging it upon the land. But it is claimed that there are several features in the will which display an intention that the legacy shajl be paid out of the realty in default of sufficient personal property. It is insisted that the will provides for an equitable conversion, by which the realty becomes personalty for all the purposes of the will, including the payment of this legacy.

In scanning the will, it will be perceived that the testator confers upon his executors the power to sell, during the life of his widow and with her consent, any part of his real estate. This, however, is not a conversion, for the power to sell is a discretionary one, and not a direction to sell. Then there is a further power given. After the death of the widow, the executors are ordered to sell the real estate and distribute the proceeds to certain persons in certain proportions. This is a peremptory order to sell. But it is apparent that this direction to sell upon the arrival of the period for distributing the estate, is only for the purpose of distribution. Now, no rule is more entirely settled than that a conversion, directed to be made for a particular purpose, transmutes the character of the property only so far as is necessary to effectuate that purpose. If it is for the purpose of paying legacies, it will not throw open the fund to simple contract creditors. 2 Jarm. Wills 217.

But i.t is said that the object of this conversion is for all the purposes of administration. In support of this the case of Smith’s Executrix v. First Presbyterian Church of Bloomsbury, 11 C. E. Gr. 132, is cited. That case, however, is dissimilar in its features from this. There are several particulars in which it differs, and upon these particular features the chancellor relied in holding that the testator intended, in that case, an out-and-out conversion for all the purposes of the will. From the will, taken together with the testimony in that case, the chancellor found that it was apparent to the testator, at the time he made his will, that his personalty was entirely inadequate to pay his debts and legacies. Again, the testator directed a part of his realty to be sold, and, out of the price, that all debts should be first paid.” This was held to import that legacies should be subsequently paid out of the same fund. Again, the testator expressed an intention to dispose of his whole property, while, in fact, if the proceeds of the land were not applicable to the payment of the legacies, it was not disposed of at all by the will. Now, none of these features appear in the present instance. It does not appear that the testator knew that his personalty was insufficient to pay his debts as well as this legacy. Again, there is no clause ordering his debts to be paid, first or last, out of the proceeds of any real estate. Again, it does not appear that the testator knew that he would die intestate, if this legacy was not paid out of the proceeds of his realty. All the features, therefore, which were relied upon in the preceding case, as the ground of decision, are absent from this. It may be remarked, also, that the clause providing for the sale of land and distribution of proceeds is the same as that found in the will construed in Leigh v. Savidge, 1 McCart. 125. The question in that case was whether certain legacies were chargeable upon the land. It was held that they were, but the direction for sale and the division of the proceeds, was not even advanced as a ground for reaching that result. It seems to me that the sale of the real estate made during the life of the widow, under the discretionary power, as well as the sale ordered to be made at her death, were for purposes other than the payment of this legacy.

But it is insisted that, at least, the proceeds of the sale of real estate made during the life of the widow, with her consent, must be regarded as personalty, otherwise the testator died intestate as to the proceeds of such sale, and that if it be regarded as personalty at all, it is applicable to the payment of this legacy.

As already stated, the testator did empower his executor to sell any of his real estate, with the consent óf the widow during her life, and to invest the proceeds thereof, and to pay her the interest arising from the same during her life. This power was so far executed that there appears to have been sold during this period enough of the real estate to realize the sum of $2,250. If this sum is to be regarded as real estate for all purposes, then in respect to it the testator undoubtedly died intestate. This appears from the last clause of the will, in which he orders his real estate to be sold after the death of his widow, and the proceeds of such sale, together with his personal property, to be distributed. All that was to be distributed, therefore, of his real estate, under this clause, was such as was sold subsequent to the death of the widow. The real estate, which produced the $2,250, having béen sold before the death of the widow, these proceeds were unaffected by this clause, unless the testator regarded it as personalty for the purpose of distribution, after his widow’s death, as well as for the purpose of investment during her life. In my judgment, this was his intention. He regarded any money, or evidence of debt existing at the arrival of the period of distribution, whether derived from the previous sale of realty or not, as personal property for the purpose of distribution. If this was his intention, then he did not die intestate of any portion of his estate.

But if this view is erroneous, still there is absolutely nothing to show that he expected that any property sold during the life of his widow would be required to pay this legacy, and that by such application intestacy would be prevented. So I conclude there was no conversion of the property, except for the purpose mentioned, which purpose did not include the payment of this legacy.

But the appointee of the widow invokes another rule of construction, which, it is claimed, charges this legacy upon the land. This doctrine is known as the rule in Greville v. Brown, adopted by the court of appeals in the case of Corwine v. Corwine, 9 C. E. Gr. 579, and followed and explained in Johnson v. Poulson, 5 Stew. Eq. 390. This doctrine is, that where legacies are given generally, and the residue of the real and personal property is afterwards given in one mass, the legacies are a charge upon the residuary, real as well as personal property.

But there is no blending of a r.esidue of real or personal property in this will — the whole proceeds of the real estate are given in the last clause.

I will advise a decree, therefore, that the sum of $8,000 was given as a demonstrative legacy, but that it was not chargeable upon the real estate of the testator.


source: Caselaw Access Project

author: Beed, V. C.

license: Public Domain

text:
    John Ruckelshaus v. Charles Borcherling.
    A tenant by the curtesy, having let to a tenant a store which his deceased wife had owned, died during the term. At his death there was found a recorded deed of said store, purporting to have been made to him by the heiress-at-law of his wife, of which deed the lessee of the store was informed, and thereupon paid his rent to the agent of the heirs of the lessor, who distributed it to the numerous heirs, who were living in different parts of the United States. After the death of the lessor, the heiress-at-law was apprised of the existence of the deed purporting to have been made by her, but failed to inform the lessee that she repudiated the deed and claimed to be the owner of the store. Sixteen months after the lessor’s death she began an action of ejectment against the lessee, claiming that the said deed was a nullity, and she recovered judgment. — Held, that the heiress will be restrained from compelling a repayment of the rent due from the time of the lessor’s death to the time of beginning the action for ejectment, on the ground that she had estopped herself by her silence, when she should, under the circumstances, have warned the tenant of the invalidity of the deed.
    On bill, auswer and proofs.

      Mr. Joseph Coult, for the complainant.

      Mr. Chaxm'eey G. Parker and Mr. Cortlandt Parker, for the defendant.
   Beed, V. C.

The facts set up in the bill will be found stated in detail in the opinions delivered in this court and in the court of errors and appeals when this cause was before those courts on demurrer to the bill. 3 Dick. Ch. Rep. 436 ; 4 Dick. Ch. Rep. 340.

The following statement is deemed sufficient for the present purposes.

Ruckelshaus, the complainant, was a tenant of Hugh H. McCulloch under a five-years’ lease, which would expire on April 1st, 1885. McCulloch died on May 3d, 1883. The rented premises had been the property of McCulloch’s deceased wife. McCulloch’s estate at the time of the renting was that of tenant by the curtesy. At his death the heir-at-law of his deceased wife was her sister, Mrs. Mary J. Oehme. There was, in fact, upon record at the time of McCulloch’s decease, a deed purporting to be made by Mrs. Oehme, conveying the rented property to McCulloch in his lifetime.

Upon McCulloch’s death, Ruckelshaus was concerned to know to whom he should thereafter pay his rent. In the absence of any conveyance by the heiress, Mrs. Oehme, to McCulloch, the rent would be naturally paid to the former. Ruckelshaus, upon inquiry, however, was informed of the fact that Mrs. Oehme had, during McCulloch’s life, made the deed mentioned. Ruckelshaus thereafter, for about sixteen months, paid the rent to the agent of the heirs of McCulloch, who distributed it to numerous heirs living in different parts of the United States.

On July 20th, 1884, Mrs. Oehme, claiming that the deed which purported to have been made by her, conveying the property to McCulloch, was obtained by fraud, and that Ruckelshaus’ term had expired with the death of McCulloch, began an action of ejectment against’Ruckelshaus. In this action she succeeded. Following the judgment in that case, she brought an action for mesne profits and recovered the value of the premises from the period of McCulloch’s death down to October 1st, 1885, when Ruckelshaus began the payment of the rent to her.

This bill is filed to restrain the collection of a part of the judgment recovered for mesne profits. It is that portion of the judgment which includes the value of the premises from the death of McCulloch to the time of bringing the action of ejectment. The ground upon which the court is asked to restrain the collection of this portion of the judgment is that Ruckelshaus was led to believe, either by the words of Mrs. Oehme communicated to him, or by her silence, when it was her duty to enlighten him, that the deed purporting to have been made by her to McCulloch was bona fide, and so he was led to pay his rent to the heirs of McCulloch.

The estoppel thus raised against the representation of Mrs. Oehme is rested upon two grounds. The first is that Mrs. Oehme admitted that she made the deed purporting to be executed by her to McCulloch; that she knew at the time of these admissions that her words would be communicated to Ruckelshaus, and that he would be likely to shape his conduct by their import.

The second grouud is that, when she should have known that Ruckelshaus was likely to pay his rent to the agent of the heirs of McCulloch, in the belief that McCulloch died seized in fee of this property, she did not apprise him that she claimed to be still the owner of the property.

The facts upon which the first insistence is rested are these-: It appears that when McCulloch died, one William McCulloch, a nephew of his, was at his uncle’s house. After his uncle’s death, William assisted in looking after his affairs. Among the papers of McCulloch, he found two deeds, one purporting to convey some harbor lots to McCulloch, and another purporting to convey to McCulloch the rented premises in question. These deeds purported to be executed by Mary J. Oehme.

William McCulloch seems-to have asked a Mr. John H. Ease to administer upon the estate of McCulloch, deceased. Mr. Ease excused himself from undertaking the office, on the plea of the pressure of his own business. Upon his declination, Charles M. Ease, the son of John H. Ease, was selected, the father having promised that he would render him what assistance he could in the practical administration of the estate. Charles M. Ease having qualified as administrator, McCulloch delivered to him the two deeds mentioned. Ease was not only the administrator of McCulloch, but he was appointed the agent of the heirs of McCulloch.

Mr. Kase says that he had an interview with Mrs. Oehme upon an occasion when he was examining the papers of the deceased. In that interview, he says she told him that she had conveyed to McCulloch a part of the harbor lots. He does not say, however, that she mentioned the deed to the Market street property.

The principal witness for the complainant, as to the admissions of Mrs. Oehme, is the father of the administrator, Mr. John H. Kase, who was interested in the administration of the estate in the manner already mentioned. His testimony is that he went to the house of the deceased, where Mrs. Oehme had lived with McCulloch (and where she still lives), to make an inventory, and had several talks with her. He says that, in one of these, which occurred one or two weeks after the letters of administration were taken out, these deeds were mentioned. He says that she told him that she had given a deed for the Market street property, but not a deed for all the harbor lots. He says he told her that his son had a power of attorney, from the heirs of McCulloch, to collect the rent of the Market street property, and that he wished to inform Ruckelshaus of all the facts, so that he would have no hesitation in paying the rent. He further says that he communicated these facts to Ruckelshaus, and, on one occasion, showed him the deed. He did this in response to an inquiry from Ruckelshaus, whether it was proper for him to pay over the rent to the agent of the heirs of McCulloch. Mr. Kase also expressly states that he never knew that Mrs. Oehme made a claim to the Market street property until the action of ejectment was brought by Mrs. Oehme to eject Ruckelshaus, on July 20th, 1884.

The testimony of Ruckelshaus is to the effect that, after the death of McCulloch, he had hesitated about paying his rent until assured that the heirs of McCulloch had the right to receive it. He supports the testimony of Mr. Kase that a deed was shown him, and that Mr. Kase repeated to him the conversation which he says he had with Mrs. Oehme. This is the substance of the testimony for the complainant upon this point.

The principal witness for the defence is John Eastwood. His testimony goes to directly contradict the testimony of Kase, that he never knew that Mrs. Oehme made any claim to the Market street property until July 20th, 1884. Eastwood says that, in the beginning of the summer of 1883 he heard a conversation between Mr. Kase and Mrs. Oehme, in which conversation Mrs. Oehme repudiated the suggestion of Kase that she had parted with her interest in the Market street property.

His statement is this: He was passing the Second National bank, on his way to the railway station, to take a train for New York city. Mr. John H. Kase and Mrs. Oehme, he thinks, were standing near the bank door, and as he passed, Mrs. Oehme called to him. He said to her that he could not stop, because he was on his way to the train. He says that Mr. Kase and Mrs. Oehme were talking quite excitedly, and, as he gathered, about some rents which Mr. McCulloch had collected.

Mr. Kase said to her :

“‘You know, Mrs. Oehme, that you do not own the property in Market street — the Buckelshaus property;’ her reply was, ‘What do you say — I don’t own that property?’ he said, ‘No, you don’t;’ and she said, ‘Well, if I don’t own it, I should like to know who does, and I will let you see who owns it before you get through with me.’ ”

The witness says that he then told Mrs. Oehme to go to a lawyer, and Mr. Kase acquiesced in this advice and said: “ I will send you to a lawyer.” She replied to Mr. Kase, “ I will not go to any lawyer- you recommend,” and then asked Mr. Eastwood if he would recommend one, and Mr. Eastwood told her to go to Mr. Borcherling.

Mr. Borcherling, who was also sworn as a witness, says that Mrs. Oehme appeared at his office with Mr. Kase, obviously on the heels of the conversation above detailed.

I have now stated the substance of the testimony upon this phase of the case. It is perceived that the statement of Mr. Eastwood, if true, seems to be entirely destructive of the theory that Mrs. Oehme had acknowledged her deed in her interview with Mr. Kase, upon which fact the first element - of estoppel rests, for it is incredible that she should have understandingly recognized the genuineness of that deed in her interview with Mr. Ease in June, and then, about the same time, should have indignantly refuted his statement that 'she did not own the Market street property.

While Mr. Eastwood’s testimony, when sworn upon a previous trial between the same parties, varied somewhat in details from his testimony here, it was, in substance, identical as to- the recollection of the remarks of Mrs. Oehme concerning her title to the Market street property, Mr. Eastwood had no interest whatever in the matter, and while the repetition of the words of a conversation is always to be viewed with circumspection, it does not seem possible for him to have been mistaken as to the general import of this conversation in respect to the point in issue.

Neither had Mr. Ease any personal interest in the matter. He was only, for’his son, representing the interests of the heirs. I think that he details what he recollects as the purport of his conversation with Mrs. Oehme. He naturally assumed that the deeds were all right. His recollection of his interview with her probably left an impression that he had specifically informed her of the character and effect of the deeds, while it may be that his reference to them was not such as to apprise her that these instruments conveyed away the specific property mentioned in them, and stripped her of her title to the Market street store. I have little doubt that he spoke to Ruckelshaus about the deeds, and told him that they were all right, nor do I doubt that he thought they were all right, and, at the time he gave his testimony, that he believed he had called Mrs. Oehme’s attention to them, with the result which he stated. It may be that he did so, but I do not think, in the face of Mr. Eastwood’s testimony, that this fact is proved. It seems more probable that, if he spoke of this deed at all, it was in so general a way that Mrs. Oehme did not realize what was claimed to be its effect.

Upon the first ground, namely, that Mrs. Oehme represented that the deed to McCulloch was genuine when she was informed that such statement was needed to convince Ruckelshaus that he should pay his rent to the agent of the heirs of McCulloch, I think that the complainant has failed.

The second ground, as already observed, does not depend upon any declaration made by Mrs. Oehme, but rests entirely upon her silence, when, as it is insisted, the circumstances put upon her the duty to speak.

The insistence is that it is proved that she was informed of the claim that she was disentitled to the Market street property, and that by a deed purporting to have been executed by her the record title was in the heirs of McCulloch; that upon being so informed she left Ruckelshaus in ignorance of the fact that she challenged the genuineness of the deed; that the result of such silence was to permit Ruckelshaus to pay his rent to those in whom the legal title apparently resided; that such payment to said heirs Mrs. Oehme should have reasonably anticipated as the natural result of her muteness. The facts conclusively established are these: It is shown by the defendant’s own witness, Eastwood, that early in June, 1883, Mrs. Oehme was told that the Market street property did not belong to her. , It is proved that she immediately consulted Mr. Borcherling, and that Mr. Borcherling caused the records to be searched, and discovered the existence of two deeds, one of which deeds purported to be made by Mrs. Oehme, conveying to McCulloch the Market street property. It is proved that the ejectment suit was not begun until July of the following year, and that Ruckelshaus paid his rent, during this interval, to Mr. Ease as the agent of the heirs of McCulloch. It is proved that Ruckelshaus had been careful in his inquiry concerning the right of the heirs to receive the rent, and that he was induced to make such payment to them, by assurances from Mr. Ease and his counsel that title had been in McCulloch by force of the Oehme deeds. It is proved that, up to the time of the commencement of the ejectment suit, July 20th, 1884, he was never informed by Mrs. Oehme or by any other person that there was a cloud upon the title of the heirs. Once, according to the testimony of one witness, she in person collected the rent of her store, the next to one of Ruckelshaus’, but neither at that time nor at any other time did she visit the complainant. All this time she is presumed to have been in communication' with intelligent counsel; she must be presumed to have known, as I have no doubt she was informed, that the record title of the property was in McCulloch just as the search of the record had disclosed; she must also have been presumed to have known that the rent belonged to the owner of the legal title, and that it would naturally be paid to those in whom the record showed such title. Had Mrs. Oehme, under these circumstances, stood by, while one of the payments was made by Mr. Ruckelshaus to Mr. Ease, and held her peace, I do not conceive that there could exist a doubt that she, by her silence, would have precluded herself from saying that such payment should be again made to her.

Yet, it seems to me that, under the conditions, the imputation to her of knowledge that the tenant would pay and was paying the rent to such agent, is nearly as strong as if she had personally witnessed the actual payment. Here, then, we have the duty to speak, the failure to speak, and the conduct of Ruckelshaus induced by her silence. This embodies all the elements of an estoppel in pais. Upon this phase of the case, I think the complainant has proved his case.

But the counsel for the defendant interposes another objection. They insist that, even if the facts be as I have found them, and even if it follows, as a legal inference from those facts, that the defendant is estopped, yet the complainant is not free at this time to avail himself of the estoppel.

This insistence is put upon the alleged existence of a counterestoppel by record. It is argued that the record judgment, in the action for mesne profits, precludes the defendant from now setting up this estoppel in pais. The argument upon this point is, in brief, this: It is said that the facts set up in the bill were just as available as a defence in the action for mesne profits as it is now, as a ground for relief in this suit •, that it follows that the judgment in that action, upon general principles, must be regarded as finally settling this point against the complainant; that while the court of errors, upon the face of the bill, held that the estoppel there pleaded was excepted from the operation of this general rule, yet the exception was put upon the ground that when such defence was proffered on the trial of the action at law, it was overruled by the trial justice as not a defence available at law, and that this ruling was acquiesced in by the complainant, who had no exception thereto sealed; that the court of errors held that the defendant in the action at law had the right to regard the ruling of the trial justice as the law of that case, and so reserved to himself his right to invoke this equitable remedy. It is argued, therefore, that the reservation of the right to come into this court rests entirely upon the fact that the ground upon which the present relief is asked was the ground tendered as a defence in the action at law, and was there overruled.

Now, the point made by the defendant is that there is not to be found in this case any evidence that the ground now relied upon was the same ground that was set up as a defence in said trial.

This seems to be true if we regard the testimony taken at the hearing, for in it there is nothing to disclose what the course of events was in the trial of the action at law in respect to this matter. But, upon referring to the bill, it will be found that, in setting up the scope and character of the defence offered at such trial, it is not only charged that the complainant offered to prove that Mr. Ease had been told by Mrs. Oehme that she had executed the deed to McCulloch, and that Ease had so informed Ruckelshaus, but it is charged that the defendant offered to show that Mrs. Oehme lived in the city of Newark until long after the commencement of the suit, and from the time of the making of the lease to Ruckelshaus, and not far distant from the property in question; that she was the owner of the adjoining property; that she personally visited the adjoining property frequently and collected the rents, and that she never, during all the time Ruckelshaus was paying rent to the McCulloch heirs, asked for any rent, made any inquiry in relation ‘thereto, or made any inquiry about the premises in any way, or ever alluded to them in the slightest manner as her own.

This part of the charge in the bill was admitted by the answer, and it contained, in substance, the facts upon which the complainant now relies to establish, the second ground of estoppel, namely, that she was silent when it was her duty to speak. No proof in the trial of the cause was essential.

The remaining question is in respect to the extent of the relief to which the complainant is entitled. By reason of the silence of Mrs. Oehme, he paid the rent to the agent of the Mc-Culloch heirs from May 3d, 1883, to July 20th, 1884. That rent he was bound to pay to some one — either Mrs. Oehme or to the heirs of McCulloch. He is to be protected from being compelled to repay for any portion of this period.

So far as the present judgment includes the profits for this interval of time, its collection should be enjoined. The effect of the judgment in the suit for mesne profits is not, however, to compel a repayment of this entire amount. From the rental' of $2,500 a year, which sum was fixed upon as the yearly value of the property, there was upon the trial, by consent, deducted the amount of certain payments for interest upon a mortgage and for taxes and repairs, which had been paid by Mr. Ease as the agent of the McCulloch heirs. The amount of the judgment represents the sum total of the amount which Ruckelshaus was bound to pay for that period, less the deductions made on account of the matters just mentioned. Ruckelshaus, therefore, will be fully protected against the consequences of Mrs. Oehme’s conduct, by relieving him from the payment of that portion of the judgment which represents the annual value of the premises during the period mentioned, less the deductions allowed upon the trial. I think the deduction of the particular items paid by Mr. Ease should be applied at the time they were made, and all payments for interest, taxes and repairs made between the death of McCulloch and the commencement of the first ejectment suit should be deducted from the annual value of the property during that time, and the residue, with interest, should be regarded as the proportionate part of the judgment, from the payment of which Ruckelshaus should be discharged. .

A decree will be advised in conformity with these conclusions.


author: Emery, Y. C.

text:
    The Newark Coal Company v. Alexander F. Spangler.
    Defendant, who was doing business under the name of Newark Coal Company (unincorporated), on the formation of a corporation by that name, transferred to it his business and the good will thereof, and was taken by the corporation into its employ as an officer for four years. — Held, that the defendant, on the dissolution of his connection with the corporation and engaging in a rival business, must not be enjoined from advertising himself as formerly connected with such corporation.
    On application for preliminary injunction. Heard on bill and affidavit, and answer and affidavit.

      Mr. Adrian Hiker, for the motion.

      Mr. William J. Davis and Mr. Edward A. Day, contra.

   Emery, Y. C.

The bill in this case is filed by the complainant, the Newark Coal Company, which is engaged in the business of buying and selling coal in East Orange, to restrain the defendant, Alexander Frank Spangler, from using the name of the company in any manner in the conduct of a similar business, and application is now made for a preliminary injunction pending final hearing. The bill and affidavit, and the answer and affidavit disclose the following undisputed facts: The defendant, Spangler, previous to March 18th, 1892, had for several years been carrying on the coal business under the name of the Newark Coal Company (unincorporated), and at that time a company was organized under the same name. Spangler and two other persons were the incorporators and subscribers, and, on the incorporation, Spangler, by bill of sale, conveyed to the company the goods and chattels used in carrying on his business, and also

■“ the good will of the Newark Coal Company (unincorporated), formerly carried on by A. Frank Spangler, in the city of Newark, county of Essex, and ■State of New Jersey.”

Spangler became president and director of the company on its organization, and continued to hold these offices until March 5th, 1896, when he ceased to be either a director or officer, but still continued to be a stockholder on the books of the company. After March 5th, 1896, Spangler commenced the coal business on his own account, locating his office near the company’s office, .and upon the signs at the street and on his office describes his business, “A. F. Spangler, formerly of the Newark Coal Company.” He has also issued a circular letter, describing himself in this also as “formerly of the Newark Coal Company,” in which he appeals for orders to the customers “ who have patronized him and his company for the past eleven years,” stating, among other things,

u that he originally established, owned and controlled the Newark Coal Company since April, 1885, and until he incorporated the company in March, 1892.”

The circular originally issued on March 13th, 1896, described the business as “A. F. Spangler & Company, formerly the Newark Coal Company,” but this circular was withdrawn and the present form, “formerly of the Newark Coal Company,” adopted, and his business is now carried on in this manner, his advertisements and circulars stating his connection with the Company, as “ formerly of the Newark Coal Company.”

The complainant alleges in this bill that the defendant is attempting to deceive customers into the belief that they are dealing with the complainant, but as this allegation is not supported by the affidavit, and is denied by the answer, which, in this respect, is also sustained by the form of the appeal in the circular, it cannot be considered as affording any basis for the preliminary injunction. The real question is whether the complainant is entitled to such injunction on the above undisputed facts.

The defendant, on the sale of the good will, having made no covenant with the company not to engage in the business, it is clear that he cannot be prevented from exercising this right to engage in the business even as- a rival to the company. Richardson v. Peacock, 6 Stew. Eq. 597 (Errors and Appeals, 1881). And if the contract of sale, which was the only contract he made with the company, does not, either by its expressed or implied obligations, restrain him, it is also clear that, in carrying on such rival business, he has the right to state his former connection with the business sold. In Hookham v. Pottage, 8 Ch. App. 91, 95 (at p. 94 note), Vice-Chancellor Malins alludes to what he calls “ the well-established rule that a man, having been in the employ of a trader of reputation, is entitled in a fair manner to say that he comes from him.” Lord-Justice James, on appeal in this case (at p. 95), says: “ I agree that defendant had a right to state that he was the Samuel Pottage formerly manager and afterwards partner in the firm of H. & P., and that he had a right to avail himself, by the statement of that fact, of the reputation which he had acquired.” He has, however, no right to make statement in such a way as to represent that he was carrying on the business. This was not a case of sale of the good will by one purchaser to another, but a dissolution of the firm by decree of court, on which “the business” went to complainant, who continued it, not under the name of “ H. & P.,” the firm name, but under the name of “ H. & Co.” ' Defendant set up business a few doors off, as “P.,” from “H. & P.” In this case it was found, as matter of fact, that the manner of putting up the names was calculated to lead the public to suppose that Pottage was still connected with the old firm, and an injunction was therefore ordered. A sale of the business or trade seems to be considered a different thing from the sale of the “ good will.” See 14 Ch. Div. 600. Whether, on a sale of “ good will,” there is an implied covenant not to use the name in any manner, was not decided in this case or any other to which I have been referred.

“Good will” is a term somewhat indefinite, and it may be impossible so to define it as to include an application to all cases.

In Cruttwell v. Lye, 17 Ves. 346, Lord Eldon said that the good will which is the subject of sale is .nothing more than the probability that the old customers will resort to the old place, but Sir George Jesse], in Ginesi v. Cooper & Co., 14 Ch. Div. 596, 601, points out that this definition was one which was applicable only to the facts and situation in that case, and in the same opinion gives the following wider definition of good will, made by'Vice-Chancellor Wood in Churton v. Douglas (a leading case), 5 Jur. (N. S.) 887, 890: “ It would be taking too narrow a view of what is laid down by Lord Eldon [in Cuttrell v. Lye], to say that good will is confined to that. Good will,’ I apprehend, must mean every advantage — every positive advantage, if I may so express it — as contrasted with the negative advantage of the late partner not carrying on the business himself, that has been acquired by the old firm in carrying on its business, whether connected with the premises on which the business was previously carried on or with the name of the late firm, or with any other matter carrying with it the benefit of the business.”

If this definition should be applied to the present case, the question is whether the right to all advantage connected with the name of the company gives, as against the vendor of the good will, the exclusive right to use the name of the firm and prevents vendor from endeavoring afterwards to acquire business by advertising that he was formerly connected with the firm or company. That such advertisement would, to some extent, detract from the value of the good will which he has sold, and that such was the intent, seems to me quite clear. But, even admitting this effect and intent, the question at issue is not solved, for if this were the whole test, then the vendor of a good will could not set up a rival business in the neighborhood at all, as this would almost necessarily affect, to some extent, the good will sold.

The vendor of a “good will” who has not expressly restricted himself against carrying on the business, being permitted by law to carry on a rival business wherever he chooses, may push his business as any stranger or outsider might, even though this does interfere with the business he has sold, and the real question, therefore, is narrowed down to this: In thus pushing his rival business, what acts., if any, must the vendor be restrained from? As wqs said by Lord-Justice Cotton, in Pearson v. Pearson, 87 Ch. Div. 145 the real difficulty is to draw the line, and in this case, by reason of this difficulty, he refused to hold that direct solicitation of the old customers could be restrained, and on this point overruled Labouchere v. Dawson, L. R. 13 Eq. 322, decided by Lord Romilly and strongly approved by Sir George Jessel in Ginesi v. Cooper, 14 Ch. Div. 596. But, in a very late case, the house of lords has considered the whole subject, and in Trego v. Hunt, App. Cas. 7 (1896), has overruled Pearson v. Pearson, and has finally settled the law in England in accordance with the doctrine in Labouchere v. Dawson, viz., that where the good will of a business is sold (without further provision), the vendor may set up a rival business, but he is not entitled to canvass the customers of the old firm, and may be restrained by injunction from soliciting any person who was a customer of the old firm prior to the sale, to continue to deal with the vendor or not to deal with the purchaser. The doctrine is put upon the ground that these acts are direct and intentional dealings with the good will sold and efforts to destroy it, in which the vendor takes advantage of the business connection of the old firm and his knowledge of that connection. Lord Herschell, pp. 20, 21.

In Richardson v. Peacock, 6 Stew. Eq. 597, the case of Labouchere v. Dawson was cited with approval by Mr. Justice Dixon, in delivering the opinion of the court, and I think the doctrine of that case may be taken to be so far settled in this state as to entitle the complainant in this case to an injunction against such solicitation of old customers, had the injunction been asked for this purpose. But the complainant is not now pressing, or even asking for, such injunction, but for an injunction against any use of the name whatever, even when the use of the name is merely to state the former connection of the vendor therewith. As to this particular act of the vendor, Lord-Justice Cotton, in Pearson v. Pearson, supra (at p. 157), says: “ It is admitted that a person who has sold the good will of his business may set up a similar business next door and say that he is the person who carried on such business, although such proceedings manifestly tend to prevent the old customers going to the old place.” And even Lord Herschell, in Trego v. Hunt, supra (at p. 20), quoting this passage, does not controvert this statement of a vendor’s rights. There are, however, no cases cited upon the question, and notwithstanding these intimations of opinion by these distinguished judges, arguendo, it now strikes me that this act of the vendor appealing to the public for custom, on the ground of this former connection with the company, comes within the principle established by Trego v. Hunt, and if this were the only question in the case, should be enjoined as a direct and intentional interference with the very thing sold in the good will. The purchaser was entitled to the name, and, as Vice-Chancellor Wood says, in Chuston v. Douglas, supra, to every advantage connected with the same. This would, of course, include any advantage then accruing to the name or to the business by reason of the vendor’s previous connection with it, and to now base his appeal to the public for business, on the ground that he was formerly connected with the business sold, seems to be a direct attempt to appropriate to himself part of that which he has already sold and received pay for. The permission to conduct a rival business is allowed to the vendor of the good will in the interest of the public and to prevent restraint of trade. But in carrying on this business, he must not, as was said by Lord Macnaughten, in Trego v. Hunt, supra (at pp. 24, 28), “ make his approaches from the vantage ground of his former position, moving under cover of a connection which is no longer his. He may not sell the custom and steal away the customers in that fashion.” If, therefore, the only question in this case was whether the defendant, having sold the good will of his business, was now entitled to carry on a rival business, stating his former connection with the business sold, I should be inclined, as at present advised, to grant the injunction. But the difficulty with the complainant’s case is one which reached beyond this sale of the good will. The business and good will which the defendant, Spangler, sold, was sold in March, 1892, and was the good will of the Newark Coal Company, and as to the business of this unincorporated company it might be held that he was under an implied obligation not to attempt to withdraw it to his new business by stating' his former connection therewith. But, after this sale of the good will, the vendee, the Newark Coal Company, the present complainant, assuming the name in which the business had been previously carried on, succeeded to the old business and has carried on its own business under the same name for four years, taking the defendant, Spangler, into its employ as an officer. Upon entering this employment of the complainant, the defendant made no contract that, on ceasing to be so employed, he should not be at liberty to state his connection with the company which had employed him. Having been with the-company as an officer for four years, he is entitled, on leaving its employ and in the absence of any contract, to state truly the fact of his connection, and in my judgment any implied obligation connected with the sale of the good will to the company originally, cannot, on any facts now appearing in the case, be extended to prevent his making a statement of his connection with the company of which he was for four years director and officer.

The injunction against the use of the name, for the purpose of stating his former connection with the complainant, must, therefore, be denied, and the fact that the use of the complainant’s name for this purpose may also tend to detract from the business which had formerly belonged to the old “ good will ” which he had sold, cannot deprive him of the lawful use of the name. The application here is to prevent the use of the name altogether, and if for any purpose defendant has the right to use the name, it cannot be altogether restrained.


text:
    William W. Trout v. Margaret E. Lucas et al.
    1. Where the right to enforce building restrictions is of a purely equitable nature, a court of equity -will not enforce them by mandatory injunction, unless prompt application is made by the persons entitled to enforce the restrictions.
    2. Persons who are owners of the land entitled to the'benefit of the restrictions at the time of the violation, are entitled to apply for relief, and their grantees are barred by their acquiescence in the violation or delay in applying for relief.
    3. No relief against such violations can be granted upon a bill which discloses such acquiescence and delay, continuing for several years, on the part of complainant’s grantors and of complainant himself, and entirely unexplained.
    On bill and demurrer.

      Messrs. Hawkins & Durand, for the complainant.

      Mr. Frank P. McDermott, for the demurrants.
   Emery, Y. C.

The object of this bill is to enforce a covenant relating to building restrictions contained in a conveyance of lands made to one John C. Lucas by the Spring Lake Beach Improvement Company, and to compel the removal of a portion of a hotel building which has been erected beyond the limits fixed by the covenant. The case is heard on demurrer to the bill, which discloses the following facts as the basis for relief: The Spring Lake Beach Improvement Company, which was incorporated for the purpose of developing and improving real estate and the erection of buildings thereon, purchased for these objects a tract of about six hundred acres adjoining the Atlantic ocean, and situate in Wall township, Monmouth county, which it laid out into squares and lots or building sites, designating the tract by the name of Spring Lake. A map of the tract, showing the streets, avenues and the lots by numbers, was made in 1876 and filed in the office of the clerk of the county. Nearly three years after the purchase, and on January 20th, 1878, the company conveyed to one John C. Lucas lots Nos. 19 and 20, in block No. 21, as shown on the map or plan of lots, being lots adjoining each other, fronting on Atlantic avenue, and one of the lots (No. 20) being a corner lot fronting also on First avenue. The two lots together constituted one tract fronting one hundred feet on Atlantic avenue and one hundred and fifty feet on First avenue, and being at the northwest corner of said avenues.

The deed contained the following condition, on the part of the grantee, viz.,

“ that the party of the second part, for himself, his heirs, executors, administrators and assigns, covenants that he and they shall never build on the said premises within twenty-five feet of the front line thereof on avenues running east and west, and also on Ocean avenue.”

Atlantic avenue, on which these Lucas lots front, runs east and west.

In tire same year (1878) in which he received his deed, John C. Lucas erected a large frame hotel building on these lots, the building being three stories high, about one hundred feet long and thirty-five feet deep, the front of the building, one hundred feet, fronting on First avenue, and the south end, thirty-five feet, fronting on Atlantic avenue. The south line of the building was only twenty-one feet and seven inches from the front line of Atlantic avenue, instead of twenty-five feet as required by the covenant, being thus three feet and five inches over the line. On March 9th, 1878, about two months after the above conveyance to Lucas, the Spring Lake company conveyed to one David C! Spooner lot No. 11 of the same block (21), this latter lot being on the northeast corner of Atlantic avenue and Second avenue, fronting fifty feet on Atlantic avenue and adjoining lot 12, which was on the east. This deed was, so far as appears by the bill, the first conveyance, after the Lucas deed, of any lots on block 21 on Atlantic avenue, and this deed contained a condition or covenant similar to that contained in the Lucas deed. The title to this lot No. 11 remained in Spooner or his devisees for nearly eight years and until August 16th, 1886, when it was conveyed by the executor of Spooner to one Thomas A. Ward, and Ward and his wife, on January 9th, 1888, conveyed it to the complainant. The deeds to Ward and the complainant contained the same form of restriction.

On February 1st, 1886, and nearly two years before his purchase of lot No. 11 from Ward, the complainant purchased of the company lots 12, 13, 14 and 15, in block-21, together fronting two hundred feet on the north side of Atlantic avenue and one hundred and fifty feet deep, and his deed for these lots contained the same restriction on his part.

“In the winter of 1885 and 1886,” the defendant Lucas, as the bill alleges, reconstructed his hotel building and made additions thereto, one of the additions being an octagon tower, forming part- of the building on the south end of said building, commencing at the, second floor and extending above the roof and extending outward, southward, from the line of the said building. This tower extends, as the bill states, ten feet south from the line of the building, and is only about eleven feet from the front line of Atlantic avenue. In the following year (1887) the complainant erected houses on two of his lots, twenty-five feet from the front line of the avenue, at a cost of $10,000, and, as the bill says, it was while building his cottages that he discovered the hotel building encroached on the twenty-five feet reserved.

The additional facts alleged in the bill, upon which is based complainant’s equity to require a removal of the portion of the Lucas buildings in question, are that the restrictions in the several deeds were created by the company and authorized in the conveyances for the benefit of all the lots and lot-owners on said Atlantic avenue, in block No. 21; that Spring Lake is a summer resort sought principally because of its bordering on the ocean; that the lots of complainant are just west of the Lucas lots, which lie between complainant’s lots and the ocean, and that it is necessary to the complainant, for the full use and enjoyment by him of his said premises, that the condition should be observed and kept by all owners owning lots between complainant’s premises and the ocean, and that all buildings erected on their lots should be at least twenty-five feet back from the line of Atlantic avenue. The complainant claims the right of enforcing this condition in equity against the owners, who violated it before his purchase, and to have the portion of the buildings encroaching on the twenty-five feet removed. John C. Lucas having died in August, 1888, his widow and infant heirs are made parties defendant to the bill, which was filed on June 17th, 1889. A general demurrer for want of equity was filed on behalf of all the defendants, with additional specifications of acquiescence, laches and want of parties.

Under the above facts, it seems to me that the whole basis of complainant’s right to relief rests upon a right which is, in its nature, purely equitable. The defendants, so far as relates to the condition in question, are not under any legal liability to the complainant, for the reason that there is no privity between them, either of contract or estate. But courts of equity, in relation to restrictions of this character which contemplate a general plan of building for the common benefit of purchasers of lots, recognize the right to enforce them in equity, at the instance of'the original grantor or subsequent purchasers of lots, on grounds independent of legal liability. Vice-Chancellor Green, in De Gray v. Monmouth Beach Club House, 5 Dick. Ch. Rep. 329 (1892), after a very exhaustive and learned review of the cases, states (at p. Slfi) the principles governing this class of cases where a general plan or scheme is relied on, as follows: “The law, deducible from these principles and the authorities applicable to this case, is that where there is a general scheme or plan adopted and made public by the owner of a tract for the development and improvement of the property, by which it is divided into streets, avenues and lots, and contemplating a restriction as to the uses to which buildings or lots may be put, to be secured by a covenant embodying the restriction, to be inserted in each deed to a purchaser, and it appears, by writings or by the circumstances, that such covenants are intended for the benefit of all the lands, and that each purchaser is to be subject to and to have the benefit thereof, and the covenants are actually inserted in all deeds for lots sold in pursuance of the plan, one purchaser and his assigns may enforce the covenant against any other purchaser and his assigns if he has bought with knowledge of the scheme and the covenant has been part of the subject-matter of his purchase.”

The learned vice-chancellor also says (at p. 340) “ that the equitable right of action seems to be dependent as much on the fact of the general scheme as on the covenant.”

This case was approved by Chancellor McGill, in Hayes v. Waverly and Passaic Railroad Co., 6 Dick. Ch. Rep. 345, 348 (1893), and the complainant’s case is, by the allegations in his bill relating to the object of the restriction, brought within the application of the general rule recognized in these cases. But if the right of the complainant be in its nature a purely equitable right, it is, of course, subject to the application of the general equitable rule that the remedy applied for in the particular case cannot be granted unless it appears to be equitable to grant it. The remedy now sought is the extraordinary one of a mandatory injunction for the removal of a portion of a building, and the vital question in the case, as I look at it, is whether on the bill, as it now stands, the complainant can equitably require this removal.

A court of equity does not invariably enforce such covenants, and there are several classes of cases in which the remedy by injunction is refused. Two of these classes may be specially mentioned, as claimed to be applicable here — -first, where the person imposing the restriction has allowed or acquiesced in material violations of the covenant or restriction, thus waiving the covenant 'pro tanto ; and second, where the party injured has not made prompt application for the relief, and has permitted money to be expended. In these cases the party otherwise entitled to the benefit of the covenant cannot apply for an injunction, and whether there has been such waiver or laches depends upon the circumstances of the particular case. These rules are illustrated in the following, leading English cases: Roper v. Williams, 1 Turn. & R. 18; Peek v. Matthews, L. R. 3 Eq. Cas. 515 (1867), and German v. Chapman, L. R. 7 Ch. Div. 271 (1877).

In Roper v. Williams an injunction to restrain the breach of a covenant that buildings should be erected upon a general plan, was refused by Lord Eldon, upon the ground that the covenantee had acquiesced in a partial deviation from the plan, and had not made immediate application to the court for an injunction. On the first point the lord-chancellor (at p. 22) says:

“ It is not a question of mere acquiescence, but in every instance in which the grantor suffers grantees to deviate from a general plan intended for the benefit of all, he deprives others of the right which he had given them to have the general plan enforced for the benefit of all. In such cases, I have always understood, this court will leave the parties to their remedy at law. There is another view in which the case may be considered. Every relaxation which the plaintiff has permitted in allowing houses to be built in violation of the covenant, amounts, pro tanto, to a dispensation of the obligation intended to be contracted by it. Very little, in cases of this nature, is sufficient to show acquiescence, and courts of equity will not interfere unless the most active diligence has been exerted throughout the whole proceeding.
“ In every case of this sort the party injured is bound to make immediate application to the court in the first instance, and cannot permit money to be expended by a person, even though he has notice of a covenant, and then apply for an injunction. Taking all the circumstances together, the permission to build contrary to the covenant, and the laying by four or five months before filing the bill, this is not a case in which a court of equity has the right to interfere by injunction, but the plaintiff must be left to his remedy at law.”

In Peek v. Matthews, the same rule as to acquiescence in violations of the general plan and as to delay was applied to a vendor and in favor of a vendee, who had received his deed, after the violations by other grantees had been allowed, and even in the face of the express covenant with the vendor, made in his deed. The vendor was left to his remedy at law on the cove-want, and was denied the relief which a court of equity grants, as based on the continuance of a common benefit.

In German v. Chapman, supra, it was held that the violation must be material and such as to prevent the general plan from being carried out, and that the materiality of the violation was to be determined by the circumstances of each case.

See, also, 2 Pom. Eq. Jur. 817 and cases cited, as to the effect of delay and estoppel by acquiescence, in cases where injunctions, either preliminary or final, are applied for to enforce rights which are purely equitable.

The facts in the present case material to this question of waiver or laches are these: It appears by the bill that John Lucas erected his hotel and encroached on the building line, while the company and Ward, the grantors of complainant, were the owners of the remaining land in block 21, which was intended to be benefited, and, so far as appears by the bill, no objection was made by either of these then owners, nor is any explanation given in the bill of their failure to object. Those who are the owners of the remaining lands benefited by the restriction must be the persons who, at the time of the violation of the restriction, are entitled to call upon the court of equity to enforce the covenant, and must have, as such owners, the right to waive, acquiesce in or object to the violation ; and they must, on the other hand, be subject to the liabilities or penalties resulting to owners or parties injured who acquiesce in a violation. One of these penalties has been declared to be that, after such acquiescence in a material violation by one or more of the grantees, the court of equity will not enforce the restriction even against a subsequent purchaser who has entered into a direct covenant therefor with the grantor. This was the decision in Peek v. Matthews, supra, where a vendor inserted covenants in the deed of each purchaser of lots for building only in a specified manner, and permitted, without interference, material breaches of the covenant to be committed by some of the purchasers. It was held that the vendor was not entitled to an injunction against violation of the covenant by a purchaser who had taken his deed for his lot after the breaches had been committed on the others. In this case, also, the covenant in the deed was not only with the grantor, but was expressly declared to be a covenant between all the purchasers inter sese; but the court declared that, so far as the right to invoke the aid of a court of equity by injunction was concerned, this made no difference. “ The vendor in such cases, stipulating for the benefit of himself and others,” says "Vice-Chancellor Wood (at p. 518), “ as a gwasi-trustee for them, is bound to enforce the covenant as much against one as against the other. The court will not,” he further says, “grant specific performance of an arrangement which can only be carried out in part. The thing must be enforced in toto or not at all.” In German v. Chapman, supra, the correctness of the principle stated in Peek v. Matthews was recognized, but it was held that the alleged violation must be, in fact, an interference with the general scheme, and that the rule would not be applied to the facts in that case.

The materiality of the violation by Lucas is not only admitted, but its materiality constitutes the basis of the bill; and as to the hotel building proper, the erection has been allowed to stand without objection by the complainant’s grantors, who were owners, and persons entitled to object, for eight years from 1878 to 1886, and by the complainant himself from February, 1886, to June, 1889. And when complainant purchased his first lots, in February, 1886, the tower was completed, either before his purchase or shortly after, and no objection appears to have been made by him to the erection. The allegation in the bill, “ that it was while he was building his said cottages [in 1887], the complainant discovered the said hotel building encroached on the said twenty-five feet,” must be considered as applying to the hotel building and not to the “ octagon tower.” As to the tower, the projection is so evident and notorious that it is doubtful whether the above allegation, if intended to apply to this, could be considered as any foundation for relief, even on a demurrer.

The complainant, therefore, in this case took title to four of his lots from the company, with actual notice of the erection of the hotel building for years prior to that time, and must be held chargeable with the laches of the company up to that time, and for his own laches for three years longer. And in the absence of any allegations in the bill sufficient to overcome the effect of the delay of the company and of the complainant, in attempting to enforce the covenant and their apparent acquiescence, there can be no relief. Laches, lapse of time or acquiescence appearing upon the face of the bill itself, are grounds of demurrer and a bar to relief. 1 Dan. Ch. Pr. (6th ed.) 560 note a, and cases cited.

As to the octagon tower, the bill does not show clearly whether this was erected before or after complainant’s first purchase of the four lots from the company, on February 1st, 1886.

The allegation is that, “ in the winter, of 1885 and 1886,” Lucas made this addition. If the company owned the lots, they had the right to object to the erection and apply at once to the court for an injunction restraining it. If the complainant then owned it, he had the same right; and, in the absence of any allegations in the bill, sufficiently explaining this apparent acquiescence in the erection for over three years and his laches in filing his bill, relief must also be denied as to the removal of this portion of the building.

The complainant’s counsel, in answer to the effect of laches and acquiescence on the right to enforce complainant’s rights by mandatory injunction, insists that the rights of the complainant over the Lucas lot are not merely equitable rights, but that the lots of complainant are to be treated as. dominant tenements having strictly legal easements of prospect over the Lucas lot as servient tenements, and that the rights of complainant, therefore, are not destroyed by mere acquiescence or by any delay short of the time necessary to acquire an estate by prescription.

If this be the true nature of complainant’s rights, then they may not be barred by mere delay or acquiescence short of twenty years, but even admitting this, the granting of the equitable remedy now applied for does not follow, for the equitable remedy of injunction or removal may be denied by reason of delay or acquiescence, even though the legal right to proceed for breach of the covenant is admitted.

This was the situation in Roper v. Williams and Peek v. Mat thews, supra. Where the legal right was admitted, relief was denied in equity and the complainant left to his remedy at law. And where the legal right of the complainant in such cases is doubtful, an additional objection to granting the extraordinary equitable relief arises, and the right must be first settled at law.

The easement here is claimed to arise in favor of the complainant’s lots and as appurtenant thereto, either by virtue alone of the covenant in the Lucas deed from the complainant’s grantor or by this covenant, supplemented by proof, showing the general building plan adopted for all the lots in block 21 on Atlantic avenue. This covenant in the Lucas deed does not refer to the complainant’s lots or any other lands than those conveyed, and, read by itself alone, it is, to say the least, very doubtful whether it has any such scope or effect as complainant claims. And it is also doubtful whether, for the purpose of establishing a legal easement in favor of the complainant’s lots over the Lucas lots, by reason of the existence of a general plan, parol evidence, or any evidence dehors the deed, is admissible. The cases which have enforced obligations restricting buildings, as between different purchasers of a tract embraced in a general scheme, proceed, as Chief-Justice Beasley points out, in Brewer v. Marshall, 4 C. E. Gr. 537, 543 (Errors and Appeals, 1868), “upon the principle of preventing a party having knowledge of the just rights of another from defeating such rights, and not upon the idea that the engagements enforced create easements, or are of a nature to run with the land.”

In this state of doubt as to complainant’s legal title, certainly no injunction could be granted without the previous establishment of this legal right in a court of law, if his case is one of strictly legal right. If the complainant has an easement or other legal rights derived from the covenant, he still has his remedy at law, and whether they are purely equitable or legal, enforcement of them by injunction, on the present bill, is barred by delay and acquiescence apparent on the bill and not sufficiently explained or accounted for. The demurrer will, therefore, be sustained on these grounds.


author: The Ordinary.

text:
    Alexander T. McGill, Ordinary. Walter L. Hetfield v. Emile Debaud et al.
    1. Where it becomes evident to an executor, who holds moneys for the payment of legacies, that considerable delay will ensue before the legacies will be paid, it will be his duty to submit the question whether the moneys held by him shall be invested, to the orphans court, otherwise he will be accountable for interest thereon. And where he mingles such moneys with his own funds or employs them in his business, he will he chargeable with interest upon them.
    . 2. Where an executor fails to keep accounts, and, consequently, there exist obscurity and doubt as to the propriety of a credit claimed by him, the obscurity and doubt will be resolved against his claim.

      On appeal from a decree of the Union county orphans court, upon an accounting of Walter L. Hetfield, as executor of the will of Antoine Debaud, deceased.

      Mr. James J. Bergen, for the appellant.

      Mr. Robert E. Chetwood and Mr. George Putnam Smith, for the respondents.
   The Ordinary.

Antoine Debaud died on the 14th of October, 1888, leaving a will of which the appellant, the accountant below, became the sole executor, upon its admission to probate in July, 1889, after litigation in which its validity was contested. During the litigation the accountant was the administrator pendente lite oí the testator’s estate, and, as such, became fully cognizant of the character and extent of that estate.

The will required the payment of the testator’s debts and funeral expenses, and the erection of a suitable marble headstone at his grave; that his personal estate, except household furniture in the homestead, should be converted into money; that the executor should take charge of and rent all the real estate and keep the buildings thereon insured and repaired; that within two years he should sell the real estate, except the homestead, which he was empowered to sell after the death of Marie Magdalen Klenck, the mother of the testator’s widow; that from the moneys realized there should be paid a legacy of $10,000 to the testator’s widow in lieu of dower; that the widow should have the homestead and its furniture during the life of Mrs. Klenck, to make a home for Mrs. Klenck during her natural life, upon condition, however, that neither Mrs. Klenck nor her husband should make any claim against the testator’s estate; that Mrs. Klenck should also have the use of $2,000 during her life, upon the same condition, the executor to invest the money and pay the interest thereof to her; that the following legacies should be paid : To John Thys, $1,000; to the testator’s niece, Emily M. Fernandez, $2,000; to Emma A. Fernandez, daughter of the last legatee, $1,000; to Ellen M. Saybold, a niece of the testator’s, $2,000; to Ellen Lena Saybold, daughter of the last legatee, $1,000; to the children of the testator’s deceased brother, Pierre Debaud, $2,000; to the children of the testator’s deceased brother, Jeannot Debaud, $2,000; to the children of the testator’s deceased brother, John Debaud, $2,000; to the testator’s sister, Marianne Ribert, $2,000, and, if she be dead, to her children ; that the last four legacies should be paid within one year after the testator’s death; that the residuary estate should be distributed in four parts — one part to the children of Pierre Debaud, one part to the children of Jeannot Debaud, one part to the children of John Debaud, and the remaining share to Marianne Ribert, or, if she be dead, to her children.

The testator’s sister and her children, and the children of the testator’s deceased brothers all resided in France and yet reside there. The other legatees reside in this state.

Although the estate falling to his care consisted of various properties made up of improved. and unimproved real estate, bonds and mortgages, and bank stock, which yielded rents, dividends and interest, the appellant not only failed to keep accounts as executor, but mixed the funds received, with his own funds, relying upon memory, such memoranda as he made from time to time in his check-books and pocket-diaries, and the vouchers he took for payments made, for the information necessary to an accounting.

When his account, after a lapse of some four years, was filed, its items were largely without date and the whole instrument was confused by errors.

A large number of exceptions were filed to the account, many of which were sustained by the orphans court, either upon the accountant’s admissions of his error or upon the court’s determination upon evidence produced.

The accountant appeals from the decree of the orphans court, specifying, under the second rule of this court, a number of particular objections to it.

The proof shows that the executor received in cash about $27,740, out of which he disbursed some $20,075, paying all the American legatees in full and making other payments, some of which were disallowed by the orphans court. All those receipts were had and disbursements were made prior to January 1st, 1891. The balance chargeable to the executor was about $7,665, from which he took $2,000 for investment for Mrs. Klenck, leaving in his hands, mingled with his own moneys, some $5,665 which he did not apply to the payment of the French legacies before he was required to account. ■ During the accounting, under compulsion of the orphans court, he paid, on account of the French legacies, $3,000.

The orphans court charged the executor with interest on $4,700 of the unapplied balance in his hands, between the dates January 1st, 1891, and May 1st, 1894.

Of this charge he complains. On the other hand, the respondents insist that the charge should have been interest on $5,600 for the period mentioned.

I do not understand how the orphans court reckoned the sum of $4,700, unless it deducted the highest lawful commissions to the executor and the counsel fee which it allowed to his counsel upon the accounting, from the balance appearing to be in his hands, as though those allowances were vested rights of the executor prior to his accounting, in disregard of the well-settled rule that they become rights only in virtue of their allowance by the court.

It is not, however, necessary for me to ascertain how that, amount was reached'. It is enough now, that I am satisfied that the executor had at least $5,600 of the funds of the estate in his use for the time specified, and that the contention of the respondents that he should pay interest for that period on $5,600 instead of upon $4,700, if he should pay interest at all, is abundantly supported.

The inquiry then arises whether he should pay interest at all.

He kept two personal bank accounts in which he mingled his own and the estate funds. He has not produced any memoranda, such as are usually made in check-books, to distinguish the sources ofihis deposits or which determine the balances to his credit, and how much of those balances at different times belonged to the estate of which he was executor. I am unable, from his vague and uncertain data and testimony, to reach a satisfactory conclusion as to the manner in which he kept the moneys of the estate. That the moneys were not all in bank is made clear by his tardy obedience to the order of the orphans court, which required him to pay $3,000 to the French legatees, which occasioned the making of an order upon him to show cause why lie should not be held in contempt of court, under the spur of which he deposited in bank two sums — $984.50 on June 1st, and $500 .on June 2d — to increase his bank balance to $3,066.36 from which he paid the $3,000. According to his testimony these sums were not taken from one bank to augment the deposit in the other, but were taken in cash from his safe. Why they were taken in two sums instead of in one, and on different days, is unexplained. He denies that he used moneys of the estate for his own purposes, beyond the amount he expected to receive for commissions, but he fails to point out with any particularity how much he did use. He utterly fails to show any more money in his possession on the 2d of June, 1894, than the bank balance of $3,066.36 made up on that day and the day before by the addition of the two sums aggregating $1,484.50. His position is that he kept the money always in readiness to meet the demand for payment by the. French legatees, and by reference to the fact that minors among those legatees had sought to obtain payment upon guardianship papers rejected by him upon the advice of his counsel, he reasons that his apprehension of a demand upon him at any time was well founded. He contends that, while waiting demand, he could not have done otherwise with the moneys than he did.

The testimony of the executor is attended throughout by obscurity and indefiniteness, and that, with the circumstance of his tardy obedience to the order of the orphans court, is so much at variance with his claims that it is difficult to accord to his testimony implicit credence. It is, however, clear that if he did not make use of the funds of the estate, he, at least, suffered them to remain idle when it was plainly to the interest of his cestuis que trustent to have them invested. Those cestuis que trustent were foreigners, evidently unacquainted with the forms and requirements of our laws. They were numerous. One, at least, was an infant. It was difficult, because of their language and the distance at which they lived, for them to intelligently and effectively communicate with the executor. These obstacles, .and the executor’s evident intention not to himself seek out and pay the foreign legatees, plainly pointed to delay and admonished him that there existed at least a question whether the funds should not be invested until payment of the legacies should be safely accomplished.

The statute (Rev. p. 777 § 115 &c.) afforded him adequate protection in making investment, under the direction of the orphans court. More than that, it imposed the duty upon him to apply to the orphans court for direction in that behalf, under penalty of his being charged with interest in case of his neglect to do so.

But added to his duty under the statute, I think he was within the rule of equity which charges an administrator, executor or trustee who negligently suffers trust moneys in his hands to lie idle, or mingles them with his own funds, or employs them in his business, with interest upon them. King v. Berry’s Executors, 2 Gr. Ch. 261; Frey v. Administrators of Frey, 2 C. E. Gr. 71; Frost v. Denman, 14 Stew. Eq. 47.

I, therefore, am of opinion that the executor should be charged interest as claimed by the respondents.

In the next place, the orphans court held that there should have been an abatement of some $900 from the American legacies, to afford a fund for the payment of the French legatees in equal proportion with the American legatees, and therefore it charges the executor with about that sum as an overpayment by'him.

I think that the orphans court was mistaken in this conclusion. By giving legacies and disposing of the residuary estate, real and personal, in a blended mass, the testator charged his entire estate, real and personal, With the payment of all legacies, and hence all the realty which remains undisposed of is liable to their payment, including the remainder of the homestead after the life estate of the widow. Turner v. Gibbs, 3 Dick. Ch. Rep. 526. The proofs do not make it appear that there is not sufficient value in the realty remaining unsold to fully satisfy the French legatees. It is remembered that those legatees take the residuary estate, and it follows that they are not injured by the prompt payment of the American legacies and the consequent stoppage of interest upon them, the continuance of which would tend to exhaust the residuary estate. It is within the power of the French legatees to enforce payment of their legacies now by resort to the realty.

The appellant next objects to the disallowance of several items of expenditures for taxes and repairs, touching the homestead property during its possession by the life tenant. I think that the orphans court properly disallowed those items. The rule is that a life tenant must pay the current yearly taxes and keep the property in repair. The proofs do not show that the taxes or repairs were of special character which should charge them or any part of them to the remainder. It is true that, in the second paragraph of his will, the testator provides that his executors shall take charge of “all” his real estate and.keep it in repair and insured, but this direction is coupled with one which requires them to lease the real estate and collect the rents arising therefrom, and I cannot escape the conclusion that the testator intended to apply his direction for repairs and insurance to that property only which, for the time being, should be in the immediate charge of the executors subject to their lease, and not to exempt the tenure of the homestead by his widow from the ordinary obligations which are incident to her life estate.

In the next place, the executor complains of a charge of $50 on account of the sale of a parcel of property to one O’Keefe. He thinks that O’Keefe paid him $100 in cash at the time of the sale, and he remembers that subsequently Mr. W. R. Coddington, acting as the attorney of a building and loan association from which O’Keefe borrowed $1,000, and as well for O’Keefe, gave him a check for $850, and his check-book and a return check telling that he gave Mr. Coddington his check for $25. He argues that, as the addition of $850 and $100 is $950, and the deduction of $25 from that sum will' leave it $925, the money he must have received was $925, notwithstanding the fact that, by his deed to O’Keefe, he acknowledges the receipt of $975 as the purchase price of the land sold. It is shown that the bonus given by O’Keefe for the $1,000 loan from the building and loan association was $150, and that the association secured payment of that bonus by giving O’Keefe only $850, by the check which went to the executor. The executor then had to look to O’Keefe for the $125 necessary to make the consideration mentioned in the deed, and his check to Mr. Coddington would seem to imply that the $150 bonus was paid to him instead of $100 as he now thinks, and that he gave Mr. Coddington, as the attorney for O’Keefe, $25 when the $850 check was delivered to him, and thus made his receipt for the property $975, the amount mentioned in the deed. Mr. Coddington has but a vague recollection of the transaction, and his testimony fails to make clear the situation. It appears that O’Keefe bought under written conditions of sale which were, and probably now are, in the possession of the executor, but that document is not produced. As the proofs stand, I would not be warranted in disturbing the determination of the orphans court. I think that the recital of the receipt of the $975 in the deed given to O’Keefe makes evidence against the executor which he must overcome by clear and convincing proof. It is obvious that if the executor had kept accounts this question would never have arisen. He must bear the penalty of the obscurity and doubt which now exist; Blauvelt v. Ackerman, 8 C. E. Gr. 502.

It is a matter of surprise, in view of the fact that the executor kept no accounts and mingled the funds of the estate with his own, and that much of the present litigation, which has mulcted the estate in loss and expense, is due to his conduct _in this respect, that in appareht disregard of the rule to the contrary, he has been allowed commissions at the highest statutory rate. Dufford v. Smith, 1 Dick. Ch. Rep. 216. I will not, however, deal with the question of commissions, for no objection to their allowance has been made. Rule 2.

The decree of the orphans court will be reversed, that a new decree may be made in conformity with the views expressed in this opinion.