author: Green, O. J.

text:
    Enoch Doughty, appellant, and Nathaniel Doughty, respondent.
    On a question of capacity, the mere expression of an opinion by a witness, not founded on any facts stated by him from which the court may judge of the soundness of the opinion express >d, if it be any evidence at all, is the lightest possible evidence.
    That the complainant, before the making of the contract, had had a severe attack of illness, from which time he was a less active, enterprising business man than before; that he was a man of intemperate habits; that he was subject to occasional fits arising from the habit of intoxication; that his mind was less vigorous than when his habits were correct, does not show that he was deprived of his right reason or incapable of managing his affairs or business.
    The bill stated that, at the time of the making of the partition sought to be avoided, the complainant was deprived of his right reason, and was of unsound mind and totally ineaple of transacting any business or of the government of himself and management of his afiairs, and stated what the partition was.

      Held, that under this bill the court could not decree for the complainant and sol asido the contract upon evidence of imbecility of mind and the ground that the partition was so unequal as, joined with the incapacity of the complainant, to raise a presumption of fraud in the defendant in procuring the deed of partition.
    Under what circumstances the lapse of twelve years will be a ground on which a court of equity may refuso to interfere to set aside a partition deed alleged to have boon obtained by the defendant from the complainant when he was of unsound mind.
    For the facts of this case see ante, page 227.

      Wilson and P. D, Vroom for the appellant.

      Jeffers and Browning for the respondent.
   The opinion of the court was delivered by the Chief Justice.

Green, O. J.

The bill charges that on or about the 6th of February, 1819, the complainant and defendant entered into a general partnership .in trade and business, including the buying and selling of real estate, dealing in lumber, wood and charcoal, building and sailing vessels, and farming; that each partner put in an equal amount of capital, and were to share equal in profits and loss ; and that the partnership, as the complainant believes, continued down to the time of the filing of the bill of complaint, 2d December, 1851. That during the continuance of the partnership the partners became seized of - divers tracts and parcels of real estate, and possessed of personal property of various kinds. That from the commencement of the partnership the defendant has been in the habit, of applying the money and property of the partnership to his own private use, and had not kept full and regular accounts.

The bill further charges, that about the 1st of June, 1832, the complainant was taken sick, and continued so for a considerable time. That during the latter part of June, 1838, and the month of July following, the complainant was deprived of his right reason, and was of unsound mind and wholly incapable of the transaction of any business, or of the government of himself and management of his affairs, and that he continued in this position up to the 1st of January, 1834.

That on his restoration to reason in January, 1834,'the complainant found to his surprise that the defendant had possessed himself of all the personal property of the partnership, and was informed by the defendant that he had executed a bill of sale to the defendant for all his interest in the personal property of the partnership, and also a deed for the complainant’s interest in certain real estate of the firm particularly described in the bill. That the complainant never received any consideration for the conveyance of the real or personal estate, and that he continued to occupy the same, notwithstanding the conveyance of his in-interest, up to July, 1844, pursuant to the terms of the partnership.

1. The bill prays an account of the partnership transactions.

2. That the deed and bill of sale may be declared fraudulent and void. -

3. An injunction to restrain the collection of the partnership debts, and the use by the defendant of the real estate.

4. A receiver to collect and receive the debts.

The answer admits the existence of a partnership prior to July, 1833, but alleges that on the 2d of July a dissolution of the partnership was agreed upon, and that on the 6th of July an instrument of dissolution, dated on the 2d, was executed. That on-the 4th of July deeds were exchanged between the parties conveying part of the real estate to complainant and part to the defendant. That bills of sale for the vessels were made, and that the other personal property of the firm was taken by the different partners, and that both the real and personal estate have since been held in severalty. It expressly denies the insanity or incapacity of the complainant at the time of the execution of the papers, and all fraud in the transaction.

The issue made by the pleadings is whether, at the time of the transaction sought to be avoided, the complainant was deprived of his right reason; whether he was of unsound mind, wholly incapable of the government of himself and the management of the affairs ; and whether the contract sought to be avoided was made with him while in that condition, fraudulently and without consideration. This is the case made by the bill and denied in the answer.

Upon this issue we think the complainant has signally failed in supporting his case. A number of witnesses do testify that in their opinion the complainant was incompetent for the transaction of business at and about the time of making the contract. It is, however, with few and slight exceptions, the mere expression of opinion, not founded upon any facts stated by the witness from which the court may judge of the soundness of the opinion expressed.

Now it is a well settled and most salutary rule, that upon a question of capacity the mere opinion of witnesses, if it bo evidence at all, is the lightest possible evidence. The rule has been long established and repeatedly recognized.

The few facts stated and relied upon by the witnesses, in support of their opinions, are mainly such as may be satisfactorily accounted for by the delirium of fever or the madness of temporary intoxication. And this appears to be the view of his situation entertained by his family physician. He declares that the complainant was a sensible man, when well, and as capable of transacting business as ordinary men. His fits were caused by excess. It is clearly shown that in 1828 the complainant had a severe attack of illness, from which time he was a less active, enterprising, business man than before; that he was a man of intemperate habits; that he was subject to occasional fits, arising from his habits of intoxication; that his mind was less vigorous than while his habits were correct. But all this does by no show that he was deprived of his right reason or incapable of managing his affairs and business.

If there were no evidence on the part of the defense, if the case stood upon the complainant’s evidence alone, there is not evidence, in my judgment, upon which any jury would be justified in depriving him of the management of himself and his affairs.

But if the evidence on the part of the defendant is considered, no doubt can remain upon the question of the defendant’s incompetency. It is shown, and not denied, that the making of the agreement and the execution of the contract extended through a period of at least five days, from the 2d to the 6th of July, inclusive. That on the 2d, the complainant went to the defendant’s house in relation to the contract, and left part of his title papers there. That on the 4th of July he accompanied the defendant to the office of Mr. Canfield, (a public officer) a Collector of the U. S. revenue for the District of Great Egg Harbor, who drew the bills of sale of the vessels, and certified their execution and the execution of the deeds of the real estate ; thence to the commissioner for taking the acknowledgment and proof of deeds, where the deeds were acknowledged. On the 6th of July other instruments dissolving the partnership and completing the transactions were executed in the complainant’s own house, in the presence of his family, and witnessed by a member of his family and a person in his employ. It is remarked, moreover, that on the 4th of July the defendant left his home in the presence of his family, with the knowledge of his wife, of persons in his employ, and several friends of the family then on a visit at his house. These circumstances would seem to show that at the time of the transaction ho could not have been a lunatic or of unsound mind, in the judgment of his family or friends, or of the public officers who wore cognizant of and participated in the transaction. It is further shown, on the part of the defendant, that during the year 1833 and during the very period when the hill alleges and the witnesses testify that the complainant was of unsound mind and incapable of managing his affairs, he attended to his ordinary affairs and business. He employed workmen, he superintended them, he discharged them, he settled with them; ho bought; he sold ; he erected houses. He did in fact all the business which his situation and business in life required him to attend to. Under such circumstances, to avoid solemn engagements on the ground of incapacity would be unwarranted and does not seem to he gravely insisted upon.

The case made by the evidence and relied upon in argument is that the partnership previously existing between the parties was dissolved in 1833, and that the partnership property was then divided between them. That the complainant was a man of weak mind, and that the partition was so unequal as, joined with the incapacity of complainant, to raise a presumption of fraud on the part of the defendant, and to require that the contract should he avoided.

Admitting the fact to be apparent that the division of the partnership property between the partners was unequal, is it competent for the court to give the relief asked for upon the frame of this hill ?

The bill charges the continued existence of a partnership, and it is silent as to any dissolution or partition of the property. It sets up utter insanity, and alleges that the deeds were fraudulently obtained without consideration. The answer shows that the deeds were executed upon a dissolution of partnership in 18E3, and pursuant to the terms of dissolution. It is now sought to avoid the deeds upon the ground that the inequality of the partition was so great as to raise a presumption of fraud on the part of the defendant. But this ground is not alluded to in the bill. It is a ground which the defendant has had no opportunity to answer, and upon which no testimony has been taken. Under such circumstances, can a decree proceed upon this ground 1 It is not a mere technical or formal objection; but it affects materially and directly the substantial rights of the defendant. By the well settled principle of a court of equity, the complainant is entitled to the defendant’s answer under oath to every material allegation of the bill. The defendant is equally entitled to the benefit of his answer upon eyery material point involved in the controversy. Now if this decree is sustained, it can be sustained only upon a ground upon which this defendant has had no opportunity of answering, or at least upon which he has never been called to answer. The bill, it must be remembered, charges that the partnership still existed; that no dissolution had taken place; that the deeds were utterly without consideration and while the defendant was deprived of his reason. The answer denies the insanity, avers that the partnership was dissolved, and that deed was executed pursuant to the terms of dissolution. Now this answer is pertinent, relevant and material. But would it have been either material or pertinent for the defendant by his answer to have gone further, set out the terms and conditions of the partnership and the equity of the dissolution 1 It would certainly have been justifying an act in no wise impeached, and might have created suspicion where none had existed. The radical objection to this decree upon the bill as framed is not that a total insanity is charged and a partial insanity proved, nor that a total want of consideration is charged and a partial one attempted to be shown. But the objection is, that the decree is made to rest upon a ground not alluded to in the bill, and upon which the defendant has had no opportunity of answering. Not only so, but it is a point upon which no testimony has been taken, and upon which, if the court act, they must-act upon conjecture or surmise, and not upon afullor complete view of the situation of the parties, and the mere justice and merits of the case.

Admitting for the sake of the argument that this partition between the partners was unequal, it does not follow that it was utterly inequitable or unjust as between themselves. Admitting the partnership to have been equal; that as to the world they were the equal owners of all the partnership property, as well as of the real and of the personal estate; if one of the partners have made large advances to the firm, he is to be paid before the partnership property .is divided. The partnership property is only the clear estate after all the debts of the firm arc paid. It is immaterial whether the debt is duo to a partner or a stranger. And if one of the partners is largely in advance to the firm, or if the firm is largely in debt, and one partner, upon the dissolution, assumes the debts of the firm, such partner must necessarily take the largest portion of the partnership property, or tho partition would neither be just nor equitable. Now it is unnecessary to assume that such circumstances did exist between these parties as to render an unequal partition of tho property equitable and just, or to rely upon tho improbabilities of each partner having advanced a dollar more than tho other. It is enough to say that the court knows nothing judicially on the subject, and are not in a position to decide tho question with safety or in accordance with the settled principle of equity. It is a question not raised by the bill, nor met by the answer, nor settled by the evidence. Upon this ground alone the party can not have the relief he seeks upon tho frame of the present bill.

This objection applies to tho form of the remedy. There is another objection fatal to the relief sought in whatever form the case may be presented.

The contract was made • and the instruments sought to be avoided were executed in July, 1833. (The bill was filed in December, 1845.) In January, 1834, the complainant recovered (according to his own statement) tho use of his reason. The bill was filed in December, 1845. During the period of nearly 12 years before the filing of the bill, the complainant was of sound mind. He had full knowledge of all the circumstances of the alleged fraud. There was no impediment, legal or otherwise to his seeking relief. He was not prevented by absence or poverty from maintaining his rights. Under such circumstances it should require the most cogent considerations to justify the delay and warrant a court of equity in lending its aid to the complainant. The delay of the complainant might operate as a greater fraud than any imputed to the defendant.

But the objection to the relief sought does not rest upon the mere lapse of time. The complainant not only acquiesced in the claim of the defendant, but he did numerous acts unequivocally affirming the validity of the transaction. He took possession of all the personal property which, upon the dissolution, was assigned to him, and converted it to his own use. Two years after the conveyance he placed his deed upon record. He held the land conveyed to him in severalty, and treated it as his own. He had it surveyed; he cut off the timber ; he erected buildings upon it; he received and appropriated the rents and profits ; he sold and conveyed in fee a part of the land with covenants of general warranty, and with a recital that his title was derived from the defendant. These acts extend through a series of years, while the defendant was in his right mind. His exclusive title to the property grew out of the very transaction which he now seeks to set aside as fraudulent. Sound policy, the dictates of common justice, no less than the firm principles of equity, forbid that a man should be permitted to repudiate a contract which he has thus repeatedly affirmed.

Nothing, says the Chancellor, can call a court of equity into activity but conscience, good faith and a reasonable diligence. It is not conscientious for a party to stand by and permit his adversary to make permanent improvements on property to which he claims title. It is not good faith for a party to repudiate a contract the benefits of which he has availed himself of, and which by repeated acts¿he has unequivocally affirmed. It is not reasonable diligenceTbr the party, when there is no disability and no impediments^» the[vindication of his rights, to lie passive for twelve years,Jand call upon a court of equity for its aid, •when the lapse of time and his own laches may have deprived his adversary of the means of defense.

The decree of the Chancellor must be reversed and the complainant’s bill dismissed with costs in the court below, but not in this court, and’ the record remitted to the Court of Chancery to be proceeded in accordingly.

In this opinion the whole court concurred. Decree reversed.


source: Caselaw Access Project

author: Green, C. J.

license: Public Domain

text:
    Executors of Samuel W. Hall, appellants, and Executors of Gershom Lambert, respondents.
    A mortgage was executed in blank, the sum which it was designed to secure not appearing either upon the mortgage or the registry; but the proviso thereof stated that it was to be void on the payment of (blank,) agreeably to the condition of a bond given by the mortgagor to the mortgagee, of even date with the mortgage, and payable at a day specified. The bond^contained the sum.

      Held, that the mortgage was good against a subsequent mortgagee.
    A gave to B a bond and a mortgage to secure the payment thereof; and subsequently gave to O a mortgage on the same land. Afterwards I), an uncle of A, paid, or handed to B, two several sums of money at two different times, taking loose receipts therefor on account of the said bond held by B., and afterwards a further sum as the balance in full on the said bond; and when the last of said sums was so paid or handed to B, the three sums were credited on the bond, the first two on account of the bond, and the last as the balance in full on the said bond; and D took no assignment of the said bond and mortgage given to B, or of either of them.

      Held, under the proofs of the case, that the said bond and morfgage, in the hands of D, were subsisting incumbrances as against the mortgage held by C.
    For the facts of the case, see ante, 410.

      P. D. Vroom for the appellants.

      J. H. Wakefield and Jl. Wurts for the respondents.
   The opinion of the court was delivered hy the Chief Justice.

Green, C. J.

The controversy in this cause is a question of priority between two mortgagees, each holding a mortgage upon, tho same premises.

The appellant’s mortgage is prior, both in date and registry, but several reasons are assigned why this priority has ceased to exist. It is insisted that it is not a valid mortgage, because it was executed in blank, and the sum which it was designed to secure does not appear either upon the .mortgage or registry. The mortgage is clearly a valid operative instrument as between the parties. The mortgage could not be prejudiced in a court of Equity by the accidental omission to insert in the mortgage the sum for which the bond was given. The mortgage is redeemable upon the payment of a sum of money agreeably to the condition of a bond given by the mortgagor to the mortgagee, of «ven date with the mortgage, and payable at a day spécifíed. There is no room for question as to the identity of the bond. The blank in the bond was filled. The amount for which the mortgage was given could readily be ascertained by recurrence to the bond. ■

It is unnecessary to decide what the effect of the registry of a mortgage in blank would be, as evidence of presumptive notice, because there is in this case indubitable proof of actual notice of the existence of the mortgage to the agent of Lambert, the subsequent mortgagee. He saw the record in the Clerk’s office, and was expressly informed of the amount which the mortgage was intended to secure. Nor can the question fairly arise as to the effect of a conflict respecting the amount of the mortgage between the actual notice and the presumptive notice by the registry. If the registry be available at all as a constructive notice, it can only be for the amount of the mortgage as it really exists. If -not notice of-this fact, it is not notice at all, and the case stands upon clear proof of actual notice of the real amount secured by the mortgage.

. The only remaining question is, whether the mortgage was paid and satisfied, or is still a subsisting encumbrance. The mortgage was originally given on the 1st of May, 1841, to Hugh B; Ely, administrator of John Wilson. It was the first mortgage on the premises, and was given to secure a part of the purchase money. The amount due on the mortgage was subsequently paid in three several payments, not by the mortgagor, but 'by Samuel W. Hall, the appellant. Receipts for these payments are indorsed on the bond; the first two payments purporting to be on account of the bond, and the last purporting to be the balance in full on the bond. The bond and mortgage were not assigned either by parol or in writing. But they were delivered uncanceled to Hall, who had made the payments, and have been retained by him uncanceled, as he insists for his security; the mortgage remaining uncancelled of record. There is no proof either of a request to-assign, or of an agreement to assign the bond and mortgage. • The parol proof amounts to this; that the amount due on the bond and mortgage was advanced by the appellant, at the request of the mortgagor who had made application to him for a loan of money for that purpose, and that the mortgagee who received the money, understood that it was the intention of the party paying the money not to extinguish the mortgage, but to stand in the place of the mortgagee.

In the present case there is no pretense of fraud attempted or meditated. The circumstances excluded all pretense of fraud. When Lambert’s mortgage was recorded, the prior mortgage of Hall was standing in full force, no payment had been made upon it. The payments were all made, not only after Lambert’s mortgage had been recorded, but at a time when the mortgagor’s property was heavily incumbered by judgments at law. It seems the obvious dictate of justice and equity, that where a third party advances his money in good faith, at the request and for the benefit of the mortgagor, in satisfaction of the mortgage debt, and holds the bond and mortgage in his possession uncanceled, he should be permitted to stand in the shoes of the mortgagee, and to have the protection of the mortgage security, although there be no assignment of the security, or even though the mortgagee should absolutely refuse to assign.

It has been the constant policy of a Court of Equity to treat the mortgage cither as canceled or outstanding, as shall best promote the ends of justice, and the actual and just intention of the parties. Starr v. Ellis. 6 John Chan. R. 395; Neville v. Demeritt, 1 Green’s Chan. R. 336.

I am of opinion that the mortgage executed by William Hall and wife to Hugh B. Ely, administrator of Wilson, and by him assigned to the appellant, is a yalid and subsisting lien and incumbrance upon the premises therein described, and is entitled to priority over the mortgage of the respondent*

The decree of the Chancellor should be reversed, and the record remitted to be proceeded in agreeably to law, and the opinion of this court.

In this opinion the court concurred, except Risley, Judge, who dissented.

Decree reversed.


text:
    Robert R. Freeman et al., appellants, and Peter Z. Elmendorf, respondent.
    This case is reported ante, page 415.

      F. B. Chetwood for the appellants.

      Blauvelt for the respondent.
   The opinion of the court was delivered by the Chief Justice.

Green, C. J.

1. The appeal is from an order of the Chancellor dissolving an injunction. The object of the injunction was to restrain the defendant from selling the real estate of the complainants, by virtue of an execution upon a judgment at law against Matthew F. Freeman, the father of one of the complainants, and the grandfather of the others. The case made by the bill is, that the land in question was conveyed by Freeman, the defendant in execution, to the complainants before the recovery of the judgment; that through the ignorance of the grantees the deeds were not recorded till after tine recovery of the judgment, but that the plaintiff in execution is charged with constructive notice of the conveyance.

2. That the judgment was originally a lien upon other real estate of Matthew F. Freeman, owned by him after the sale and conveyance to the complainants, and that upon principles of equity a party haying a lien on two parcels of real estate is bound to resort for satisfaction, first to that parcel the title to which remains in the debtor.

5. That the debt for which the judgment was recovered was secured by a mortgage given by John I. Gaston, as a collateral security for the payment of the debt. That the security of the mortgage was lost by the laches of the creditors, and that therefore he is not entitled in equity to enforce the payment, either against the original debtor, or to hold it as a lien upon property in the hands of his grantees.

The decisive answer to Ihe last ground of relief is, that Freeman, the defendant in execution, does not occupy the position of a surety. The debt was his own. The mortgage, though given by Gaston, was upon property held by him in trust for Freeman and his co-debtors. It was, in fact, a mortgage given by Freeman, through his trustee, upon his own land, to secure his own debt. The answer moreover is express and direct, that the mortgage security was not lost by the laches of the-creditors, but that it was not recorded at the instance and by the request of the mortgagor, the trustee and agent of the debtor.

In regard to the second ground of relief, to wit.: that the purchaser is entitled to have the other real estate levied on sold first, or to contribution from the owners of that land. It is a matter of serious doubt whether the principle affects the right of a judgment creditor. No such case was cited upon the argument, and in the short space allowed for examination I have found none. The bill is not framed at all with a view to that specie’s of relief.

These two grounds of equitable relief being disposed of, the ease made by the bill, and the case mainly relied upon in argument is, that the sheriff, upon an execution against Freeman, is about to sell the lands of the complainants, and a perpetual injunction is asked to restrain such sale. The questions involved in the controversy are, whether the deed from the defendant, or even to the complainant, was or was not fraudulent, and if it was not, then whether the defendant is chargeable with constructive notice of the deed. Both these are purely legal questions, and properly triable- in a court of law. If the legal title is in. the complainants, the sale by the sheriff will not prejudice their rights. The purchaser must resort to an action at law to recover possession, when the legal questions can be tried and decided. It was suggested with truth upon the argument, that permitting the sale to be made under the execution will subject the complainants to the necessity of paying the execution, or subject them to the hazard of having the land sacrificed to a purchaser willing to speculate upon the hazard of a lawsuit. It may be further suggested that if the purchaser should be unwilling to bring an ejectment, the effect of a sale would be to cast a cloud upon the title of the complainants.

But it is obvious that the same objections exist in every case where the sheriff, upon an execution against one, should attempt to sell land the title to which is claimed by another. And yet in such case equity ordinarily will not interfere, and for manifest reasons. In truth, a Court of Equity has no jurisdiction where the whole question involved is a question of legal title. If the sheriff is enjoined from selling under the execution, there is no mode in which the question of title could be tried at law. A Court of Equity must make the injunction perpetual and to that end must necessarily try and decide the legal title.

The order of the Chancellor must be affirmed.

Per tot cur. The order of the Chancellor was affirmed.


text:
    Executors of Margaret S. Rutgers, appellants, and Joseph Kingsland, respondent.
    This case is reported ante, page 178.

      A. C. M. Pennington and W. Pennington for the appellants.

      R. Van Arsdale and A. Whitehead for the respondents.
   The opinion of the court was delivered by the Chief Justice.

Green, C. J.

The court are of opinion,

1. That there is satisfactory evidence of a mistake in the description of the premises contained in the mortgage of September, 1836, from Brown to Pomeroy, and that the mortgagee or his assignee was entitled in equity to ¡have the mortgage reformed as against the mortgagor, or those claiming under him with notice.

2. That there is satisfactory evidence of notice to Charles Mix, the purchaser of Brown’s title at the master’s sale, and that as against him the complainant would be entitled to have the mortgage reformed.

3. That under the law of this State- the registry of a mortgage is notice only of what is contained in the registry, and that an erroneous mortgage duly registered cannot be reformed as against a judgment creditor without notice.

4. A majority of the court are of opinion that William Mix and Joseph Kingsland are judgment creditors without notice, and that as against them, or a purchaser claiming by virtue of their judgments, the mortgage cannot be reformed.

A large minority of the court are of opinion that the recitals in the deed from the master to Charles Mix and the proceedings in the cause by virtue of which that deed was executed are constructive notice, not only to Charles Mix, but to all persons claiming under him either as bona fide purchasers or judgment creditors; that consequently both the judgment creditors and the purchaser are affected with notice.

5. The court are further of opinion, that after a decree of foreclosure and sale of the mortgaged premises as actually described, the mortgage cannot be reformed and a sale made of an additinal quantity of land alleged to have been omitted in the descrip» iion contained in the mortgage. And inasmuch as it appears by the admission of counsel, that the premises sold under the original decree have been conveyed by the sheriff to the complainant, and by the complainant to a third party, the original decree of foreclosure cannot be opened, nor can the complainant have the relief prayed for In her bill. And upon this ground the court are of opinion that the decree of the Chancellor must be affirmed, with costs.

In this opinion Carpenter, Randolph and Ogden, Justices, and liisley. Porter, Wills, Schenck and Cornelison, Judges, concurred.

Nevius, Justice, and Valentine, Judge, dissented.

Decree affirmed.


author: Magie, Chancellor.

text:
    Charles P. Moore v. Charles B. Durnan et al.
    [Decided November 6th, 1905.]
    1.-Where a decree directed that, on complainant tendering to defendants a certain bond to indemnify defendants from any liability on a lost check, defendants should pay complainant $450 and taxed costs, the decree required payment only after tender of the security, and therefore aid not carry interest until after that date.
    2. Where a decree directed payment of a lost check on complainant tendering to “two defendants” a certain bond, a bond given to only one uf the defendants was not a compliance with the decree.
    On motion to set aside execution.

      Mr. Marlin P. Devlin, for the motion.

      Ms. William J. Baclces, contra.

   Magie, Chancellor.

The bill in this cause was for the enforcement of a lost check for $450. On March 8th, 1902, a decree directed that upon complainant’s tendering to the two defendants a bond for $500, with sureties, ffic., to indemnify defendants against any liability upon the check, defendants should pay to complainant $450 and the taxed costs, and in default of payment that the complainant should have execution for said debt and costs.

On October 5th, 1905, complainant issued execution in the cause for $450, with interest thereon, calculated from the date of the decree.

A motion is now pending to set aside the execution, the defendants claiming that it is excessive in including-interest to a greater amount than the decree justifies.

It is conceded that no bond, with securities, for indemnifying the defendants, was tendered until September 25th, 1905. Defendants insist that no interest can be exacted from them except from that date.

If the decree had required an immediate payment of the amount, it would doubtless have had the effect of a judgment at law and carried interest thereon from its date. Chancery act of 1902 p. 524 § 44; Wilson v. Marsh, 13 N. J. Eq. (2 Beas.) 289. But the decree required 'payment, not immediately, but only after the tender of security to indemnify, and until that had been done defendants could not be compelled to pay. Considering that indemnity was deemed necessaiy, it may be said that they could not safely pay.

It follows, in my judgment, that the decree.did not justify the execution for interest, except for so much as accrued after the tender of the required indemnity. I have not been referred to any authorities on this subject, and I have found no case myself, except Bushnan v. Morgan, 5 Sim. 635, which seems in point, though the English decisions of that period on the subject of interest sustain doctrines which are not now admitted.

Among the papers submitted on this motion is a bond, which I presume was that which was tendered. If so, it does not conform to the terms of the decree, for it is given to only one of the defendants.

Upon the ground first mentioned, however, viz., that the ' execution is for an excessive amount, I think the motion must prevail.


author: Magee, Chancellor.

text:
    Charles R. Myers v. Samuel M. Fridenberg et al.
    [Argued October 17th, 1905.
    Decided December 19th, 1905.]
    1. The bill demurred to seeks a decree requiring defendants to transfer to complainant certain shares of stock, which he had transferred and delivered to them in a transaction, claimed to be unlawful under the provisions of the “Act to prevent gaming.” $ Gen. Stat. p. 1606.

    2. The bill was not filed until after the lapse of six months from the time of the delivery of the shares to the defendants.—Held, that the bill cannot be maintained for any relief under the provisions of section 5 of that act.
    3. It is claimed that the bill can be maintained for relief under the provisions of section 2 of that act, and that thére is no limitation to actions upon that section. Without considering or deciding upon this claim—■ Held, that the bill discloses that complainant has a complete remedy at law, and shows no ground for equitable relief.
    Ob demurrer to bill.

      Mr. Joseph II. Gaskill, for the demurrant.

      Mr. Clarence L. Cole, contra.

   Magee, Chancellor.

The prayer of the bill is that the defendants be enjoined from selling or disposing of certain shares of stock, or from collecting any dividends thereon, and that they may be decreed to transfer and assign the said shares to the complainant.

The bill states that the complainant engaged with the defendants in a stock speculation upon margins, with no intent to accept stocks bought or deliver stocks sold, but only to gain or lose by the rise and fall of the market, which transactions, it is claimed, are unlawful under the provisions of the first section of the “Act to prevent gaming,” approved March 27th, 1874. 2 Gen. Stat. p. 1606; Flagg v. Baldwin, 38 N. J. Eq. (11. Stew.) 219; Van Pell v. Schauble, 68 N. J. Law (39 Vr.) 638.

The bill further states that in October, November and December,' 1902, upon defendants making demand upon complainant for'additional payments to secure his account, complainant delivered to defendants the shares of stock in question, as security and “to make good his marginal account” with the defendants, and that they have had said shares of stock transferred to their names on the books of the respective companies, and have procured certificates thereof in their own names, and that afterward, and about February, 1905, defendants gave notice to complainant that- unless he paid them a balance claimed to appear by the account, viz., $19,936.71, with interest, they would sell the said stocks which they had thus acquired.

It was admitted in the argumént of the demurrer to the bill that any right which the complainant has or may assert in this proceeding is founded upon the act to prevent gaming, above cited.

If the right claimed by the complainant arises under the fifth section of that act, the bill discloses that the complainant’s right has been lost by the lapse of six calendar months after the delivery of the stocks, the bringing of such a suit within that period of time being a condition expressed in the proviso to that section. Where it clearly appears on the face of the bill that the complainant’s right of action is barred by the statute of limitations, advantage of the statute may be taken by demurrer. Partridge v. Wells, 30 N. J. Eq. (S Stew.) 176; S. C., 31 N. J. Eq. (4. Stew.) 362; Bird’s Administrator v. Inslee’s Executors, 23 N. J. Eq. (8 C. E. Gr.) 363; Gutch v. Fosdick, 48 N. J. Eq. (3 Dick.) 353. A like rule must apply upon this demurrer. The bill discloses on its face that complainant has no right of action upon the fifth section of the Gaming act.

But an action is also given by the second section of the Gaming act, and there is no expressed limitation of the time within which such action may be brought. It is contended that the proviso to section 5, limiting actions,- is equally applicable to the action provided for by section 2. I deem it unnecessary to determine whether this contention can prevail; for, assuming that this bill is founded upon a cause of action such as is given by section 2, and that the lapse of time has not barred the complainant, I think that the bill exhibits complainant’s claim as one for which he has a complete remedy at law. The shares of stock which he seeks to obtain have been converted by the defendants. If the transaction in which the shares were delivered to the defendants was a gambling transaction, made unlawful by statute, an action of trover and conversion will give the complainant ample redress. Van Pelt v. Schauble, ubi supra. There is nothing disclosed in the statements of the bill, or in the nature of the transaction,, to indicate any particular equity which would require the intervention of this court.

The demurrer must therefore be sustained.


author: Mache, Chancellor.

text:
    John S. McMaster, receiver, v. Charles H. Drew et al.
    [Argued October 31st, 1905.
    Decided January 2d, 1906.]
    1. Where a petition by the receiver of an insolvent corporation showed that certain shares of stock of the corporation had been ’issued by it in payment for property conveyed to it, which conveyance was thereafter judicially declared void, so that the consideration for the shares of stock issued in payment wholly failed, and that the shares had been transferred to various persons, it was within the court’s discretion to grant leave to file a bill in behalf of the parties interested to, determine the rights of such stockholders.
    ■2. A bill by the receiver of an insolvent corporation to determine who the stockholders are need not disclose whether the assets the receiver has reached, or maj7 reach, are sufficient to satisfy the creditors.
    3. On demurrer to a bill by the receiver of an insolvent .corporation to determine who the stockholders of such corporation are, the court will not consider whether, by the proceedings in the original cause, it has been made to appear that there are no assets sufficient to satisfy creditors.
    On demurrer to bill.

      Mr. Charles D. Thompson, for the demurrants.

      Mr: Normww Grey, for the complainant.
   Mache, Chancellor.

The bill in this cause asserts that in a cause in this' court wherein the Denver City Water Works Company was 'complainant and the American Water Works Company was defendant, the last-named company was decreed to be insolvent, on the 20th day of July, 1892, and that by subsequent proceedings John S. McMaster was appointed its receiver.

It further asserts that upon a petition of the complainant in said cause an order was made, on July 12th, 1904, permitting the receiver to file the bill now before me, upon his being furnished security to protect him and the fund from the costs and expenses of the suit.

The receiver thereafter filed the bill, and on the 3d day of October, 1905, an order to show cause why a preliminary injunction should not issue was made. Defendant’s counsel appeared in .opposition to the allowance of the injunction, and also moved that an order be made requiring the receiver to show cause why the order permitting him to- file the bill should not be set aside. The motion was denied and the preliminary injunction was allowed.

The- petition on which leave to-. file the bill was granted showed that certain shares of stock of the insolvent corporation had been issued by it in payment for property conveyed-to- it, and that .afterward a competent-court had decreed that the conveyance of the property was absolutely void and of no effect, so that the consideration for the shares of stock issued in payment therefor had -wholly~failed. •• -It-was-also made to appear that the shares had been transferred by the company by which the conveyance had been made, and to which the shares had been issued, to various persons. Under those circumstances, leave to file the bill was asked in behalf of parties interested to determine the rights of such stockholders. It does not admit of doubt that such a bill could have been filed by the eorpo-ra-t-ion, but for the fact that- it had become insolvent. By reason . of its insolvency, no proceeding involving this matter could be taken -by anyone except the receiver, and by him only by leave of the court. I judged that it was proper to allow the receiver to act, although I required security to be given to pro-tept him and the fund.

The propriety of the course adopted his again been challenged upon this argument, and I have reviewed the question.

I remain convinced that the order for leave to file the bill was within-the discretion of the court.

The bill filed by the receiver exhibits the same state of -facts, and its prayer is for the return to him of the shares of stock, the consideration for which has wholly failed. This involves the same question presented by the petition for leave to file the bill.

The receiver of an insolvent corporation holds its property and franchises for the benefit of the creditors, and if a surplus, after satisfying the creditors and the expenses of the receivership, remains, then for the benefit of the stockholders. He may therefore seek to find out who are the stockholders to whom he may eventually be liable. It is not necessary that his bill seeking to have determined who the stockholders are should disclose whether the assets he has reached, or may reach, are sufficient or insufficient to satisfy the creditors, nor can it be considered, upon a demurrer to the bill, whether, by the proceedings in the original cause, it has been made to appear that there are no assets sufficient to satisfy creditors.

■ The demurrer to the bill must therefore be overruled.


text:
    Margaretha Schmidt v. Frederick Eitel et al.
    [Submitted October 25th, 1905.
    Decided January 2d, 1906.]
    The bill stated that the complainant had in her hands a specific sum of money due to Eitel, one of the defendants, upon a written contract for the erection of a house, and that the other defendants had served on the complainant “lien claim notices.” The prayer was for a decree that the defendants should interplead, and that complainant, on paying into court the sum she admitted to be due, should be discharged from all liability to defendants.- - On demurrer—Held, that the bill was defective in that it did not show that the written contract had been filed, so as to- protect the land from liens under the Mechanics’ Lien act.
    On demurrer to bill.

      Mr. Frank Benjamin, for the demurrants.

      Mr. John P. Manning, for the complainant.
   Magie, Chancellor.

The bill demurred to appears to be one of strict interpleadei. The relief it seeks is founded on the - statements that complainant made a written contract with Eitel, one of the defendants, for the erection of a house upon her- lands, for $2,685, and that Eitel has been paid by her $2,285, and there is now due him on the contract $280.56; and that the Empire Sash and Door Company, James Huggan and Erank J. Brohm and Ered Buhl (also made defendants), have at specified times served on complainant what the bill calls “lien claim notices,” to the effect that Eitel was indebted to them, respectively, for materials furnished and used in the erection of the building, and that each of these defendants claims a prior lien on the funds in complainant’s hands, which she is ready and willing to pay to any person lawfully entitled to receive them.

The prayer is that defendants may interplead, and that complainant, on paying into court the amount she asserts to be due, may be discharged from any liability to the defendants. Eitel, the alleged contractor, and Brohm and Buhl, alleged claimant's upon the fund, have severally demurred to the bill.

It is first claimed, by both demurrants, that the bill is defective because it fails to show that the contract which complainant avers she made with Eitel was filed in the clerk’s office of the county in which the lands were, so as to protect complainant’s lands from the lien claims under the first and second sections of the Mechanics’ Lien law of 1898. P. L. '1808 p. 688. If in fact the contract was not filed, obviously, upon the statements of the bill, each one of these defendants may file his lien upon the house and lands of complainant, and enforce thát Hen by the proceeding provided for by the Mechanics’ Lien law. The lien claimants are entitled, in that proceeding, to recover the full amount of their respective claims which are proved. They cannot be restricted to the amount due to the contractor on a contract not filed; under section 2. When the contract is filed, workmen and materialmen are provided with a means to enforce their claims upon moneys due the contractor by the provisions of section 3. But to- entitle complainant to limit the claims of workmen and materialmen to funds in her hands, and to seek relief of that character, she should have averred that the contract she made with Eitel had been duly filed.

On this ground the demurrer must be sustained.

This result- renders it unnecessary to consider other causes also assigned upon the-demurrer.


text:
    Anna M. Dilts et al. v. Elizabeth Clayhaunce et al.
    [Decided January 16th, 1906.]
    A devise of real estate to a widow for life and to a stepson in fee, is followed by a direction that if the stepson should die without issue the same should be divided among testator’s brothers and sisters, with a provision that if any brother or sister should die, leaving children, his or her share should go to the children.—Held, (1) that upon the happening of the contingenpy the estate of the stepson was devested ;• (2) that by the direction to divide, the persons indicated as intended by testator to share his bounty are any brothers or sisters then surviving, the children of any brother or sister who had died-leaving- children, and the grantee, devisee or heir-at'-law of any brother or sister. who had died leaving no child; '(3) the interest of children substituted for parents, under the direction, is transmissible to their heirs-at-law.
    On motion to confirm master’s report in partition.

      Mr. Richard 8. Euhl, for the complainants.

      Mr. John L. Connet, for some defendants.

      Mr. Willard 8. Parlcer, for other defendants, in opposition to confirmation.
   Magie, Chancellor.

The bill in this cause was filed for the partition of lands, in the county of Hunterdon, which formerly belonged to one Asa Moore. By his will, dated April 21st, 1858, and probated in Hunterdon county on the 4th day of May, 1858, the following residuary disposition' of his estate (including the lands which are the subject of this suit) was made:

“4. I give and bequeath to my beloved wife, Permelia, the residue of my estate,,both real and personal, whatsoever and wheresoever, during her natural life, and at her decease to go to my stepson, Daniel B. .Ege, his heirs and assigns.
“5. It is my will that in case my stepson, Daniel B. Ege, should'decease without lawful issue, that my property, both real and personal, be equally divided between my brothers and sisters, and in case of the decease of either or any of them their several portions shall descend to their children.” . ••

It appears by the proofs returned by the master to whom the matter was referred that the wife of the testator survived him, and died in possession of the lands about 1873, and Ege then went into possession, and continued in possession until his death, which occurred on the 19th of April, 1904. He had been married, but his wife had died before him, and he died without leaving issue. The bill seeking partition of the land has made parties many of the persons who, on any construction of the will, can claim an interest, and the master to whom it was referred to determine and report who of them had an interest has made a report, which the complainants now move to confirm. The defendants, or some of them, object to the confirmation of the master’s report, on the ground that he has erred in his construction of the clauses of the will above quoted, and in his determination of the parties who now have an interest in the lands in question, and of the proportion of their respective interests.

It would have been better practice, perhaps, to have presented these questions by exceptions to the master’s report, but no objection, was made to their being considered on a motion to confirm. As they have been fully presented and argued, I have considered them.

The facts disclosed by the proofs returned by the master, Avhich must be taken into account in determining these questions, are the following: When Asa Moore died he left ten brothers and sisters surviving him. Of these, only one survived Ege. That survivor Avas a sister, who has since died, leaving a husband and a son, her only heir-at-laAV. They are parties to the suit. Three of the surviving brothers and sisters died, leaving no children. Tavo others had children, Avho died previous to the death of Ege, leaving children. One other had children, Avho survived Ege, and also grandchildren, children of a child who died before Ege. One of those who died without children had assigned his interest in the lands, during his lifetime, to one of his brothers.

The division reported by the master is into five shares. One share he reports as belonging to the son and heir-at-law of the sister Avho sumved Ege, subject to the curtesy of his father. One share he reports as belonging to the complainant and . one of the defendants, in common, as children of a deceased sister. One share he reports to belong to three defendants, in common, as the children of a deceased brother. And one share he reports to belong, in common, to five children of another deceased brother, excluding the children of a daughter of that brother, who had predeceased Ege. The remaining, or fifth share, he reported to belong to a daughter of another deceased sister.

The theory on -which the master has proceeded in his report as to ownership is that, upon the true construction of the will, there Avas no interest vested in Asa Moore’s brothers and sisters at his death, and that none was acquired by any of them until the death of Ege; that upon the death of Ege, without leaving issue, the estate vested in the sister who then survived, and the children of such of the brothers and sisters as had then died leaving children who survived Ege—such children, if more than one, taking the shares their respective ancestors would have taken if living. He therefore ignores the three brothers and sisters of testator who died leaving no children. He pronounces against any claim of the grandchildren of one who died leaving a child, who died a feAV months before Ege, leaving two children. He pronounces against the children of a daughter of one of the brothers, which daughter died during the lifetime of Ege, and, as before stated, he excludes from any share, along with the five children of one of the brothers, the children of a previously deceased child of that brother. He also pronounces against the assignment of one share, and holds it wholly invalid.

Upon taking up for consideration tire testamentary provision which is to be construed, there are two things which are obvious and not open to question.

In the first place, it is clear that the stepson of testator, Daniel B. Ege, acquired, by devise, a vested estate in fee-simple, subject, however, to be devested upon the happening of the contingency prescribed, viz., death without lawful issue.

In the second place, it is clear that the testator prescribed that, upon the happening of the contingency named, the estate of Ege in his lands should be devested, and thereafter vest in other persons. It is true there are no words of express devise sto those 'persons, but the testator directs his property, both real and personal, -to be divided among certain persons, and that form of testamentary direction . is equivalent to a devise. Denise’s Executors v. Denise, 37 N. J. Eq. (10 Stew.) 163; Howell v. Gifford, 64 H. J. Eq. (19 Dick.) 180; Outcalt v. Outcalt, 42 N. J. Eq. (15 Stew.) 500; Buzby v. Roberts, 53 N. J. Eq. (8 Dick.) 566; Seddel v. Wills, 20 N. J. Law (Spenc.) 223.

It is also* clear that the estate intended to vest in such persons, upon the happening of the contingency’' of Ege’s death without issue, was not a contingent remainder, but a provision in their favor, of the nature of an executory devise, of the kind described by Mr. Eearne as occurring when an estate is limited by devise after a preceding vested fee-simple. Fearne Dev. 17; 6 Greenl. Cru. Dig., chap. XVII., p. 444; Den v. Allaire, 20 N. J. Law (Spenc.) 6; Den v. Snitcher, 14 N. J. Law (2 Gr.) 53; Armstrong v. Kent, 21 N. J. Law (1 Zab.) 509; Seddel v. Wills, 20 N. J. Law (Spenc.) 223; Groves v. Cox, 40 N. J. Law (11 Vr.) 40; Wilson v. Wilson, 46 N. J. Eq. (1 Dick.) 321; Brooks v. Kip, 54 N. J. Eq. (9 Dick.) 462; S. C., 55 N. J. Eq. (10 Dick.) 590; Steward v. Knight, 62 N. J. Eq. (17 Dick.) 232.

These constructions of the testamentary clause in question wore conceded to be correct in the argument. The contest made is as to the persons in whom testator intended his estate should vest upon the happening of the contingency whereby Ege’s title was to be devested. If the clause in question directed the division of the property at the death of Ege, without issue, among testator’s brothers and sisters, and omitted the provision for the children of a deceased brother or sister,' I apprehend there could be no doubt of the nature of the interest acquired by each brother or sister at the death of Asa Moore. While their interest was not of the nature of a contingent remainder, but only a devise executory in its character, yet the interest thus acquired is one said to be transmissible by grant, devisable by will or descendible to heirs-at-law. Fearne Dev. 529; 6 Greenl. Cru. Dig., chap. XX., p. 512; Chauney v. Graydon, 2 Atk. 616; King v. Withers, Cas. t. Talb. 117-123; Tuttle v. Woolworth, 62 N. J. Eq. (17 Dick.) 532; Thornton v. Roberts, 30 N. J. Eq. (3 Stew.) 473; Brooks v. Kip, ubi supra; VanDyke v. Vanderpool, , 14 N. J. Eq. (1 McCart.) 198.

If, on the other hand, the clause expressly, or by implication, evinces testator’s intent to limit his bounty to brothers and sisters who might survive Ege, and to the children of such as had then died leaving children, no possible doubt could be raised.

The difficulty arises from the fact that by the first part of the clause testator, by unmistakable language, discloses an intent to benefit all his brothers and sisters in case of the happening of the prescribed contingency. There is no express limitation to those of them who should survive Ege. Is such a limitation to be implied because of the direction that if any brother or sister should die, leaving children, his or her share should descend to the children? As such a construction results in excluding from the bounty, which testator first declared should extend to all his brothers and sisters, each one who died before Ege leaving no children, it ought not to be adopted unless the whole clause is incapable of a reasonable interpretation which will preserve the primary and the secondary objects of testator’s bounty.

The master adopted the view that the direction for the substitution of children for deceased parents requires an implication that testator intended to limit his bounty to the brothers and sisters who should survive Ege, and the children, then living, of such as had died. Upon the argument this view struck me favorably, but upon mature consideration I am unable to adopt it. In my judgment, a reasonable interpretation of the language can be made without excluding from testator’s bounty any of his brothers or sisters.

Giving to every word of the clause in question its full force, it may be thus paraphrased, viz.: Upon the happening of the contingency I have prescribed, my property, of all kinds, shall go to my brothers and sisters equally, and if any have died leaving children, their share shall go to their children; but if any have died leaving no children, their share shall go to their heirs-at-law or next of kin, according to the nature of the property.

This construction, in my judgment, gives a reasonable meaning to the whole clause, and avoids an implication which is contradictory to the expressed intent to benefit all testator’s brothers and sisters.

Upon this construction, it is obvious that the report of the master cannot be confirmed; for it is clear that the brother who transferred his interest passed a title thereto to come into possession upon the happening of the contingency, provided that before that time he had not died leaving a child or children. As he died without leaving a child, his transfer was effective. It is also obvious that those brothers and sisters who died without children transmitted their interest in their shares to their heirs-at-law or next of kin, to become vested in possession upon the happening of the contingency.

There remains to be considered the meaning of the clause respecting the portions of testator’s brothers and sisters which thereby vested in their children upon their death.

In its primary sense, the word “children” expresses the relation of parent and child, and is not extended to the more distant relations of grandchildren or descendants. When used in a will it is, prima facie, to have its natural and primary meaning attributed to it, but a more extended meaning may be given to it in two classes of cases—one where the more extensive meaning will prevent the testamentary disposition from being inoperative and the other where the language of the will indicates that the testator'used the word in the more extensive signification. Steward v. Knight, 62 N. J. Eq. (17 Dick.) 232.

Eeading the whole'clause, I strongly incline to the view that it indicates an intent on the part of testator to use the word “children” with a wider significance than exists in its primary meaning. The language of the testator is that the share of a brother or sister should descend to his children. This seems to disclose an intent to confer upon such children a descendible interest, which will not be lost by their death, but will be transferred, as to real property, to their heirs-at-law.

But if the testator’s intent to vest in the children of a deceased brother or sister the'share intended for that brother or sister is limited by its own terms to the actual children, yet upon the construction previously given to this clause the child or children of a deceased brother or sister would become invested with the interest of the parent in the property, which interest was transmissible, devisable and descendible, and therefore descended to their heirs-at-law upon their death. It results, therefore, that the master erred in excluding from the division the children of a deceased child, who were heirs-at-law of the deceased child.

The matter will be referred to the same master to make a report of the interest of the parties upon the construction of the will above indicated. If other parties are necessary, application for leave to amend may be made.

The motion to confirm will be denied.