author: Stevens, V. C.

text:
    Deutsche Presbyterische Kirche v. Trustees of Presbytery of Elizabeth et. al.
    [Decided August 22d, 1918.]
    1. Where one trustee transfers to another, without getting an equivalent, property that he holds in trust, the transferee will ordinarily take, charged with the same trust.
    2. Where it is apparent from the different resolutions passed by the corporate bodies, who were parties to the transaction inquired about, that the transaction was not an out and out gift, and that the mutual purpose of the parties was to take further action defining the trust, a proposed sale of the property transferred to an outsider will be enjoined at the instance of the ceskú que trust.

    3. Managers of a corporation cannot give away its property.
    On bill, &e.

      Mr. Charles J. Slamler, for the complainant.

      Mr. Nicholas C. J. English, for the trustees.

      Mr. Orlando II. Dey, for the Greek church.
   Stevens, V. C.

This is a controversy over the equitable ownership of a church property in Rahway. Prior to May 15th, 1909, the title was vested in complainant. On that day, by warranty deed, it, by certain of its trustees, conveyed, or attempted to convejq it to the trustees of the Presbytery of Elizabeth. The church now claims that it still has an equitable interest. The trustees of the Presbytery contend that they are the absolute owners. As such they have agreed to sell to St. J ohn’s Greek Catholic Church of Rahwajq one of the defendants. The bill is filed, primarily, to enjoin them from so doing.

The church tras organized as a Presbyterian congregation on April 10th, 1884, under the Beligious Corporations act. A year thereafter it acquired the property in controversy from the Balrway Savings Institution for the consideration of $2,400. It gave back a mortgage to secure $1,000 of the purchase-money. The membership was small from the beginning, and as time went on it diminished. Between 1885 and 1909 it had paid only $200 on its mortgage indebtedness. On January 19th, 1909, as appears from the minutes of the Elizabeth Presbytery, the following resolution was passed by that body:

“Resolved, That the matter be referred to the standing committee of the board of church erection and the trustees of Presbytery, and to give the trustees of Presbytery power to negotiate a loan of $800' during the interval of Presbytery, if such a course should be found necessary.”

These boards, after consideration, reported to the Presbytery, which thereupon adopted the following resolutions:

“1. That Presbytery hereby approves the action of its committee * * * in proposing to the German Presbyterian church of Railway to transfer its property by deed to the trustees of Presbytery, in return for the assumption by the trustees of Presbytery of the mortgage of $800 now lying against the property.
“2. That Presbytery hereby authorizes the trustees of Presbytery to accept title to the German Presbyterian church, provided it be offered, upon the terms qbove named, to enter into such agreement with the said congregation as will secure the German Presbyterian church of Rahway the free use of the property as long as it exists in connection with the Presbytery, and to do all that may be necessary to complete the transaction both as respects the transference of the title and the replacing of the mortgage.”

Bv this resolution certain members of the Presbytery (including the Bev. Dr. Kerr) were appointed to represent Presbytery at the congregational meeting of the German Presbyterian church, to be held on the next Monday evening.

This meeting took place and Mr. Helms, one of the members of the congregation, offered the following resolution:

“AVhekeas, The church is encumbered with a mortgage for $800, which has existed for twenty-four years and the congregation seems unable to pay the same, and payment thereof has been demanded;
“And Whereas, The congregation has with difficulty sustained regular religious services and seems unable to do more under existing conditions ;
“And Whereas, The Presbytery of Elizabeth, its members and subordinate committees, to a large extent proyided the funds for the acquisition of the church property, and it is desired that the property continue to be devoted to religious uses under direction of the Presbytery and be not lost by foreclosure or otherwise; and the trustees of the Presbytery of Elizabeth have offered to assume said mortgage.
“Resolved, That the trustees of this church be directed to convey the church property consisting of a lot fifty feet wide fronting on Irving street, Kahway, and the church edifice thereon to the trustees of the Presbytery of Elizabeth, their successors and assigns;
“Resolved further, That the Presbytery of Elizabeth be respectfully requested to still allow us to occupy and use the church for religious services so long as we may be able to sustain stated religious worship therein and to keep the property in proper order and repair;
“Resolved further, That the Presbytery of Elizabeth be requested to enter into agreement with the church to return the title to the property whenever the church pays the amount of the mortgage above referred to and that the church has the privilege of paying the amounts in installments of $100 or more.”

The minutes show that a-vote was taken by ballot. Ten votes were cast — all in favor of the preambles and resolutions — being (so the minutes state) “more than two-thirds of all the votes cast.” The minutes do not show whether other members of the congregation were present.

On May 15th, 1909, the German church made a deed to the trustees of the Presbytery of Elizabeth, in consideration, so the deed states, of “one dollar and other valuable consideration.” The deed contains, ’ unreservedly, covenants of seizin, warranty and against encumbrances. It does not declare that the property is conveyed subject to the mortgage. Although the resolution of Presbytery provided that the trustees of the Presbytery should assume payment, it, the grantor, by its covenant against encumbrances, undertook to do so.

Tire Presbytery furthermore. directed its committee to enter into an agreement to secure the free use of the property as long as it (the church) existed in connection with the Presbytery. They made no such agreement and nothing was done about the resolution of the congregation that provided that the Presbytery should be requested to enter into an agreement to return the title whenever the church paid the mortgage.

On May 27th, 1909, the trustees of the Presbytery paid off the mortgage to the savings institution with the proceeds of a $900 mortgage made by them to the Union County Savings Bank of Elizabeth. They'paid the interest on this mortgage until 1916, when they received an offer to purchase from a Hebrew church. The German church had held its customary services from the time of the transfer to'the time when this offer was made. Hearing of it, it'objected to the proposed sale, and Mr. Schneider, one of its members, agreed thereafter to pay the interest on the mortgage and to discharge a municipal assessment, which he did. In consequence of the attitude of the congregation, and, as it is said, the inadequate price, the offer was declined. '

In April of the present year an offer of $5,348 was received from the defendant the Greek church, and this offer was accepted by the trustees of Presbytery, and $200 paid on account of the price. This suit was brought before the delivery of a deed or the pajunent of the balance of the purchase-money.

It was proved that between the years 1885 and 1909 the German church received about $8,400, not from the trustees of the Presbytery, but from the synod, a body having a more extensive jurisdiction. It was made up almost entirely of an annual - contribution of $300 to the pastor’s salary and was a pure donation. Its payment is without effect upon the present controversy.

Counsel for defendants lay stress upon a line of cases in which it is held that a trust in land will not result to the grantor, if the conveyance purport to be given for a valuable consideration, upon parol proof that nothing was in fact paid and that the conveyance, was wholly voluntary. Aller v. Crouter, 64 N. J. Eq. 381; Holton v. Holton, 72 N. J. Eq. 312; Coffey v. Sullivan, 63 N. J. Eq. 296. These eases have no application here. The controversy is not one between individuals, each claiming in his own right, but between two corporate trustees; each vested with authority to hold in trust for specific objects. Ordinarily, if a trastee transfer to another, without getting an equivalent, property that he holds in trust, that other will hold on the same trust. In the case in hand, I should say that, prima facie, if the grantor-trustee have made a conveyance, without valuable consideration and without specifying any other trust that it was competent for the two bodies to create, the grantee-trustee would take, charged with the same trust. It would lie upon the grantee-trustee to show that in some way or other a different trust was created, and this would not be shown by proof merely that the trusts which it was capable of executing covered a wider range of objects. It will not be disputed that the trustees of Presbytery could have agreed to hold the properly on the trust upon which the trustees of the church had held. Such agreement would have been within the scope of its power; and so the case conies down to this, What is there to show that it took on a different trust — assuming, of course, that the church trustees had power to authorize such, a trust or to make a gift of the property? On this question we are not left without light, for we have the corporate action of the congregation, on the one hand, and of the Presbytery on the other. The Presbytery, as we have seen, took action first. The question before them was whether it was expedient to protect the church from a threatened foreclosure. They resolved that it would be well to propose to the church that it transfer its property “in return for the assumption by the trustees of Presbytery of the mortgage.” In this, we have the suggestion of a valuable consideration; but, as lias been shown, such consideration was not in fact given. The warranty deed actually taken continued the burden on the church. If the trustees of Presbytery paid off the old mortgage with the proceeds of the new, given by themselves, they could recover what they paid by suing on the covenant against encumbrances. The Presbytery also resolved that the trustees be authorized to accept title to the. German Presbyterian church of Rahway; provided it be offered, upon the terms above named, to enter into such agreement with the said congregation as would secure the German Presbyterian church of Rahway the free use of the property, as long as it existed in connection tvith the Presbytery.

The body charged with the carrying out of these resolutions was composed of gentlemen of the highest character and not the slightest reflection upon their conduct, viewed from an ethical standpoint, is here intended. But it is evident that their action did not accord with their instructions. They did not, probably through oversight, assume the mortgage, and they did not, as called for by the second resolution, enter into an agreement to secure to the church the free use of the property as long as it existed in connection with the Presbytery. It is needless to say that had they made such an agreement, they would not have attempted, as they are now doing, to sell.

Let us next look at- the action of the Bahway congregation. They were doubtless advised of the action of the Presbytery. The Bev. Dr. Kerr, who was one of its members and one of the members of its trustees, was present at the meeting, and, as he himself states, was the one who, on behalf of the church, drew the resolution requesting the Presbytery to enter into an agreement to return the title to the property “whenever the church pays the amount of the mortgage.” If this resolution had been afterwards approved by the Presbytery, the complainant would be, without more, entitled to a return of its property; for it has tendered payment. What I desire here to emphasize is that what the congregation contemplated was not an unqualified gift but a trust terminable on payment of the mortgage.

"Whether, therefore, we consider th.e action of the Presbytery or the action of the church we reach the same conclusion, viz., that an out and out gift was not intended. What was contemplated was the transfer on a somewhat different trust of a property worth then and now upwards of $5,000, to a body which was, from a financial standpoint, better able to take care of it.

The subsequent conduct of the parties accords with their resolutions. The trustees of the Presbytery allowed the congregation to use and control the property as before. When, in 1916, the Hebrew society made its offer to purchase, and the congregation objected, the trustees permitted Mr. Schneider to pay an assessment and to take upon himself -the payment of the interest on the mortgage.

It is a well-known rule that the managers of a corporation cannot give away its property. Here it is argued that the congregation — the cestui que trust — authorized the gift. If we assume that the authorization, notwithstanding their resolutions, was absolute, still it does not appear that all the members of the con-' gregation — the entire body of cestuis que trust — assented. What is proved is that ten members voted. It is- not proved that these were all the members.

It seems plain that an injunction should issue restraining the sale to St. John’s church.

It is not quite as apparent what other relief should be given. The minds of the parties, so to speak, did not meet to the extent of concluding a definite arrangement. The proposition, on the one hand, was that the church should have the free use of the property as long as it existed in connection with the Presbytery. The proposition, on the other hand, was that the title should be reconveyed when the church paid the mortgage. The language of the clause adopted by the congregation and drawn, as I have said, by Pev. Dr. Kerr, is highly significant. It proves that further action defining the trust was contemplated and that the transfer of the legal title was a step> merely toward the ultimate settlement. As the trust agreement has been left undefined, it seems to me that the equity of the church now is to have a reconveyance, on payment of all the money given or advanced by the Presbytery or its trustees since the mortgage was made, iucludv ing, of course, the money for which the trustees have obligated themselves on their bond.


source: Caselaw Access Project

license: Public Domain

text:
    Luman W. Lawrence et al. v. Judson O. Prosser, executor, et al.
    [Decided September 16th, 1918.]
    1. A testator may lawfully bequeath to a town money to be used for the erection of a memorial monument in that town. Detwiller v. Hartman, 37 N. J. Eq. 347, approved and followed.
    2. A municipal corporation has, by the common law. without the aid of a' statute, power to take such a bequest. Guild v. Newark, 87 N. J. Eq. 38, followed.

      3. The statutes of Maine, where the municipality is situated, sanction the acceptance of the bequest.
    On bill, &e.
    The will of Mrs. Emma H. Dean, after giving certain legacies, including a life interest, and directing the conversion of her property into cash for investment, provided as follows:
    “After the death of said Luman Warren Lawrence I order and direct the said Judson C. Prosser to turn over to the town of Bucksport, Blaine, the balance of said sum, including all interest, accumulations and additions thereto, less the amount paid during the lifetime of the said Luman Warren Lawrence and less the disbursements of the said Judson O. Prosser and his commissions for carrying out his duties as trustee and executor as hereinafter mentioned; the said sum to be received by the town of Bucksport, Maine, aforesaid, to be used by it for the express purpose of erecting a monument to the memory of my brother Luman Warren, the site of said monument and the details thereof to be left to the judgment and discretion of the proper town authorities.”

      Mr. Scott German, Mr. Frank E. Bradner and Mr. Robert H. McCarter, for the complainants.
    Mr. Gottlieb and Mr. Hugh B. Reed, for the executor.

      Mr. Edward Q. Keasbey, for the town of Bucksport.
   Stevens, V. C.

This seems to be a very simple case. The only question is whether Mrs. Dean could lawfully give her residuary estate to the town of Bucksport, for the erection of a monument to the memory of her brother, a prominent citizen of that town.

First. Could she lawfully give it for that purpose? That she could is decided in Detwiller v. Hartman, 37 N. J. Eq. 347. The decisions are all one way, and the very eases relied upon by complainants’ counsel (In re Ogden, 55 Atl. Rep. 933; In re Fancher, 103 Pac. Rep. 206) assume that the right exists.

Second. Has the town of Bucksport capacity to receive the gift and apply it as directed? In the recent case of Guild v. Newark, 87 N. J. Eq. 38, I had occasion to consider the right of the city of Newark to accept a gift of land for a park. I came to the conclusion that a municipal corporation had, by the common law, without the aid of statute, power to take such a devise. “Not only, it was said, may municipal corporations take and hold the property in their own right by direct gift, conveyance or devise, but the cases firmly establish the principle that such corporations, at least in this country, are capable, unless specially restrained, of taking property, real or personal, in trust for purposes germane to the objects of the corporation.”

When one considers that civilized communities have in all ages adorned their ways and parks with, memorials of the illustrious dead, it is idle to assert that columns and statuary have no proper place in them. Whether, without legislative authority, a municipality may or may not spend, upon objects of this character, money raised by taxation, it is certain that it may take them by gift or bequest. Libby v. City of Portland, 105 Me. 374.

The town of Bucksport has not only this common law right; it has legislative sanction besides. The Maine statute provides that

“any city or town may receive money by donation or legacy in trust for benevolent, religious or educational purposes; for the erection of monuments and for the benefit of public cemeteries and lots therein: provided that the city or town lawfully consents.”

By the laws of this state, therefore, the testatrix has the right to make, and by the laws of tire State of Maine, Bucksport has the right to receive a gift of this character.

I will notice briefly some of the objections made to its validity. It is said that the choice of the site and the details of the work are left to the discretion of the town, and that this invalidates it, on the principle applied in Smith v. Smith, 54 N. J. Eq. 1. It is obvious that the discretion here given is not wider than that which, in a gift of this kind, is generally and necessarily given. If testator directs a house to be built for his widow or child, or a portrait to be painted, is the direction invalidated because lie leaves the details of the work to the discretion of the person to whom it is committed?

Again, it is said that the bequest is void, because it violates the rule against perpetuities. The will directs the money to be applied not for maintenance, but for construction, and construction only. To the ease of such a bequest the law of perpetuities can have no application unless the construction be postponed to a period exceeding a life or lives in being and -twenty-one years. There is a palpable fallacy underlying much of complainants’ argument on this head. It is that because a monument is likely to last beyond the legal period, the case is one of perpetuity. The same might be said of any structure likely to endure. The case of Morristown Trust Co. v. Morristown, 82 N. J. Eq. 521, is appealed to. Testator made a bequest of money for the bronze and granite base of a flag-staff in a public park. Vice-Chancellor Howell held that it was void. The case was correctly decided, for the base was to be built with the consent of the trustees of the park and this consent was refused. That was the main ground of decision. The statement, no doubt inadvertently made, that the gift infringed upon the rule against perpetuities, was obviously erroneous, if the structure was to be completed and handed over within the legal time.

A considerable part of the argument was devoted to the question of the meaning of the word “monument.” Does it mean a shaft or a statue, or does it mean a building, like a library or town hall, that would come within the definition of a charity? In the view I have taken the question is not now material. Whether testatrix intended a charity or not, her gift was to have its full effect within the legal period, and so, in either aspect, is valid.


author: Leaming, V. C.

text:
    The Pennsylvania Company for Insurance on Lives and Granting Annuities, trustee under the will of Fietta Alsfelt, deceased, v. Mary Riley et al.
    [Submitted June 24th, 1918.
    Determined July 5th, 1918.]
    1. A bequest of $1,000 out of the sale of a house of testatrix given in trust for the education of the legatee is a demonstrative legacy.
    2. A direction that money coming to the estate from a purchase-money mortgage be held in trust, and the income divided among children named, is a specific legacy.
    3. A demonstrative legacy, to be paid from the proceeds of the sale of a house, does not necessarily fail if the house is disposed of by the testatrix in her lifetime. It assumes the status of a general legacy, and should be paid from other personal assets of the testatrix or, if properly charged, from testatrix’s real estate.
    4. Where the property to pay a demonstrative legacy had been sold, and the only other property of the testatrix had been specifically disposed of by the will, such demonstrative legacy must fail.
    5. Where the will bequeaths the income of a trust fund to be divided equally among two beneficiaries and the principal to be divided “after their death” among reversionary legatees, on the death of one beneficiary, one-half of the fund is distributable.
    6. Where a gift is to several persons by name, the presumption arises that they take in their individual capacity and not collectively, even though the persons named constitute a class.
    7. Under the ianguage of the will to be construed, the bequest vests at the death of the testatrix, and the share of the reversionary legatee who died after the death of the testatrix, is payable to his estate.
    On final hearing on bill for construction of will.

      Mr. Marlin V. Bergen, for the complainant.

      Mr. Clarence L. Cole, for the defendants Mary Riley and others.

      Mr. Edwin E. Crane, for the defendant Theresa Riley, administratrix.
   Leaming, V. C.

By this suit complainants seek judicial construction of the will of Eietta Alsfelt, deceased.

The provisions of the will, construction of which is herein sought, are as follows:

“6. I direct that out of the proceeds of the sale of my house or other property, one thousand dollars.shall be set apart and held in trust by my executor, for the education of Robert Lewis Read, child of my grand-daughter, Mrs. Florence S. Read, nee Riley, and in case of his death, the said sum shall be divided equally between my grandchildren, Frank A. Riley, Mary Riley, Joseph H. Riley, Robert Riley, Fietta J. Alsfelt, Knight Alsfelt, Robert Alsfelt and Rachel Alsfelt.
“7. I direct that the twenty-six thousand dollars coming to my estate from the sale of the Norwood, shall be held in trust by my executor, and the income therefrom shall be divided equally between by children, Mrs. Mary Riley and Mr. William H. Alsfelt, during their lifetime; and after their death, the principal shall be divided equally between my grandchildren, Frank g. Riley, Robert Riley, Joseph H. Riley, Mary Riley, Fietta J. Alsfelt, Knight Alsfelt, Robert Alsfelt and Rachel Alsfelt and Robert Lewis Read, son of Florence g. Read — nee Riley, or the survivors or heirs of them.”

At the death of testatrix she had disposed of the house referred to in the sixth item of the will above quoted, and had no other property which could be sold for or applied to the purpose named except $26,000; -that money was the proceeds of a purchase-money mortgage of $26,000 on the Norwood, which mortgage represented the $26,000 referred to in the seventh item of the will above quoted; the mortgage had recently been paid and the money was intact at the time of the death of testatrix. All other property of testatrix, and also $2,000 of the proceeds of the $26,000 mortgage, has since been used by the executors to pay debts of testatrix.

The first inquiry relates to the status of the bequest in the sixth item of the will.

This bequest is a demonstrative legacy. The circumstance that testatrix at her death did not own the property out of which she directed the bequest to be paid is not alone operative to wholly defeat the bequest. A demonstrative legacy, so circumstanced, assumes the status of a general legacy and should be paid from other personal assets of a testator, and, if properly charged, from testator’s real estate. But, as already stated, no other assets of testatrix existed except the proceeds of the Norwood mortgage, and that mortgage was specifically disposed of by the seventh Rem of the will. The trust bequest of the Nor-wood mortgage is a specific legacy; this is fully disclosed by the authorities collected in Mecum v. Stoughton, 81 N. J. Eq. 319, and Kearns v. Kearns, 77 N. J. Eq. 453, and the $26,000 representing its proceeds has been identified in a manner that clearly subjects the proceeds to the operation of the bequest. As general legacies must abate before specific legacies, it necessarily follows that the demonstrative legacy of the sixth item of'the will fails. Johnson v. Conover, 54 N. J. Eq. 333; Tichenor v. Tichenor, 41 N. J. Eq. 89.

Doubts touching the seventh item of the will have arisen by reason of the following circumstances:

- At the death of testatrix all the persons named in the seventh item of the will were alive. Robert Riley, one of the reversionary legatees, died October 4th, 1912, intestate and without issue. William H. Alsfelt, one of the life beneficiaries, died August 1st, 1915. Mary Riley, the remaining life beneficiary, and all the reversionary legatees, except Robert Riley, are still alive. Instructions-are now sought as to whether any part of the corpus of the -trust fund became distributable at the death of William H. Alsfelt, and, if so,.what disposition is to be made of it.

At the death of William H. Alsfelt one-half of the corpus of the trust fund became distributable. It has been uniformly so held in this state in construing similar language in all cases in which no other part of the will manifests a contrary intent. Woolston v. Beck, 34 N. J. Eq. 74; Stoutenburgh v. Moore, 37 N. J. Eq. 63; affirmed, 38 N. J. Eq. 281; Collins v. Wardell, 65 N. J. Eq. 366; Merriam v. Dunham, 62 N. J. Eq. 567. In Kellogg v. Burnett, 74 N. J. Eq. 304, the words “after the decease of my said two children” were held to mean after the decease of both.; but that construction was there made necessary because of a reversion to a class which could not be ascertained until the death of. both life tenants. It was, however, there recognized, consistently with the cases above cited, that the direction for equal division of income between the life tenants is inconsistent with a Tight in the income in the nature of a joint tenancy. The language ‘‘during their lifetime,” as nsed in the seventh item of the will here in question, must accordingly be understood to mean, during their lifetime respectively. It follows that at the death of William H. Alsfelt one-half of the corpus of the trust fund became distributable.

But for the concluding words of the seventh item of the will, namely, “or the survivors or heirs of them,” little, if any, doubt could be entertained touching the manner of distribution at this time of one-half of the corpus of the trust fund.

The direction contained in the will is to “divide equally between” the persons specifically named. All the persons named are grandchildren of testatrix, except one, who is a great-grandchild; the enumeration of persons includes all of the grandchildren of testatrix and her only great-grandchild; the several grandchildren named are the children of the respective life tenants; the great-grandchild is a child of a deceased granddaughter of testatrix. Where a gift is. to several persons by name, a presumption arises, in the absence of a contrary intent apparent on the face of the will, that the persons named ace to take in their individual, and not in their collective capacity, even though the persons named constitute a class or classes. Dildine v. Dildine, 32 N. J. Eq. 78. It follows that the manner of distribution of the corpus of the trust fund as contemplated by the will is per capita as distinguished from per stirpes.

It also seems clear that in the absence of the concluding words of the bequest, already referred to, the reversionary rights of the several grandchildren and the great-grandchild named in the bequest necessarily would be regarded as vested interests at the death of testatrix, as pointed out in Security Trust Co. v. Lovett, 78 N. J. Eq. 445, since there is to be found in the several reversionary legatees at the death of the testatrix a present right of future enjoyment, and that right of future enjoyment limited only on an event — the death of a life tenant — which was certain io happen, and the several reversionary legatees capable of taking in possession at any time either of the life estates should be spent; it is the uncertainty of the right of enjoyment, and not the uncertainty of actual enjoyment which prevents a right from vesting and renders it contingent. And even though the concluding words of the bequest should be understood as creative of a right by survivorship in those surviving in the event of the decease of a reversionary legatee before the period for distribution, the interest of such legatee would be regarded as a vested interest subject to being divested by death before the period of distribution.

Accordingly, it remains to consider whether the words “or the survivor or heirs of them,” as used at the conclusion of the bequest, are found to be restrictive of the gift in such manner as to confer upon the survivors or upon certain heirs a right to the share of a legatee dying before the period for distribution. As hei’einabove stated, Robert Rile}', one of the reversionary legatees, died intestate and without issue after the death of testatrix and before the death of William H. Alsfelt, one of the life tenants, whose death made a distribution of one-half of the corpus necessary.

It will be conceded that the force to be attributed to the language in question here is difficult of ascertainment. Had the word “survivors” been used without the word “heirs,” the language would have clearly related to the survivors at the death of the life tenant, and Robert thus would have been excluded. Stout v. Cook, 79 N. J. Eq. 573, 576. But the words “survivors” and “heirs,” as here used, appear to be wholly irreconcilable, unless some artificial or restricted meaning shall be attributed to the words without satisfactor}' indication of the intention of testatrix in that respect. Testatrix may have intended by the word “heirs” to refer to issue or deseexxdants, and in that manner may have sought to provide that in the event of the death of a residuary legatee, without issue, before the pei’iod for distribution, his or her share should be paid to the then survivors; but that constriction of the language used by testatrix would attribute an artificial meaning to the word “heirs” and would be essentially conjectui*al and without the support of substantial evidexxce of such actual intent. A construction giving more adherence to accepted rules of construction would be to regard the disjunctive word “or” before the words “survivors” and “heirs,” respectively, as strictly substitutionary, as distinguished from the copulative word "and” — which latter word, when so used, ordinarily denotes quality or duration of the estate to be taken — and thus impute to testatrix an intent to substitute as objects of her bounty survivors or heirs for one dying before the period for distribution ; but that construction presents the incongruity of two substituted and antagonistic classes of fakers without indication of their precedence except such as might be inferred by the order in which they are named. In re Stannard, 52 L. J. Ch. 355; 48 L. T. Rep. (N. S.) 660, with somewhat similar language before the court for construction, the view was adopted that force should be given to both the word "survivors” and "heirs,” and that this could not be done by relating the gift to the period of death of the life tenant, since in such case the substitutionary word “heirs” would be in conflict with the word "survivors.” Accordingly,' the gift was held to relate to the death of the testator and thus be to those who .survived the testator and to the heirs of any who did not survive testator. '.But in the will now under consideration tire direction is for distribution to specific persons at the death of the life tenant, "or the survivors or heirs of them.” Perhaps other more or less reasonable conjectures could be indulged as to the possible intent, of testatrix in the use of this peculiar and almost meaningless language selected by her; but no suggestion has been made that appears to have the support of a forceful manifestation of a defined intent upon her part. In such circumstances the conclusion appears to be impelled that the language here under consideration cannot be properly given any defined force which shall be operative to so restrict the several reversionary gifts that they may not be regarded as vested in right at the death of the testatrix. Accordingly, the share of Robert Riley will be paid to his administrator for the benefit of Robert’s estate.


author: Beaming, V. C.

text:
    Howard Goff et al. v. Goff Electro Pneumatic Brake Company.
    [Submitted July 8th, 1918.
    Determined July 11th, 1918.]
    1. The Corporation act, section 96, does not authorize the appointment of a receiver for a foreign corporation which is solvent.
    2. This court will not, under its general powers, appoint a receiver for a solvent foreign corporation. Such relief should be administered in the state of the corporation’s domicile.
    On bill for receiver. On hearing at return of order to show cause for appointment of receiver of defendant corporation.

      Mr. Patrick H. Harding, for the complainant.

      Mr. Norman Grey, for the defendant.
   Beaming, V. C.

The bill herein is filed by complainants as stockholders and creditors of the Goff Electro Pneumatic Brake Company, a corporation of the State of Delaware, and prays for an injunction restraining that corporation and its officers and agents from exercising any of its privileges or franchises or transacting its business, and for the appointment of a receiver- of that corporation.

The bill discloses corporate assets in this jurisdiction and charges not only neglect of duty upon the part of the officers and directors of the corporation, but also wrongful diversion of assets by them, and alleges that the business of the corporation is being conducted at a great loss and greatly prejudicial to the interests of its creditors and stockholders, and ¡that its business cannot be continued with safety to the public and advantage to the stockholders. The several averments of the bill are verified by a specific affidavit of one of the complainants.

An order to show cause was issued, without restraint, and at its return an answer was filed by defendant corporation in which practically all of the essential facts on which relief is based are denied; the answer is supported by specific affidavits of verification, and also embodies a counter-claim against complainants, alleging that certain patents belonging to defendant corporation are in the name and under the control of complainants and should be assigned to defendant corporation, and praying for a decree directing the assignment of these patents.

The bill does not allege that defendant company is insolvent. It alleges that its assets are $18,000, of which $10,500 is cash, and its liabilities about $4,000. The allegation of danger of future insolvency is based upon the claim that nothing is being done to promote the interests of the company and no revenues are being received, while its expenses are $250 per month for salaries. The answer discloses as asset's cash to the amount of $8,289.38, bills receivable of the nature of quick assets to the amount of $1,791.55, and the patents which were made the basis of the capitalization of the corporation, and denies that it has liabilities to the amount of $4,000; its total expenses are stated as $300 per month, including .rent. It accordingly is clear that a condition of insolvency neither exists nor is presently threatened.

In the adjudication of applications for the appointment of receivers of corporations, the court of chancery of this state is required to observe certain well-defined limitations upon the exercise of that power.

The statutory power found in our Corporation act has reference only to corporations which are actually or potentially insolvent. Section 96 of that act subjects foreign corporations doing business in this state to the provisions of the act, so far as they can be applied to foreign corporations; accordingly in the appointment of receivers of foreign corporations that section can only be understood to contemplate insolvent foreign corporations. And, as is pointed out in Minchin v. Second National Bank, 36 N. J. Eq. 436, there are provisions of the act relating to insolvent corporations which obviously cannot be applied to insolvent foreign corporations, since the court of chancery of this state cannot prevent a foreign corporation, from exercising its franchises in another state. As there stated it can, under our statute, through the medium of a receivership, sequester the property in this state of an insolvent foreign corporation and administer it here for the benefit of creditors and stockholders, but it can do but little more; thus the efficacy of the provisions of section 96 of our Corporation act, so far as it relates to receivers of foreign corporations, is confined to securing to creditors and stockholders, citizens of this state, a just proportion of the property in this state of foreign corporations when insolvent. See, also, Albert v. Clarendon Land Co., 53 N. J. Eq. 623. Whether under our statute a receiver of an insolvent foreign corporation may be appointed without an adjudication of insolvency first being made in the state of the domicile of the corporation, need not be here considered. See McDermott v. Woodhouse, 87 N. J. Eq. 615. It follows that any relief that may be herein awarded to complainant must emanate from the general powers of this court.

The recent case of Morse v. Metropolitan Steamship Co., 87 N. J. Eq. 217, reviews at some length the circumstances which may apjmopriately call into activity the general powers of a court of equity to appoint a receiver of a solvent domestic corporation. But, as already stated, the present application is for the appointment of a receiver of a solvent corporation of another state and for an injunction restraining the corporation and its officers and directors from exercising any of its privileges or franchises.

It is clear that the measure of relief here sought cannot be properly awarded, even though the verified denials and affirmative averment's of the answer be wholly disregarded. Hot only is this court unable to enforce a decree of that nature out of this state, but such decree, could it be enforced, would clearly be operative to regulate the management of the internal affairs of a foreign corporation, since it would wholly deny to that corporation the exercise of its corporate functions. Jackson v. Hooper, 76 N. J. Eq. 592, 604. Hor does it seem that any lesser degree of relief can be here administered in behalf of complainants with due regard to the rule that a court should not take jurisdiction of the internal affairs of a foreign corporation. Cases are to be found in which peculiar circumstances have been deemed adequate to justify relief against certain proposed acts of solvent foreign corporations within the state where relief has been sought (see Corry v. Barre Granite Co. (Vt.), 101 Atl. Rep. 38, and cases there cited), but relief of the nature here desired should be administered in the state of the domicile of defendant corporation.

I will advise an order dismissing the order to show cause.


author: Lewis, V. C.

text:
    William R. Ross, petitioner, v. Eleanor Ross.
    [Decided July 10th, 1918.]
    The evidence in this ease — Held, to warrant a decree of divorce on the ground of the wife’s adultery.
    On petition for divorce.

      Messrs. Queen & Stout, for the petitioner.

      Mr. J. Emil Walscheid, for the defendant.
   Lewis, V. C.

The petitioner in this case has presented evidence that convinces me that he is entitled to a decree for divorce against his wife.

The parties were married on February 27ith, 1907. He was a motorman and she was employed as a domestic. Their residence was in Brooklyn until the summer of 1907, when the petitioner came to live in this state. One child, born July 29th, 1908, was the fruit of the union, and at the time of this hearing is being cared for by Mrs. Margaret Boss, an aunt of the petitioner, all expenses in connection with the same being paid by the petitioner. Shortly after the birth of the child, troubles arose in the household, owing to the use by the defendant of intoxicating liquors. She was arrested at times, and the petitioner procured her release, but, finalty, she was sent, to the House of Good Shepherd in Brooklyn. From this institution she was also discharged through the intercession of the petitioner, but she was again arrested. Upon her release on this occasion, she brought suit in Brooklyn against her husband for separate maintenance. It was then that the petitioner took up his residence in New Jersey', and they lived apart from August, 1909, to September, 1915. The petitioner then wrote to his wife asking her to come to New Jersey, and they met and made arrangements, the result of which was the taking of an apartment at Ho. 299 Monmouth street, Jersey City. At this address they lived together from September, 1915, until December, 1915. The defendant for a short time abstained from the use of intoxicants and then resumed her habits, which she continued until December 10th, and on this date the testimony discloses that she set fire to her apartment and was arrested on a charge of drunkenness. After a hearing, she was convicted in the second criminal court of Jersey City and sentenced to the county jail for ninety days. A consideration of the conduct, habits and disposition of the defendant leads one unhesitatingly to the conclusion that her morals were such that she might commit the offence charged against her under the circumstances as related by the corespondent, William Skew. Her solicitor contended that the views expressed and the rules laid down in the case of Letts v. Letts, 79 N. J. Eq. 630, should be applied, but, as I indicated at the time, I think the evidence in this case reveals an entirely different situation. The vulgarity of the story told herein does not necessarily lead a reasonable person to regard it as entirely improbable. The corespondent stands unimpeached. There is nothing before me to indicate that his testimony was not given in the interests of justice. His story must be received with great caution and scanned carefully. This was done, and a searching cross-examination failed to shake it. It has corroboration from other lips, and one observing the corespondent and these witnesses must have been impressed with the fact that they were ingenuous and relating a truthful account of the defendant’s relations with Skow. He says that he had intercourse with her on two occasions. These offences were committed on November 28th, 1915, and the second on December 5th, 1915. They took place in a woodshed in the cellar of No. 299 Monmouth street, Jersey City. Show’s evidence as to the first occasion is as follows:

‘■Q. Will you describe to the court just when it was and where it was and under what circumstances it took place?
“A. Well, I was down chopping wood one Sunday morning and Mrs. Ross came down while I was chopping wood and she asked me for ten cents and I pushed her away and told her not to bother me and then I goes up and goes over to the other woodshed and she comes in after mo and she threw her arms around me and she asked me again for ten cents and I said no, and she kept on pleading and wanted mo to be sure that I will come down this afternoon, and she lifted up her clothing and I gave her a quarter that afternoon. She came down and she laid on the burlap in the woodshed and I had connections with her.”

His evidence relative to the second occasion is as follows:

“Q. Was there any other occasion when you did that?
“A. Then the Sunday following, I was down there again chopping and she came down and she asked me for money and I gave her a halt dollar and she came down in the afternoon the same as the first.”

Mrs. Christina Skow, the mother of the corespondent, who lived during the events described by her son at the same address as the Ross family, testified 'that she heard the voices of her son and Mrs. Ross in the cellar. She knew they were down there. Skow says that .one of the expressions used by the defendant when in the basement was “come on.” His. mother says that on one occasion she heard Mrs. Ross, who was down in the basement, use these words. The effort made to prove that it was impossible to hear a voice in the basement from the Skow apartment failed.

After the arrest and conviction of the defendant in the second criminal court of Jersey City, Eoss asked Mrs. Skow if she knew anything about his wife and Mrs. Skow told him to ask her son William. Mrs. Skow had previously informed Eoss, whose apartments were opposite her’s, that his wife was continually in the cellar and that she was with men. Eoss talked to Skow, the corespondent, and the latter told him that he had had intercourse with Mrs. Eoss. Upon examination he gave as his reason for disclosing to the petitioner his relations with the defendant that he felt it his duty to see Eoss right, as his wife was carrying on and had set fire to the house. It was quite apparent that Skow and Eoss were unsophisticated. After hearing the corespondent’s story, the petitioner went with Skow, the corespondent, and Mag-nus Peterson to the county jail and confronted his wife there Peterson, according to the testimony, appears to have accompanied Eoss as a friend. A confession as to the commission of the offences is related by the three. Eoss’ account is as follows:

“Q. Tell the court what you said and what she said and what the others said.
“A. I asked her how much money she got off William Skow, and she at first said ‘Noand I said, ‘Yes, you did,’ and she said ‘No,’ and I said, ‘Yes you did,’ and she said, ‘How do you know?’ and I said, T was told so,’ and she said, T got 50 cents for one time and a quarter another time;’ and I said, ‘What did you give him for his money?’ and she said ‘Nothing,’ and I said, ‘Yes, you did;’ and she said, ‘No, I did not;’ so I called in William Skow.
“Q. Where was he?
“A. He was sitting out in the little hall, and I called him in, and he stayed back of me, and I asked him if he was lying to me, or who was lying to me, and he said, ‘Ross, I am not lying to you;’ so finally she said, T let Skow have the best of me twice.’
“Q. Who was there at that time?
“A. Mr. Peterson.”

Peterson and Skow both corroborate petitioner as to the admission of the defendant when confronted by Skow.

Mrs. Eoss denies her intimacy with Skow. She admitted having borrowed money from him, but entered a denial of the story of the offences in the cellar of the Monmouth street home. Of course, this confession could not alone be relied upon to support a decree for divorce, but it gives corroboration to the story related by the corespondent and the other witnesses of the petitioner. Skow, as above stated, appears to be imsbalcen in his testimony, and, aside from his improper conduct with defendant, there is nothing affecting his character shown; so the situation is not as in Clare v. Clare, 19 N. J. Eq. 37. The story as told by Skow accords with the defendant’s proved habits and character. Adams v. Adams, 17 N. J. Eq. 325.

I think the requirements for divorce so comprehensively set forth in the case of Berckmans v. Berckmans, 17 N. J. Eq. 453, are met by the testimony offered in this case.

I shall, in accordance with the views above expressed, advise a decree nisi for the petitioner.


text:
    Henry L. Steitz v. Old Dominion Copper Mining and Smelting Company et al.
    [Decided July 26th, 1918.]
    1. A bill for rescission and an accounting for profits by a stockholder alleging fraudulent confession of judgment and transfer of its property in satisfaction thereof, and also subsequent transfers, though not making the ultimate transferee a party, will not be dismissed, especially in view of chancery rule 13.
    2. Where a stockholder alleges in his bill that at a certain time ho became the holder of a certain per cent, of the stock of a corporation, this is sufficient to sustain the bill. The objection that he is not such a stockholder as should be permitted to maintain such a bill is a matter of defence.
    3. Where a bill alleges fraud committed by officers and directors of a corporation against its stockholders, it does not involve investigation into the affairs and relations of a foreign corporation at the suit of a nonresident as to property without the state.
    4. The allegations of the bill in this ease — Held, to show sufficient reason for suit by a stockholder instead of by the corporation.
    5. Such allegations also held to be sufficient to eliminate the charge of laches, notwithstanding long delay.

      6. That a defendant obviously having knowledge of some of the facts may not have knowledge of all of the facts of which the bill seeks discovery, is not good ground for dismissing the bill.
    7. It is no ground for the dismissal of a bill that the court would not appoint a receiver as prayed, that being only a part of the relief prayed for.
    On motion to dismiss bill of complaint.

      Mr. Carlyle Garrison, for the complainant.

      Messrs. Collins & Corbin and Messrs. Dunbar, Nutter & McClennen (of the Massachusetts bar), for the defendant Old Dominion Copper Mining and Smelting Company.
   Lewis, V. C.

The complainant in his bill states that in 1913 he became the holder of the stock of the Old Dominion Copper Mining Company of New York, to the extent of about two per cent. This corporation apparently never did any business in New Jersey and never owned any property therein, and its organization was abandoned in 1889.

He alleges that this corporation was organized in 1880 and owned property in Arizona, and that in 1884 the company confessed judgment in favor of the copartnership of Cope, Cole & Company of the State of Maryland, and that the claim on which the judgment was confessed had previously been paid in part and was without consideration, and that members of this partnership were directors of said New York company and concealed from the other directors this confession of judgment.

He alleges that later in 1884, pursuant to the alleged consent of more than two-thirds in number and amount of the stockholders in the New York company, a mortgage was given and filed of record covering all the property of the New York company.

He alleges that in 1886 all the property was sold to William Keyser, a partner in Cope, Cole & Company, to satisfy said confessed judgment.

He alleges that in 1888 Iieyser conveyed this property to the Old Dominion Copper Company of Baltimore, a Maryland corporation.

He alleges that in 1895 the property was purchased by Leonard Lewisohn, of New York, and Albert S. Bigelow, of Boston, Massachusetts, on behalf of the defendant Old Dominion Copper Mining and Smelting Company, a corporation organized under the laws of New Jersey, but owning no property in this state.

He charges that the Maryland corporation and the New Jersey corporation took with knowledge of the earlier transaction.

He alleges that the directors of the New Jersey corporation have passed a resolution by which they have authorized and directed that all of the property of the corporation be sold and transferred to the Old Dominion Company, a corporation organized in Maine, and that a meeting of the stockholders of the New Jersey corporation has been called to be held in Jersey City March 15th, 1917, to act on this resolution of the directors.

The amended bill of complaint was filed in June, 1917, and does not negative the inference that the stockholders of the New Jersey corporation did vote to ratify the conveyance authorized by the directors, and the allegations of the bill do not negative the fact that the conveyance by the New Jersey company to the Maine company was made and executed, and the consideration for it paid and distributed to stockholders of the New Jersey company before the original bill of complaint was filed.

The bill of complaint does not allege that the complainant acquired his stock by operation of law, or that he paid any consideration therefor, but, at the suggestion of the court, made on the oral argument, counsel for complainant has annexed to his brief, for the purpose of amending the bill, that the complainant entered the employ of one John Leighton, of New York City, who was interested in various enterprises at the time, in the early part of the year 1901; that he subsequently became actively associated in the business affairs of said Leighton, acting as his secretary and in a general confidential capacity up to the time of the death of said Leighton; that said Leighton, in the later j^ears of his life, lost most of his money so that he could not pay complainant herein for services rendered, and in the year 1913 Leighton transferred to complainant the stock which the complainant now holds, as consideration in part for services heretofore rendered. Twenty-four years had, therefore, elapsed after the organization of the New York corporation was abandoned; and twenty-nine years after the confession of judgment in 1884, which is claimed to be fraudulent, and the basis of the sale made in 1886, twenty-seven 3'ears. before the complainant became a stockholder.

The bill purports to make defendants the New York corporation, the Maryland corporation, the New Jersey corporation and certain individuals, all non-residents of New Jersey, claimed to be participants in the original transaction. It does not purport to make the Maine corporation a defendant.

The bill prays a discovery from all the respondents as to the original transaction, and as to the property which was the subject of that transaction in which, on the allegations of the bill, many of the respondents took no part.

The bill seeks a rescission of that transaction, or an accounting of the resultant profits.

Counsel for the defendant “Old Dominion Copper Mining and Smelting Company” ask that the bill be dismissed for the following reasons:

First. There is a fatal absence of indispensable parties defendant.

Second. The complainant does not show himself io be such a stockholder as should be permitted to maintain such a hill of complaint.

Third. This court should not undertake an investigation of this kind into the affairs and relations of foreign corporations at the suit of a non-resident as to property not within the state.

Fourth. There has been no sufficient effort to have the New York corporation sue for the wrong, if any, done to it, and no sufficient excuse for not making that effort.

Fifth. The delay of over twenty-five years by the New York corporation and by its officers, directors and stockholders has not been sufficiently excused or accounted for.

Sixth. The discovery sought from the New Jersey corporation is of matters occurring before it was organized and in which it took no part.

Seventh. No sufficient ground is alleged on which to base an appointment of a receiver of the New York corporation by a New Jersey court.

The matter is to be determined, of course, upon the allegations in the bill.

As to the first objection: Upon the circumstances alleged in the bill I do not find a fatal absence of indispensable parties, especially in view of chancery rule 13. See, also, Wilson v. Am. Palace Car Co., 64 N. J. Eq. 534; 65 N. J. Eq. 730; 67 N. J. Eq. 262.

As to the second objection: It sufficiently appears on the face of the bill that complainant is a stockholder. The defendants’ objections are matters of defence.

As to the third objection: I can see no merit in it. The matters involved in the bill are not internal affairs of a corporation, but are matters based on allegations of fraud committed by officers and directors of a corporation against the stockholders thereof.

As to the fourth objection: The allegations of the bill, if true (and on this motion they must be assumed to be true), show sufficient reason for suit by a stockholder instead of the corporation itself.

As to the fifth objection: The allegations of the bill are sufficient on the face thereof to eliminate the charge of laches, which might, perhaps, otherwise be inferred from the long delay.

As to the sixth objection: Obviously, the defendant must have within its knowledge, possession or control some of the facts of which discovery is sought, as specified in the complainant’s bill.' The fact that it may not have knowledge or possession of all the information of which discovery is sought by complainant in his bill is, of course, no ground for dismissal of the bill.

As to the seventh objection: The appointment of a receiver is only one portion of the relief prayed for by complainant. Even assuming that this court would not appoint the receiver as prayed for, that in itself is no ground for dismissal of the bill.

The only application before me is for the dismissal of the bill, and, in my ojiinion, tire allegations set forth in the hill are sufficient to maintain it upon this motion.

I will, therefore, advise an order denying the motion and directing under chancery rule 67 that it stand over until the hearing.


text:
    Harrington Company, a corporation, v. Otto G. Horster et al.
    [Decided August 6th, 1918.]
    1. When land is sold for non-payment of taxes the law will guard the owner’s rights with the greatest care.
    2. Every step in the proceedings must be performed, as that is a condition precedent to the validity of the sale.
    3. The certificate of sale must contain all the recitals required by law.
    4. The statutes giving the right of redemption are liberally construed in favor of the owner.
    On pleadings and proofs.

      Mr. Adolph L. Engelke, for the complainant.

      Mr. Otto A. Stiefel, for the defendants.
   Lewis, V. C.

The bill in this cause is filed for the strict foreclosure of a certificate of tax sale made by the collector of taxes of the city of East Orange to one I. Baldauf, and assigned by the purchaser to complainant.

The authority for the filing of the bill of complaint is to be found in a case decided by the present chancellor. Mitsch v. Owens, 82 N. J. Eq. 404.

The certificate, which has been admitted in evidence, and the testimony taken, show that the land in question, formerly belonging to the defendants Otto Gr. Horster and wife, was struck off and sold to I. Baldauf under proceedings taken by Louis McCloud, collector of taxes of the city of East Orange, to enforce the collection of delinquent taxes assessed for the year 1912. There is no denial that the taxes were unpaid, or that the taxes were regularly assessed and collectible by the city collector.

Taxes being due the city of East Orange it became the duty of the collector to insist upon their collection.

The revision of the tax laws adopted in the year 1903 provided the method for the enforcement of the rights of the city of East Orange, and pointed out the methods to be adopted by the collector of taxes.

The defendants contend that the complainant has not proved its right to foreclose the certificate of tax sale, basing their contention upon grounds directed merely to the execution and acknowledgment of the certificate of tax sale, the defendants insisting that the court should set aside the tax sale certificate, which would mean that the complainant would then be entitled to have returned to it from the city of East Orange the amount paid on tax sale, plus six per cent, interest. See 4 Comp. Stat. p. 5138 § 60:

“Where the tax sale shall be set aside because of defective proceedings on the part of its officers, the taxing district shall refund to the purchaser the price paid by him on the sale, with simple interest, upon his assigning to the tax district the certificate of sale and all his interest in the tax and tax lien, and the taxing .district may re-advertise and sell if .the tax lien remains in force.”

The tax sale certificate is not attacked until the testimonium clause is reached. That reads as follows:

“In Witness Whereof, I, Louis McCloud, Collector of Taxes of the City of East Orange, have hereunto set my hand,
Seal of the and I, Lincoln E. Bowley, City Clerk of said City
City of East of East Orange, have hereunto affixed the corpo-
Orange. rate seal of the said City, and attested the same this twenty-third day of October, in the year one thousand nine hundred and thirteen.
Attest: Louis McCloud,
Lincoln E. Bowley, Collector of Taxes.
City Cleric.”

Proof Avas then made by the city clerk as folloAvs:

Be it remembered, That on this twenty-third day of October, in the year of our Lord one thousand nine hundred and thirteen, before me, a Master in Chancery of New Jersey, personally appeared Lincoln E. Rowley, who, being duly sworn according to laiv, on his oath says that he is the City Clerk of the City of East Orange; that Louis McCloud is the Collector of Taxes of said city; that he [deponent] knows the corporate seal of said city; that the seal affixed to the foregoing deed is such corporate seal; that he saw the said Louis McCloud sign said deed and heard him acknoAvledge that he signed, sealed and delivered the same as his voluntary act and deed for the uses and purposes therein expressed, and that deponent at the same time affixed the corporate seal of said city thereto and attested the same.
Lincoln E. Rowley,
Sworn and subcribed to before me this day of, A.D. 1913, at East Orange, N.J.
Borden D. Whiting,
M. C. C. of N. J."

Section 52 of the revision of the tax laws adopted in the year 1903 says:

“Within ton days after the sale the collector shall deliver to the purchaser a certificate of sale under his hand and seal and duly acknowledged by Mm as a conveyance of land,” &c.

The question to he decided is simply whether'the collector of taxes has complied with the statute, which requires that the certificate of sale shall be delivered under his hand and seal.

It Avill be obseiwed that the collector of taxes uses the words “have hereunto set my hand,” and that he does not mention the word “seal.” If he had done so, he would have complied with the requirement of the statute.

In regard to the question of the requirement of a seal, the legislature, in the year 1904 (P. L. 1904 p. 208: Comp. Stat. p. 1540 § 20a), provided that no instrument shall be void for lack of a seal provided the attestation clause and the acknowledgment or proof shall recite that the same was signed and sealed by the makers thereof.

I am unable to see, hoAvever, how this helps the complainant in the instant case;, as he does not state in the testimonium clause that he did seal it. I am of the opinion that the statute must be strictly complied with and that his seal is requisite. The city clerk says that he affixed the corporate seal of the city, but that is not the same and is not what the statute requires.

The sale of land for non-payment of taxes is such an extreme interference with private property that the law guards the rights of the owner with the utmost care. The due performance of every step in the proceedings, even in the most minute particulars, is a condition precedent to the validity of the sale, and the deed to the purchaser must contain all the statutory requirements. Lyon v. Alley, 130 U. S. 177; Brown v. Veazic, 25 Me. 359; Wilsons v. Doe d. Bell (Va.), 7 Leigh 22.

Yothing can be plainer, I think, than that McCloud did not seal the instrument with his seal; that he did not pretend to; that, in fact, the corporation seal is affixed; that the instrument declares it was affixed by its custodian, the city clerk, who, moreover, swears that he affixed it; the city clerk also swears that he attested the seal — in other words, verifies its genuineness as the city’s corporate seal; that, therefore, there is no subscribing witness who can prove the instrument.

The lack of Mr. McCloud’s seal is not helped out by the act of 1904, because that act requires that both the attestation clause and the acknowledgment shall recite that the instrument was signed and sealed by the makers thereof.

It is not sufficient that the attestation clause shall recite that the instrument was signed and sealed by the makers thereof; it is not sufficient that the acknowledgment of proof shall so recite; the statute requires that the recital shall appear in both cases. Moreover, the city clerk is not a “maker” of the instrument; a perusal thereof shows that it is the instrument of Louis McCloud, collector of taxes of East Orange; he does not recite that he affixed his seal in the “attestation” clause; on the contrary, he permits Mr. Rowley to recite that Rowley affixed the corporation seal. In other words, the attestation affirmatively shows that what the complainant contends for is the very thing which was not done, but which is required in order to bring the act of 1904 into operation.

We are dealing in this case with a certificate or instrument not inter paides founded upon a consideration passing from one part}'- in the suit to his opponent, but we - are dealing with a certificate whose only right to, exist can be found in a statute, which prescribed exactly how that certificate to have validity against the defendants shall be executed and perfected — the certificate of a stranger claiming to exercise a confiscatory statutory right; and before the complainant can have any remedy in this court, it most show that its statutory right exists, by producing a certificate executed according to the statute. Partridge v. Mechanics National Bank, 77 N. J. Eq. 208; affirmed, 78 N. J. Eq. 97; Campbell v. Hough, 68 Atl. Rep. 760; 73 N. J. Eq. 601; In re Coyles’ Estate, 99 Atl. Rep. 117; Coe v. Midland, 31 N. J. Eq. 157; Pennsylvania Company v. Marcus, 99 Atl. Rep. 405.

I am inclined to the opinion that this tax sale certificate, not being in compliance with the statute, gives the complainant no right to foreclose according to the statute, and no right to the rents and profits demanded in this suit.

I shall advise a decree in accordance with these views.


text:
    William McCormack et al. v. Bridget Burns.
    [Decided September 20th, 1918.]
    1. The court of chancery has no jurisdiction to try a ease involving fraud in the procurement of a will, or irregularities in the execution of the same, especially where the property involved is personal property.
    2. The rule that equity will entertain a suit to set aside a judgment obtained by fraud, is subject to exception in the case of a decree admitting a will to probate.

      On bill, pleadings and testimony.

      Mr. John F. Gough, for the complainants.

      Mr. Charles Young, for the defendant.
   Lewis, V. C.

The bill in this cause prays that a decree may be made that a certain paper-writing admitted to probate by the surrogate of Hudson county is not the last will and testament of Hanorah McCormack, deceased, and was contrived by the defendant in fraud of the decedent and the complainants, and that the letters of administration with the will annexed were obtained by the defendant in fraud of the complainants, and that the defendant be restrained and enjoined from setting up in any court or in any jurisdiction whatsoever, and from using in any manner, for any purpose, the order and decree of the surrogate admitting the paper-writing to probate, and granting administration upon the estate of the decedent, and from using in any manner the letters of administration granted to her by the surrogate, and that she be directed to account to such administrator as may be appointed of the estate of the decedent for whatever personal property of the decedent may have come into her hands.

The conclusion that I have reached is that this bill must be dismissed. The proofs submitted satisfy me that the complainants could not prevail, even if this court had jurisdiction to try the questions at issue, as I am satisfied that there was no fraud in the procurement of the will, nor do I think that the will was improperly executed. But, as I am satisfied that this court has no jurisdiction to try cases involving fraud in the procurement of a will or irregularities in the execution of the same, the bill will be dismissed for that reason.

The cases which will be cited make this so clear that I do not think there is any necessity for going into the matter at any very great length.

Where a will is admitted to probate by the surrogate the parties interested have three months in which to appeal to the orphans court if they are residents of this state, and six months if non-resident. If they do not appeal within that time there is no remedy, so fax as I can discover, as it has been held that the surrogate cannot, under any circumstances, reopen or vacate his decrees. If the will should be probated in the prerogative court, probate in solemn form may be allowed and the probate set aside on sufficient cause being shown. This may be done in. the prerogative court, even though years may have elapsed since the will was admitted to probate in common form. But this is not true where the will is admitted to probate by the surrogate.

Eor over a hundred years it has been the settled law of England and of this country that courts of equity have no jurisdiction in cases of fraud in the procurement of wills. The origin of the rule seems- to have been that the ecclesiastical courts had full jurisdiction, and the courts of equity would not assume jurisdiction for that reason. Courts of equity have jurisdiction in all questions of fraud unless there is a complete and adequate remedy at law, except in this particular instance. When the courts of equity finally decided that jurisdiction in such matters was vested solely in the ecclesiastical courts, it must be remembered that proof in solemn form might be asked thirty years after the will had been admitted to probate. That was a very different thing to the limitation now imposed of three to six months where the will has been admitted to probate by the surrogate. Some courts have tried to find a way- out of the dilemma by holding the parties guilty of fraud in the procurement of the will, and who thereby became beneficiaries, trustees for the parries injured thereby. In the case of Mellor v. Kaighn, 89 N. J. Law 543, the opinion of the court of errors and appeals suggests, obiter dictum, that in such eases there may be a remedy in equity.

The legislature, in 1917, passed an act which read as follows:

“1. The surrogates of the several counties of this state are hereby given the power and authority to open, vacate, modify or set aside, or to enter as of a former time, a decree or order made in their court; or to grant a new trial or a new hearing for fraud, newly-discovered evidence, clerical error or other sufficient cause. The powers and authority conferred by this act must be exercised only in a like case and in the same manner as a court of record and of general jurisdiction exercises the same powers.
“2. This act shall take effect immediately.
“Approved March 26, 1917.”

It may be that under this act the complainants, if they succeeded in establishing fraud in the procurement of this will, might find their remedy; but I am not called upon to pass on the question of whether, in this case, they can take advantage of that act, or whether it would be constitutional to allow them to do so.

In Knikel v. Spitz, 74 N. J. Eq. 581, the court said:

“This court has no jurisdiction to decree the will void. Fraudulent wills constitute the great exception to tire jurisdiction of courts of equity arising from fraud.”

Bisp. Eq. (5th ed.) § 199, lays down the same rule; and the doctrine is well stated in 1 Schoul. Wills (5th ed.) § 223.

The property involved in this suit, it should be mentioned, is personal property. Of course, if it were real estate, there would be a remedy in ease of fraud in the procurement of the -will, by proceedings in the law courts.

It is a well-recognized rule that equity will entertain an action to set aside a judgment which has been obtained by fraud. The rule has a well-recognized exception, however, that seems quite clearly established. This is, that equity will not set aside the decree of a probate court admitting a will to probate, on the ground that such probate was obtained by fraud. The reason for the exception is not entirely clear, but it seems to be held to result in some way from the exclusive jurisdiction which probate courts have over the probating of wills. Holden v. Meadows, 31 Wis. 284; In re Whitehead’s Estate, 94 Atl. Rep. 796; Mellor v. Kaighn, 89 N. J. Law 543; Vincent v. Vincent, 70 N. J. Eq. 272.

I, therefore, feel compelled to advise a decree that the bill be dismissed for lack of jurisdiction.


author: Backes, V. C.

text:
    Hannah Emson Wilbur v. Reuben Win et al.
    [Submitted April 30th, 1918.
    Decided May 3d, 1918.]
    1. In a suit to foreclose, a letter written by the mortgagor to the complainant, asking her to give him credit oh an account consisting of principal and interest due on mortgages and a balance of a store account— Held, an acknowledgment of the existence of mortgage debts, so that the presumption of payment would not prevail, although more than twenty years had elapsed without cash payment on principal or interest.
    2. In an account rendered interest should not have been charged upon the principal fz-om the date of execution of the mortgages to the date of settlement where payments on account of the principal had been made, and no interest on such payments credited.
    • 3. Where the mortgagor at his first opportunity protested against the cozrectness of the account, and the account was never corrected, the mortgagor’s silence would not amount to acquiescence, so that it could be treated as an account stated.
    4. An account stated rests upon mutual agreement of the parties as to its correctness. It may be established by formal consent, or by circumstances from which assent may be implied.
    5. An account rendered may develop into an account stated by acquiescence, as by a failure to object to its items within a reasonable time, and whether there was such acquiescence is usually a mixed question of law and fact.
    6. An account stated may be avoided for fraud or mistake.
    On bill, &e.

      Mr. Aaron V. Dawes, for the complainant.

      Mr. David O. Watkins, for the defendants.
   Backes, V. C.

This bill is filed to foreclose two mortgages made by Jacob Win to Christian D. Emson, one dated May 23d, 1883, for $3,-000, the other July 9th, 1884, for $1,000. Christian D. Emson bequeathed them to his son Ephraim P. Emson, who in turn bequeathed. them to his daughter, the complainant. Win, the mortgagor, is deceased, and his children, his heirs-at-law, are the defendants. They set up that the mortgages were paid more than twenty years before the filing of the bill (March 14th, 1917) and that there has been no acknowledgment of their existence since, by payment on account of either principal or interest. On bringing the cause on for hearing, counsel took a reference to a master to ascertain the amount due, if anything, and he has reported that there is due to the complainant, on account of the principal, $1,122.15, an amount alleged to have been stated between the mortgagor and Ephraim P. Emson on March 24th, 1896 (less a deduction of $73.50 agreed upon), with interest from that time, a total of $2,424.30. To the report exceptions were filed, and it is agreed that in examining the exceptions the depositions taken before the master may be used in disposing of the defence of payment presumed from the lapse of time. It is an established fact that there was no cash payment on account of either principal or interest after 1896. Ephraim P. Emson died shortly after an account alleged to have been stated was rendered, and the failure of the complainant to take legal action to enforce the mortgages within twenty years is unexplained, and were it not for a letter written by the mortgagor to the complainant, in 1899, in which he asked her to give him credit on the account for $61, for items which he claimed should have been included in the account, and for a load of manure furnished to the complainant on March 17th, 1897, three days within the twenty ¡years of the filing of the bill, the case would be controlled by Blue v. Everett, 55 N. J. Eq. 329; affirmed, 56 N. J. Eq. 455, and the bill would have to be dismissed. The account was made up of the principal and interest due on the mortgages and the balance of a store account (Emson was a merchant), and while it is debatable whether, by the letter requesting the credit, the moxigagor referred to the mortgage account or the merchandise accoxxnt, it appears that there was something due to the complainant on one or the other, or both, at the time it was written, and the fair inferexxce is that the mortgagor had iix mind the combined account which included the mortgages, and I conclude that he thereby acknowledged the existence of the mortgage debts. However, the defendants are disposed to pay what is justly due, and their principal argument was devoted to pressing the exceptions to the amount found due.

In March of 1896, Emson rendered to the mortgagor a statement of their dealings, which, for a better understanding, I have rearranged, leaving the items intact, and as rearranged, it reads:

Dr.
Mortgage May 23d, 1883........... $3,000 00
Interest to March, 1896 ........... 2.310 00
$5,310 00
Cash Cr. interest paid............ 1,560 00
$3,750 00
Mortgage July 9th, 1884........... $1,000 00
Interest to March, 1896........... 700 00
1,700 00
Book account .............. 1,292 34
$6,742 34
Or.
(April 24th, 1892), cash, J. Win... $400 00
September, 1891, by Jack Davis.... 87 50
(August 24th, 1S92), Pennington ins............................ 2,050 00
Three small show-cases ........... 15 00
1894, one large Pros. Pettu......... 30 00
(February 16 th, 1894), insurance check ......................... 1,395 45
(March 8th, 1895), Manchester.... 430 00
(April 15th, 1895), Mt. Holly..... 1,222 24
5,620 19
Amount due ............... $1,122 15

The dates in parentheses do not appear in the statement; they were furnished by the complainant from her father’s books. In 1891 the buildings on the mortgaged premises were destroyed by fire, and the items represent the insurance collected by the mortgagee. It will be observed that interest was calculated upon the principal of the mortgages from the date of their execution to the date of the settlement, whereas, it is obvious, that the interest should have been calculated upon the balances due from time to time, as payments on account of the principal were made or the accountant should have surcharged himself with interest upon these respective amounts. Mr. Emson, having charged interest on his mortgages, should have allowed interest on the sums he received in liquidation of the debts. This is only just and should be corrected.

I have calculated the interest from the dates of the payment of the insurance money to the date of the settlement, March 24th, 1896, and if the method upon which it is worked out does harm to either party, counsel may direct my attention upon motion for the final decree.

Balance as per statement of March 24th, 1896 ................................ $1,Í22 15
Interest—
J. Win, $400, April 24th, 1892, 3 yrs., 11 mos.............................. $94 00
Pennington insurance, $2,050, August 24th, 1892, 3 yrs., 7 mos.................... 440 75
Insurance check, $1,395.45, February 16th, 1894, 2 yrs., 1 mo., 8 days............ 176 27
Manchester, $420, March 8th, 1895, 1 yr., 16 days ............................. 26 28
Mt. Holly, $1,222.24, April 15th, 1895, 11 mos., 9 days......................... 68 98
Additional credit agreed to by complainant, 73 50
- — —■ S79 78
$242 37
Interest to be added-—
On $824.28, from April 18th, 1891, to March 24th, 1896, 4 yrs., 11 mos., 6 days (hereafter explained) .................................... 243 95
Leaving amount due March 24th, 1896............ $486 32
Interest on this sum from March 24th, 1896, to the • date of the master’s report, February 5th, 1918, 21 yrs., 10 mos., .12 days...................... 624 89
Amount due complainant ................. $1,111 21

The item of $243.95 is interest on the balance struck April 18th, 1891, on the book account, $1,292.34. It is a proper charge in the general adjustment of the interest. Interest on the running account between the parties is not allowed.

The master arrived at his result by treating the statement rendered by Emson to the mortgagor as an account stated and by adopting it as conclusive proof of the amount due. I fear that he did not give due weight to the evidence in holding that it was an account stated and he was clearly in error in thé force he gave to it as proof, assuming it to have been an account stated. An account stated rests upon the mutual agreement of the parties as to its correctness and may be established by proof of formal assent, or of circumstances from which assent may be implied. An account rendered may develop into an account stated by acquiescence, as by a failure to object to its items within a reasonable time, and whether there was such acquiescence is usually a mixed question of law and fact. Here there is no proof of an expressed assent, and the question is, Is it to be implied from the circumstances? The principals are both dead. Mr. Emson died within forty days after he prepared the account, and how and under what circumstances a copy came to the hands of the mortgagor, and whether he made objections, does not appear. The complainant, a young and inexperienced woman, took charge of her father’s vast estate, as executrix, and the first effort she made to collect the account, and so far as is shown that any mention was made of it by either party, was in 1899.' The complainant says this occurred at her home at Colliers Mills, while the defendants are as emphatic in their assertions that the meeting occurred in Philadelphia. However, at his earliest opportunity, the mortgagor insisted upon additional credit on the account of $61, already referred to, and at that time disputed the interest charges on the mortgages and offered to settle for $500, which was slightly over the amount then due. This we have from the lips of the complainant. Two> of the defendants, who said that the occurrence took place at their father’s home in Philadelphia, also state that he protested against the overcharge of interest and pointed out the error in the account to the complainant. Thereafter numerous efforts were made by both sides to reach a just settlement, all of which came to naught. Why the complainant delayed so long before bringing her suit is, as I have said, unexplained, and leads one to suspect that she had but slight faith in her claim. Fow, it seems to me, that the mortgagor’s silence of three years and more did not speak assent, and that mere lapse of time, under the circumstances, is frail timber upon which to rest an inference of acquiescence in the correctness of the account. Such an inference is met by an equally reasonable one that after the death of Mr. Emson, and with the consequent, change of claimants, the mortgagor, demurring but not contending, abided the time when demand for payment should be made upon him.

The rule is one of evidence and not of liability, and even if the account rendered be entertained as an account stated, the defendants would not be precluded from avoiding it on the grounds of fraud or mistake. “An account stated or settled is a mere admission that the account is correct. It is not an estoppel. The account is still open to impeachment for mistakes or errors. Its effect is to establish prima facie the accuracy of the items, without other proof.” Lockwood v. Thorne, 18 N. Y. 285; Eames Vacuum Brake Co. v. Prosser, 157 N. Y. 289; Spellman v. Muehlfeld, 166 N. Y. 245; Brown v. Vandyke, 8 N. J. Eq. 795.

The exceptions will be sustained to the extent indicated, and the master’s report will be modified accordingly. The complainant may take a decree for the amount herein found to be due.


text:
    G. P. Farmer Coal and Supply Company et al. v. Mayme H. Albright et al.
    [Submitted June 12th, 1918.
    Decided June 21st, 1918.]
    1. In a suit in equity to settle rival claims to the proceeds of an insurance policy, it is unnecessary for the insurance company to file a bill of interpleader when the company is already a party to the suit, although one of the rival claimants has not answered. The company may protect itself from suit by such claimant by petitioning the court to restrain such action.

      2. Where the insurance company is made a party to such suit it is entitled to costs, as it was required to appear and answer through no default on its part.
    On bill, &c.
    The bill disclosed this state of facts: The complainant G. P. Parmer Coal and Supply Company issued an attachment out of the Monmouth circuit against A. Pred Albright, and levied upon a policy on his life, payable to his wife, Mayme H. Albright, issued by the defendant New York Life Insurance Company. Leon .R. Taylor was appointed auditor, and upon his report judgment was entered in the action. The assured is now deceased and his widow and the attaching creditor lay claim to the insurance. The contract of insurance was made in the State of New York, and its laws subject life insurance to the claims of creditors. The insurance company has refused to make payment because of the uncertainty of the rights of the rival claimants. The prayer of the bill is that the money be ordered paid into court upon delivering up of the policy, and that the proceeds be applied to the payment of the complainants’ judgment. Mayme H. Albright, the beneficiary, is made a party defendant and has answered, contesting the complainants’ right and joining in the prayer that the moneys be paid into court. The New York Life Insurance Company, in its answer, assumes a neutral position towards the parties, and by cross-bill or counter-claim interpleads and has paid the insurance money into court. Motion is made to strike out the cross-bill or counter-claim.

      Messrs. Kellogg & Chance, for the complainants.

      Messrs. Durand, Ivins & Carton, for the defendant Albright.

      Messrs. Dickinson & Bodine, for the defendant New York Life Insurance Company. .
   Backes, V. C.

This bill is in aid of proceedings at law and in effect is in the nature of a bill of interpleader to settle rival claims to a fund. All parties in interest are joined in the suit, and in the circumstances a cross-bill of interpleader was unnecessary for the protection of the stakeholder. It is not necessary to file a bill of interpleader where the holder of a fund is already a party to a suit in equity, brought by one claimant against the other, to settle the right to the fund in his hands. 2 Barb. Ch. Pr. (2d ed.) 1-20; Dan. Ch. Pr. (6th ed.) 1567; 23 Cyc. 5; Lane v. New York Life Insurance Co., 56 Hun 92. A point is made of the fact that at the time the cross-bill was filed, the defendant Mayme H. Albright had not filed her answer submitting her claim to the jurisdiction of the court, and that, as the cause then stood, it afforded no protection to the insurance company as against her possible suit, at law upon the policy. This is inadmissible, for the reason that the court would have restrained her from such proceedings, upon the filing of a petition in the cause. Badeau v. Rogers, 2 Paige 209.

The cross-bill will be permitted to stand as an answer and as a petition for permission to j)ay the money into court and to be discharged. Such is the practice that should have been followed. A decree may be entered, as moved, that the policy be surrendered and the company be absolved from further liability thereon, and that it be dismissed from the suit. As the company was brought into court and required to answer, not because of any default on its part, it is entitled to its costs. A counsel fee of $50 will be allowed out of the fund, to be taxed as part of the costs, and to be eventually restored by the unsuccessful party.