text:
    Joseph Tate v. Frank S. Field et al.
    [Filed May 3d, 1897.]
    1. Where there is a distinct charge in the bill of a matter within the personal knowledge of the defendants, and they are asked to answer, a failure to answer a distinct charge within their knowledge is an admission of the truth of the allegation.
    2. Equity, having jurisdiction of a bill for foreclosure, may award damages for waste committed by purchasers from the mortgagor, whereby the security was rendered inadequate.
    Heard on bill, answer and proofs.
    The bill is in the ordinary form to foreclose a purchase-money mortgage given by the Powerville Felt Roofing Company (Limited) to the complainant, Tate, as part consideration of lands conveyed by Tate to the company. It is dated the 25th of April, 1891, and covers five lots of land lying in a body, situate near Chatham, in the county of Morris, conditioned for the payment of $800 in three years, with interest, with a special proviso that the mortgagor should erect upon the lands, within ninety days, a building of the value of at least $500. The bill shows that the corporation mortgagor erected a building upon the premises worth at least $500, and afterwards went into the hands of a receiver, and that the premises were sold by the receiver in the month of July, 1894, subject to the mortgage to one Garret Smith, who purchased and held them in trust for the three defendants, Field, Haynes and White, composing the firm of F. S. Field & Company.
    The bill further charges that between the time of the purchase by Smith for Field & Company and the last day of the year 1894, the defendants — Smith, Field, Haynes and White — combining to defraud the complainant,
    “ took or tore down and removed from the said mortgaged premises the said building so as aforesaid erected thereupon in accordance with the terms and conditions of the said bond and mortgage, and carried or removed the same to-the premises of the said Field, Haynes & White, in or near Boonton, in the county of Morris, and re-erected the said building thereupon.”
    The bill then charges that the lands without the building are-not worth the amount of the mortgage; and, besides the ordinary prayer for foreclosure and sale, prays that Smith, Field, Haynes and White may be ordered and decreed to return and restore the building to the mortgaged premises, or to pay to the-complainant the value of the said building at the time of its removal, or to pay to complainant any and all deficiency that may arise upon the sale of the mortgaged premises in the principal, interest and costs due upon the mortgage.
    The defendants last named are apparently non-residents, having been brought in by publication, and have joined in an answer, in which it is admitted that Smith purchased the premises on behalf of Field, Haynes and White. With regard to the charge that they removed the building from the premises, they answer in this wise:
    “ These defendants, further answering, say that there was subsequently removed from the mortgaged premises a building which had been erected thereon by the Powerville Felt Roofing Company, which building stood upon posts driven in the ground, and was otherwise unattached to the mortgaged premises, and so built that it could be removed without injury to the mortgaged premises. And these defendants deny that Garret Smith removed the said building or had any knowledge of the removal thereof until he was informed thereof by the complainant; and this defendant, Frank S. Field, for himself answering, says that he was present at the removal of the said building, and supposed at the time he had a perfect right to remove the same, and still insists-that the building was rightly removed.”

      They further deny, by their answer, that the building was part and parcel of the mortgaged premises, and deny that the removal of the same injured the security of the complainant’s mortgage deny the insufficiency of the premises, and that the removal of the building was a fraud. They then, by their answer, set up that the remedy of the complainant is by an action at law, and that no decree can be made in this court against defendants or either of them in that behalf.

      Mr. Samuel J. MacDonald, for the complainant.

      Mr. Francis J. Swayze, for the defendants.
   Pitney, V. C.

No proof was offered by complainant at the hearing of the actual removal of the building by either of the defendants. He relied in that behalf entirely upon the allegation of the bill and the failure to deny by Field, Haynes and White that they removed it.

Defendants contend that the failure to deny and the partial admission by Field is not sufficient to sustain the issue in this respect. But I think there is no issue. There is a distinct charge in the bill of a matter within the personal knowledge of the defendants, and they are asked to answer; and in such case a failure to answer a distinct charge within the knowledge of defendants is an admission of the truth of the allegation. Besides, the peculiar language in which Mr. Field’s statement is couched, namely, “that he was present at the removal of the said building and supposed at the time he had a perfect right to remove the same,” amounts to an implied admission on his part of its removal.

The point that the removal of the building was justifiable as against complainant was not seriously pressed.

The principal question litigated was the right of the complainant to relief in this court for the waste committed by the defendants. Complainant contends that the court, having acquired jurisdiction of the cause for the purpose of the foreclosure of a mortgage in which the question whether the premises without the building are sufficient to secure the amount due the complainant will be necessarily determined in the orderly course of the suit by a sale of the premises, should proceed and give complete relief by holding the defendants who have committed the waste liable in this suit to make up the loss to the complainant to an extent not exceeding the deficiency to arise from the sale of the premises, and also not exceeding the value of the building removed.

The defendants deny the jurisdiction of the court in this behalf, and contend that under the cases of Jackson v. Turrell, 10 Vr. 329, and Schalk v. Kingsley, 13 Vr. 32, the complainant has complete remedy at law, and this court should not entertain jurisdiction.

The general rule undoubtedly is that this court will not, under ordinary circumstances, entertain a pure bill for an account of waste in behalf of a person who would be entitled to an action at law for damages on that account. But it is equally true that where this court has acquired jurisdiction of a cause for any purpose in which a matter of waste is incidentally involved, it will, in general, proceed to ascertain the amount of the waste-if necessary in order to do complete justice.

The usual mode of acquiring jurisdiction in suits involving waste is by an application for an injunction to stay waste, and in such case, when, the injunction has been granted and the-waste stayed, the court will, as an incident to the relief and for the purpose of preventing multiplicity of suits, take an account of the waste in that suit. And such are the authorities cited by the defendants, the leading one being Jesus College v. Bloome, 3 Atk. 262. The cases are collected in the note to the famous case of Garth v. Cotton, imperfectly reported in 1 Ves. 524, 1 Dick. 183, and 3 Atk. 751, but reported fully in 1 Lead. Cas. Eq. *697. Lord Hardwicke, who refused jurisdiction in Jesus College v. Bloome, assumed it in Garth v. Cotton. The latter was a case where the complainant could not maintain an action at law,, but he therein discussed Jesus College v. Bloome, and states the ground upon which it was decided.

In Whitfield v. Bewit, 2 P. Wms. 240, an account was allowed of timber cut as a mere incident to a bill for discovery; there was, however, an injunction against opening mines. And see 2 Waterm. Eden Inj. *244, *249, and Lee v. Alston, 1 Bro. Ch. C. *195.

I have said that the usual mode of acquiring jurisdiction in such a case is the filing of a bill for an injunction, but I am unable to perceive that there is any peculiarity in a bill for an injunction by which an account of the waste committed is justified rather than by any other ground of jurisdiction. The question is, has the court jurisdiction independent of the mere act of waste, and if so, then arises the question whether it is necessary or convenient for finally and completely disposing of the subject-matter of the suit that the question of the amount of the waste should be dealt with. This is the view of the learned author of the American notes to the Leading Cases in Equity. At p. 1024 (4th Am. ed.) 1 Lead. Cas. Eq., after quoting Chancellor Walworth, in Winship v. Pitts, 3 Paige 259 (at p. 261), where he says: “This court only interferes to prevent future waste, except in cases where the complainant has no remedy at law, or a discovery is necessary, or where there is some other ground for equitable interference. In ordinary cases, the account for waste already committed is merely incidental to the relief by injunction against future waste, and is directed upon the principle of preventing a needless multiplication of suits,” the author proceeds: “ The rule, however, is general that, although the recovery of damages for waste is not a substantive ground for a bill in equity, yet if the court has jurisdiction of the subject upon another ground it will decree an account of the waste committed.” And here he instances the case of waste by one tenant in common, where an account is taken of the waste in partition between the parties, and cites Backler v. Farrow, 2 Hill Ch. 111.

Vice-Chancellor Bird, in Jackson v. Beach, 3 Atl. Rep. 375, holds that the power of the court of chancery to take notice of waste by one co-tenant against the other and to give a remedy on a bill for partition, is not derived from section 15 of the act respecting partition, but inheres in the court, independent of that act. That was a case of partition, and he says: “This court, having jurisdiction of the principal question, would not send a party entitled to relief to the law courts. Its purpose is to avoid a multiplicity of suits.”

In the case in hand, the right of the complainant to come into this court for equitable relief upon his mortgage is undoubted, and his right to recover against the defendants for waste, in an action at law, is limited to the amount which his security will be diminished by the waste. That amount can only be ascertained satisfactorily by a sale of the premises under foreclosure. The difficulty of ascertaining it in an action at law was clearly manifested in the opinion of Mr. Justice Van Syckel, in Schalk v. Kingsley, supra. So that one of the material matters to be determined in an action at law will necessarily be determined here in this suit. Now, it seems to me it would be an unjustifiable limitation upon the duty of this court to do complete justice, to say that it should not proceed to ascertain the extent of the waste in this case, if practicable. In this connection it must be remembered that the case is not precisely within Jackson v. Terrell and Schalk v. Kingsley, supra. In those cases the actions were brought against persons not in possession or claiming to be the owners of the premises. Here, the persons committing the waste were the owners of the premises, and were either in possession or entitled to be in possession, so that it cannot be said that it has been decided by those cases that an action would lie against them by the mortgagee. Then, again, apparently, they are non-residents of this state and the complainant would be obliged to sue them in a foreign state and prove his case by witnesses in this state.

I will advise a decree for the foreclosure and immediate sale of the premises, reserving the ascertainment of the amount of the injury due to the waste until after the premises have been sold and the deficiency, if any, ascertained.


source: Caselaw Access Project

author: Pitney, V. C.

license: Public Domain

text:
    P. Sanford Ross et al. v. The American Employers’ Liability Insurance Company, an insolvent corporation.
    [Filed July 6th, 1897.]
    1. Under policies issued to employers and railroad companies, insuring them against damages with which they might be “legally charged” by reason of accident to employes, or to persons or property while being transported, the liability of the insurer arose on the happening of the injury, .and not at the time judgment was recovered against the insured for such injury.
    2. Policies issued to employers and railroad companies, insuring them against accidents to employes and to persons and property transported, provided that, if legal proceedings were taken against the insured to enforce a claim for damages, the insurance company should have the conduct and control of defending against the same, with the right to compromise and take appeals, the company assuming all costs and expenses. — Held, that under such contract, and independent of it, the reasonable charges of attorneys in defending actions against persons injured for accidents which might result in liability of the company were proper claims against it for allowance by a receiver, and this though the services were rendered under a retainer by the company before the receiver was appointed.
    Hearing upon application of the receiver, Mr. Richard V. Lindabury, for directions.

      Mr. Richard V. Lindabury, fro se.

      Mr. Carroll Robbins, for the Virginia policyholders.

      Mr. Hamilton Wallis, for one class of policyholders.

      Mr. William H. Corbin, for another class.

      Mr. William D. Edwards and Mr. Proctor (of Boston), for certain claimants.
   Pitney, V. C.

This is an application, upon petition, by the receiver of the insolvent corporation defendant, upon notice to all the creditors, for instructions in the matter of paying a dividend, as to what creditors shall share in it. All the creditors had notice of the application and many of them appeared by counsel.

Three questions were presented:

First. The insolvent corporation issued several kinds or classes of policies of insurance. One class of insurance was by a policy called an Employers’ Liability Policy ” to employers insuring against their liability for accidents happening to employes.

In this policy the undertaking is expressed in the following language:

“That said, company will pay to the insured all damages with which the insured may be legally charged under the common law, or any statute (not exceeding the amounts hereinafter limited), for, or by reason of, any accidental injuries, fatal or otherwise, happening to any employe or employes of the insured,” &c.

Another policy issued by the company is called a “ Railroad Liability Policy,” and was issued to railroads, in which the covenant is:

“ That said company will pay to the insured, or their legal representatives,, all damages with which the insured may be legally charged, or which the insured may be required to pay (not exceeding the'amounts hereinafter limited) for or by reason of any liability on account of injuries inflicted upon the person or property of any person or persons whomsoever while traveling on the . railroad of the insured,” &c.

Another class of policies was issued to owners of steam boilers, and another to owners of elevators, for injuries occurring in their operation. But no question arises under either.

The first question arises under the “ Employers’ Liability ” policies and the Railroad Liability ” policies. In these policies provision is made for the service of notice by the insured upon the insurer of claims for damages for accidents, and an opportunity given to the insurer to defend the same.

Two classes of claims have been audited and adjusted by the receiver — first, those in which the accident happened, claim made and judgment recovered against the insured before the decree of insolvency; second, those in which the accident happened before the decree of insolvency, but in which the claim was made and allowed or judgment recovered on it after the decree of insolvency.

It is urged, on behalf of the first class, that by the true construction of the policy it should have priority and be paid out of the assets of the insolvent corporation before any of the other claims are paid.

The argument in support of this is as follows: That by the decree of insolvency all liability by the insolvent company as insurer from that time on ceases, and the assets of the company must be divided in accordance with the doctrine of Vanatta v. New Jersey Mutual Life Insurance Co., 4 Stew. Eq. 15; S. C., sub nom. Mayer v. Attorney-General, 5 Stew. Eq. 815; Duryee v. United States Credit System Co., 19 N. J. L. J. 18; S. C. on appeal, sub nom. Gray v. Reynolds, 10 Dick. Ch. Rep. 311.

The ground taken is that the person injured is not insured, but that the person liable for the injury is insured, and that the liability of the insurer to the insured arises only after the insured is “ legally charged,” in the language of the covenant above quoted, with liability on account of the accident; or, as put by the brief of counsel: “ In all these cases two things must coexist before any liability arose upon the policy of the defendant corporation — first, there must have been an injury to some person, and second, by reason of such injury the insured must have been legally charged with or required to pay something.” Or, in other words, the happening of the accident for which the party insured was ultimately held liable did not fasten any liability on the insurer, but that such liability, on the part of the insurer, arose entirely out of the recovery of judgment by the injured party against the insured party, whereby he became “ legally charged.”

I am unable to adopt this doctrine. The vice of the argument in support of it is that it treats the liability of the insured in the matter as depending not upon the intrinsic character of the accident, but entirely upon the question of whether .or not a judgment shall be rendered against it thereon ; precisely as the question of liability on a policy of life, fire or marine insurance is dependent entirely upon the actual occurrence — the death of the party, of the fire, or the actual shipwreck.

The recovery of the judgment against the insured by the injured party is not the injury against which the insurer insures him, but it is the liability for the consequences of the accident against which he is insured, and of which liability the judgment is a mere test or mode of proof. In fact, the recovery of the judgment is a mere mode by which the insured proves to the insurer that the intrinsic character of the accident was such that he was liable for the consequences of it. In this respect the judgment resembles the proof of loss to be furnished to an ordinary insurer against fire or shipwreck before action brought, or proof of death in case of life insurance. These are usually prerequisites to liability to action, but do not constitute the cause of action. And in .the case of a judgment against the party insured under one of these policies for damages for the result of an accident, the liability, though legally fixed at that time, relates back to the accident itself. In contemplation of law the insured either was or was not, from the first, liable for the consequence of the accident; and the presumption is that the result of an investigation of the facts was never doubtful from the first, and always sure to result according to the actual fact. So that the recovery of the judgment cannot be held or treated in the law as a contingency which may or may not happen, but a mere judicial ascertainment of the intrinsic character of the occurrence which determined the liability of the insured.

Again, another office of the judgment is to ascertain, by the only legal mode, the extent of the damages; precisely as the extent of the damages in case of a fire or shipwreck is to be ascertained by an inquiry undertaken before payment.

A question something like this arose in Duryee v. United States Credit System Co., supra, and was decided in favor of the view I have adopted; and that part of the decree advised by the learned vice-chancellor in that case was affirmed on appeal. Gray v. Reynolds, supra.

This very question arose, and was carefully considered and decided, in the case of Boston, &c., Co. v. Mercantile Trust and Deposit Co., by the court of appeals of Maryland, as reported in 82 Md. 535. That was a case precisely like this, of an insolvent company, which seems to have been engaged in precisely the same business as was the insolvent company here. The court, in that case, held that the insolvency of the company canceled all outstanding policies of insurance for the future, relying upon the case of Mayer v. Attorney-General, supra, as illustrated in Doane v. Millville Mutual Insurance Co., 16 Stew. Eq. 522. The contest there was between two classes of claims, precisely as it is here. The language of the policies there is not literally quoted, but it appears to have been very much, if not precisely, the same as the language in the policies in this case above quoted. The trial court excluded the second class of claims here under consideration, but the court of appeals, consisting of eight judges,, unanimously reversed the decision in that respect, and held that both classes were entitled to participate equally in the assets of the insolvent corporation. I refer to the reasoning of the court in 82 Md. 535.

This result is the only one which can be relied upon to do anything like justice between the parties. The rule contended for by the counsel who argued so ably in favor of the first class of claimants, would result in making an unfair distinction between cases in which there is no intrinsic difference. Two accidents might happen on the same day, and a judgment in one be recovered very shortly and before insolvency, and a judgment in the other might be delayed by litigation for months and years and until after insolvency, and yet there might be no difference in the intrinsic merits of either.

Second. The next ¡question presented and discussed was as to certain claims presented by several firms of lawyers in different states of the union, audited and adjusted by the learned receiver, for services in defending actions against persons insured for accidents which might result in a liability covered by a policy issued by the insolvent company. One of the terms of both classes of policies is this:

“If any legal proceedings are taken against the insured by any person or persons, or by the legal representatives of any person or persons, to enforce a claim or claims for damages against said insured, the company shall have the absolute conduct and control of defending against such proceedings, in the name and on behalf of the insured, and shall have the sole and exclusive control of such defence, with the right to compromise the same and to take such appeals, or other proceedings therein, as it shall deem best, the.company assuming all costs and expenses of such defence and proceedings. But if the company shall offer to pay the insured the full amount for which it is liable in respect to such claim or claims, then it shall not be bound to defend- in such proceedings, nor be liable for any costs or expenses which may be incurred therein.”

Besides this provision there are found among the conditions printed on the back of the policy certain clauses regulating the exercise of the right of defence by the insurer and also by the insured, which it is not necessary to set out at length. Suffice it to say that the learned receiver was of the opinion that these clauses, in effect, cast upon the insolvent company the duty of defending actions brought against the insured, wherever such defence was at all warranted, and that in case of a failure of the insurer to make such defence the insured might make it at his own expense, and charge against the insurer, under the policy, the reasonable cost thereof.

Most of the claims of lawyers audited and adjusted by the receiver were for services rendered under the retainer of the insolvent corporation, before it went into the hands of the receiver, in defending such actions. The receiver, in adjusting those claims, has made abatements in several instances by reason of the fact that the damages recovered were much beyond the insurance, and hence the defence was as much for the benefit of the insured as for the benefit of the insurer. A small portion of the claims, as I understand, is for services rendered in other matters beside the mere defence of actions of the kind above referred to.

I think that the circumstance that, the lawyers in such cases acted upon the retainer of the insolvent company and looked to it primarily for pay does not vary the case so far as the insolvent company is concerned, but that their claims should be allowed precisely as if they had been paid by the insured, and that they should be put on the same basis as the policyholders. The services were all rendered in defence of the general fund and were for the benefit of the policyholders. The presumption is — and the learned receiver, from a very careful and elaborate examination of all their claims, is of the opinion — that they are all meritorious in that respect.

At the argument the idea was enforced with great vigor that they are strictly within the limits of the terms of the trust upon which the securities — which constitute the bulk of the assets of the company — were deposited with the commissioner of banking and insurance of this state. The trust was that the securities were deposited for the protection and benefit of all the policyholders.” And it was argued that defending the fund against claims, the allowance of which would deplete it, was strictly within the terms of that trust; and I am not sure that the position is not well taken. Under the policies it was not only the contractual duty of the corporation to defend those claims in all cases where there was reasonable ground for such defence, but it was also their duty, independent of that contract, to so defend ; and I am inclined to think that the counsel fees, within reasonable limits, must be considered as a sort of salvage necessarily expended for the benefit of the fund.

Third. The third question arises in this wise: The statute of the State of Virginia requires any company like the preseüt insolvent company, doing business in that state, to deposit a certain amount of securities with the treasurer thereof, for the benefit of all policyholders residing in that state, and the insolvent company under that statute deposited about $10,000 worth of securities with the Virginia state treasurer. About $12,500 of claims of Virginia policyholders were presented against this fund in the Virginia courts, and they have been paid forty-six per cent, of their claims thereout. The fund is not yet exhausted, and there may be something further coming to them from it. 'These Virginia policyholders have proven their demands here, and claim a dividend on the balance of their claims after crediting the amount recovered from the special Virginia deposit.

The question is whether they are entitled to any dividend upon their claims until the other policyholders have been paid a dividend equal to the amount the Virginia claimants have received from this special Virginia fund.

The question raised is a nice one, and not without its difficulties. The actual deficiency which will arise upon the Virginia claims after the Virginia assets have been entirely exhausted is not yet determined. The receiver does not propose to make a dividend covering all the assets in his hands. In fact, he has only realized on a part of the assets. The others are still in specie, and perfectly good, and are drawing interest.

For these reasons I think it best not to express any opinion at this time upon this question, but will advise a dividend of thirty-three and one-third per cent, upon all the claims, except those of Virginia residents, of policyholders, and claims of lawyers for service in defending suits against policyholders out of the funds received from the securities lodged with the commissioner of banking and insurance.

A state of things similar to that in Virginia exists in Alabama, and is subject to the same order.


text:
    Catherine L. Cooper v. William J. Cooper et al.
    [Filed August 11th, 1897.]
    1. tinder a devise of specific real property to testator’s executors, “in trust, for the term of one year (providing my wife is still living and remaining my widow), to hold the same, receive all the rents, issues and profits, * * * and paying all the demands against said premises, and the profits * * * to go into and become a part of the residue of my estate, and at the end of the said one year after my death (my wife still living and remaining my widow), then I order and direct my said executors * * * to turn the said premises over to her, to have full care and charge of said premises, paying all taxes and demands against said premises during the term of her natural life, or so long as she remains my widow, she also to receive all collectible back rents due on said premises, and at the death of my said wife, or she again marrying,” &c., the gift to the widow is an estate for life, operative, in the absence of dissent, to bar her dowel’.
    2. Where testator, after having devised a life estate in certain real property to his widow, specifically devised the residue thereof “ absolutely and in fee,” the widow cannot have both such life estate and dower, but must elect.
    3. A power and direction to executors to sell and convey, giving a “ good and sufficient deed,” implies a conveyance by them free of dower, so that the widow would be required to elect.
    4. The fact that testator, who had charged his entire estate with an annuity for his widow, provided by a codicil that his daughter should have the proceeds of certain property, free from such charge, shows that he did not intend that the widow should have dower in his estate.
    5. A widow is not estopped to make her election to take dower instead of benefits under the will, by having accepted certain payments on account of an annuity provided, and certain articles of personalty bequeathed to her by the will of her deceased husband.
    Bill for dower. Heard on pleadings and proofs.
    The complainant, by her bill, asks to be endowed of all the real estate whereof her husband, John Cooper, late of the county of Camden, died seized. He died on the 18th of April, 1894, testate of a will executed on the 25th of October, 1893, with a codicil executed on the 21st of March, 1894. His estate consisted of both real and personal property of the value of nearly $100,000 each. He left three children, two sons and a daughter, by a former marriage, who are the defendants herein.
    By the first item of his will he made the usual direction for the payment of his debts.
    By the second item he gave to his wife, the complainant, all his household goods, lumber, garden-tools, chickens, &c., about his house and premises on Cooper street, Camden (being his homestead); also all the silverware, books, &c., that he might own at the time of his death. He also gave his wife full possession of his Cooper street residence for the term of one year (she remaining his widow) after his death, free from any taxes whatever except water rents, which she must pay, and his executors to keep the taxes and necessary repairs to the premises paid, and keep it in good, tenantable condition; and at the end of one year he directed his executors to sell and dispose of the Cooper street premises
    “ and give to the purchaser or purchasers thereof good and sufficient deed or deeds in the law, * * * and the proceeds thereof to go into and become a part of the residue of my estate.”
    The third clause is as follows:

      “ I give and bequeath to my executors hereinafter named, or the successor or successors of them, my three-story frame house and grounds situate on Broadway, in the said city and county of Camden, and State of New Jersey, in trust for the term of one year (providing my wife is still living and remaining my widow), to hold the same, receive all the rents, issues and profits from the said Broadway premises, and paying all the demands against said premises, and the profits from said Broadway premises to go into and become a part of the residue of my estate, and at the end of the said one year after my death (my wife still living and remaining my widow), then I order and direct my said executors hereinafter named, or their successor or successors of them, to .turn the said Broadway premises over to her, to have full care and charge of the •said premises, paying all taxes and demands against said premises during the ¡term of her natural life or so long as she remains my widow, she also to receive all collectible back rents due on the said premises, and at the death of my said wife or she again remarrying,” &c.
    By the fourth clause he ordered and directed his executors to set aside certain of his securities or other good-paying investments, in order to create a sum sufficient to pay his wife the sum of $2,700 yearly, payable semi-annually, for and during the term of her natural life or so long as she remains his widow.
    By the eighth clause he gave, bequeathed and devised to his. two sons, H. M. C. and W. J. C., the undivided half part of the farm known as the “ Cooperfield Farm,” situate in Gloucester county, to be divided between them, share and share alike, “ absolutely and in fee.”
    By the eleventh paragraph he ordered and directed his executors to sell -his three houses situate on North Nineteenth street, in the city of Philadelphia, as soon as practicable, and give “ good and sufficient deed or deeds in the law to the purchaser or purchasers thereof,” and divide the proceeds among his three children.
    By the twelfth item he gave, bequeathed and devised the equity that he owned in the premises known as 311 North Front street, in the city of Camden, to his two sons, H. M. C. and W. J. C., “ absolutely and in fee.”
    By the thirteenth item he gave, bequeathed and devised to his son H. M. C., “absolutely and in fee,” the premises on Chestnut street, above Seventh street, in the city of Camden.
    By the fourteenth clause he gave and bequeathed to his daughter, S. K. J., the house and store situate at the corner of Fifth and Stevens streets, and the house and lot on Sycamore street, during the term of her natural life, and at her death the premises to go to her children.
    By the fifteenth item, using the same language, he devised a farm known as “ Crystal Run Farm ” to his daughter, S. K. J.
    By the seventeenth section he gave, bequeathed and devised to his son W. J. C., “absolutely,” the premises he owned on Wood street, Philadelphia, Pennsylvania.
    By the nineteenth clause he gave to his executors full power and authority to sell and convert into cash all the rest, residue and remainder of his estate, real, personal and mixed, “ and give good deed or deeds in the law,” and the proceeds arising therefrom he ordered to be divided into three equal shares among his three children, “ first being careful that there is a sufficient sum set aside in my estate to carry out the provisions in the fourth item ” of his will.
    By the twentieth item he declares that he wishes it distinctly understood, and orders and directs,
    ““that all the bequests in this my said will is subject to a bequest of $2,700 per annum to my wife, Catherine L. Cooper, in the fourth item of this my will, during the term of her natural life or so long as she remains my widow, and at her death or she again remarrying, the aforesaid bequests to be free of the encumbrance made in the fourth item of this my will.”

      By the last item of his will he appointed his two sons executors and gave them power “ to give good and sufficient deed or deeds in the law for any property they may dispose of for the best interests of my estate.”
    By a codicil he revoked the devise contained in the fourteenth item of his will, of a house and store in Camden to his daughter, S. E. J., and ordered that the executors named in his will should sell the house and lot, and give good deed or deeds in law to the purchaser or purchasers thereof, and that the purchase-money thereof is not to be subject to any legacy or claim of his wife, Catherine L. Cooper.
    Under the second item of the will, the widow remained in the mansion-house, free of rent, for one year, and still remains therein. The executors, however, informed her that if she remained after the expiration of the year she would be obliged to pay rent.
    The first six months’ annuity was paid to her in four different payments, beginning in May and ending in October, 1894. At the end of the first year — April 18th, 1895 — when the second six months’ payment of the annuity became due, it was tendered to her and she declined to accept it, and three months later— July, 1895 — this bill was filed.
    The house in Broadway, which the executors were directed to turn over to her, was occupied by a tenant, and the executors directed the tenant to pay the rents to her that were due, and all that accrued after the 18th of April, 1895. The daughter of the-tenant called on the complainant for the purpose of paying her the rent, but she declined to receive it.
    She did not file any dissent under the sixteenth section of the Dower act.
    The executors delivered to her all the silverware of the testator, the same being on deposit in a safety vault.

      Mr. Samuel H. Grey, attorney-general, and Mr. Henry I. Budd, Jr., for the complainant.

      Mr. Howard M. Cooper, for the defendants.
   Pitney, V. C.

Three points are made by the defendants in opposition to this bill for dower.

First. That by the third section of the will a devise for life or during widowhood was made to the complainant of the Broadway premises, which bars her dower under the sixteenth section of the Dower act, unless she dissented therefrom within six months after the probate of the will, which she has not done.

Second. That the claim of dower is inconsistent with the terms of the will, and will disturb the disposition thereby made, and hence that the widow is put to her election between benefits under the will and her dower at the common law. And

Third. That she has already made such election by accepting bequests of personalty under the will and six months’ payment of her annuity.

The first question depends upon the true construction of the third clause of the will. The complainant contends that there is no devise to her of any estate at law, either for life or during widowhood, in the Broadway premises, but that they are either devised in trust to the executors, and hence within the rule in Vanarsdale v. Vanarsdale, 2 Dutch. 404, or that the benefit taken by the widow is a mere duty of care and management of the estate, for which she is to have the net proceeds of its income.

I cannot adopt this view. The gift to the executors is expressly in trust for the term of one year, “ to hold the same, receive all the rents, issues and profits and paying all the demands against the said premises, and the profits to go into and become a part of the residue ” of his estate.

iSTow it seems to me that that language limits the gift in trust to his executors for the term of one year. Then follows this clause:

“At the end of the said one year after my death (my wife still living and remaining my widow) then I order and direct my said executors hereinafter named to turn the said Broadway premises over to her, to have full care and charge of said premises, during the term of her natural life or so long as she remains my widow, she also to receive all collectible back rents due on the said premises.”

Then follows an order and direction to his executors to sell the same, and the proceeds to go into and become a part of the residue of his estate. The language “ to have full care and charge of said premises,” confirms the idea that the trust ceased at the end of one year, and it is to be observed that a continuance of the trust is not at all necessary to the power of sale.

It was admitted by the counsel of complainant that the result of the bequest was to give to the wife the beneficial use of the premises, but it was earnestly argued that such provision did not result in giving her a legal estate.

In my opinion, the direction to his executors to turn the said Broadway premises over to her [his wife], to have full care and charge of said premises,” &c., was, in effect, a gift of the premises to her for life. It put her in possession, and gave her the. right to the possession and use during her natural life. And such a gift, according to all the authorities, is an estate for life. The fact that it is limited to her widowhood, does not prevent it from operating as a bar, in the absence of dissent. Such was clearly the decision of Chancellor Vroom in Stark v. Hunton, Sax. 216, a leading case on this topic; Den v. Manners, Spen. 142; Hance v. West, 3 Vr. 233; Morgan v. Titus, 2 Gr. Ch. 201; White v. White, 1 Harr. 202, where the provision was, as here, for life or widowhood; Thompson v. Egbert, 2 Harr. 459; Thomas v. Thomas, 2 C. E. Gr. 356; Wooster v. Cooper, 8 Dick. Ch. Rep. 682; Kearney v. Kearney, 2 C. E. Gr. 59. I have no doubt that the complainant can maintain ejectment for the premises in question.

This result is, of course, fatal to the complainant’s claim.

Second. I think, also, though it may not be necessary to-express any opinion upon it, that the second point must be-resolved against the complainant, and that if I am wrong in my first position, she should be put to her election between benefits-under the will and her claim for dower, and that she cannot have both, on the plain ground that the assertion of her right of dower will interfere and be inconsistent with the disposition the-testator has made of his property.

The testator, in point of fact, disposed of all his real estate,, most of it by specific devises, and where there was no specific devise he disposed, of it by the direction and power of sale in his disposition of the residue of his estate; and in every instance it is plain, where there is a direct specific devise, that the testator intended that the devisee should take an absolute and full estate. He uses the word “ absolute ” in two or three cases. By the term “absolute,” I think, he intended a full and complete estate.

Then, when he directs a sale, he directs his executors to give “ good and sufficient deeds.”

How, I think that by that language the testator intended to direct his executors to give good and sufficient title. The will was not prepared by a skilled draftsman, and, in common parlance, to give a “ good and sufficient deed ” means to give a good and sufficient title; and I think that was the force of the language here used.

Some of the older English cases, and perhaps a few in this country, have held that a direction to executors to sell and convey real estate, did not necessarily indicate that they were to sell free and clear of the dower of the widow. But the modern decisions, which, in my judgment, are more in accordance with common sense, tend to hold that a power and direction to sell and convey necessarily includes the idea of conveying the title free and clear of dower. Except sales of real estate by sheriff on common-law judgments, the cases where a sale of real estate is made by a husband without his wife joining him are very rare indeed. Ordinary purchasers will not accept a title with an outstanding inchoate dower upon it, much, less one that has dower fastened upon it by the death of the husband. Such a title is not marketable, in the ordinary sense of that word. On this subject I refer to the cases already cited, and to Colgate v. Colgate, 8 C. E. Gr. 372, and the cases there cited; Stewart v. Stewart, 4 Stew. Eq. 399; Norris v. Clark, 2 Stock. 51; Griggs v. Veghte, 2 Dick. Ch. Rep. 179.

The provision in the codicil .that his daughter shall have the proceeds of the sale of a certain house free from any legacy or claim of the widow is made to except this bequest from the effect of the general charge in the widow’s favor found in the twentieth item. This provision in the twentieth item covers his whole estate, and of itself shows that the testator did not intend that his widow should have any other claim upon it.

The proofs show that the provision by the will is much larger than would be her right as dowress; so that it is not probable that she would choose the latter.

On the third question submitted, laying out of view the failure to file her dissent, I do not think the widow has made any such election as will prevent her from making her election to take dower instead of benefits under the will.

I will advise that the bill be dismissed, with costs.


text:
    H. C. Tack Company v. Melancthon S. Ayers, Henry A. Wilson and George L. Wilson.
    [Filed August 12th, 1897.]
    1. A partition of land held by three brothers as tenants in common was .made by mutual release deeds. The deeds releasing the interest of one of the tenants in the land divided and set off to his two brothers, were not recorded within fifteen days, as required by Gen. Slat. p. 855 § 14, to make them valid against a subsequent judgment creditor of the transferer. — Held, that no equity arose in favor of the grantees as against the judgment creditor to have any further conveyance from the judgment debtor.
    2. A chain of title to land showing the title in a father, and a devise by him to three sons as tenants in common, and release deeds from two of the sons to the third, conveying their title in a divided one-third of the land, is not sufficient to charge a purchaser making an examination thereof with notice that the land has been partitioned among the three sons by mutual release deeds.
    3. Gen. Stat. p. 855 § 14 provides that ‘ ‘ every deed or conveyance of land which shall not be recorded within fifteen days after its execution and delivery shall be void and of no effect against a subsequent judgment creditor or bona fide purchaser, or mortgagee for a valuable consideration, not having notice thereof.” — Held, that whatever is sufficient to charge a purchaser with notice is sufficient to charge a judgment creditor.

      Bill to foreclose mortgage on real estate. Heard on bill, answers and proofs.

      Mr. George P. Rust and Mr. John B. Humphreys, for the complainant.

      Mr. Peter W. Stagg, for the defendants.
   Pitney, V. C.

The only contested question in the cause is as to the order of priority between the complainant’s mortgage and a judgment held by the defendant Ayers, who, as he claims, has a lien upon an undivided portion of the mortgaged premises.

The premises in question consist of a lot of about one acre of unimproved and unoccupied land, devised by a father — David Wilson — to three brothers, Henry A., George L. and Charles B. Wilson.

On April 26th, 1882, the three brothers made a partition of the premises into three equal plots, by three several deeds, all bearing date April 26th, 1882, each expressed to be made in consideration of $1, in each of which two of the brothers released to the third the plot intended to be allotted to him, the result of which was that each brother became seized in severalty of an equal divided one-third part or plot of the acre.

The deed to Charles Wilson was recorded on the 14th of March, 1883, and on the 20th of May, 1890, he conveyed his plot to his two brothers — Henry and George — by deed expressed to be in consideration of $800, which was duly recorded on the 23d of May, 1890. The result of these conveyances was to vest the title to the whole original lot in Henry and George — that is, they were tenants in common of Charles’ plot, and each held in severalty one of the other plots.

In that condition of things, Henry and George made the mortgage set out in the bill, dated and recorded in September, 1893, conveying the whole plot to the complainant to secure promissory notes given by them to the complainant. The two deeds, however, from Charles and George to Henry, and Charles and Henry to George, of the two plots set apart to each of them in the original partition, were not recorded until the 26th of March, 1894, leaving the apparent title of those two plots still in the three brothers. In the meantime, to wit, on the 19th of February, 1894, one McComb recovered a judgment against Charles for $486.49 in the Bergen county circuit court, which was afterwards assigned to the defendant Ayers. Under'that judgment Ayers claims a lien superior to the complainant’s mortgage upon one equal undivided third part of the two several plots set off to Henry and George. His claim is based upon the fourteenth section of the “Act respecting conveyances” (Gen. Stat. p. 855), which declares

“that every deed or conveyance of land which shall not be recorded within fifteen days after its execution and delivery shall he void and of no effect against a subsequent judgment creditor or bona fide purchaser, or mortgagee for a valuable consideration, not having notice thereof.”

Counsel for complainant seeks to evade the literal effect of this statute in several ways. First, he says that by the will under which the three brothers claim this land the legal title was not vested in them at the time the judgment was recovered, and therefore no lien was acquired. Without setting out the will at length, I think that point cannot be sustained.

His next point is that the legal title having been conveyed' away and the title absolutely vested in the mortgagors before judgment, there was nothing left for the judgment against Charles to fasten upon, and that the general rule is that a judgment creditor is not a bona fide purchaser for value, and cannot be classed with a person who has parted with anything of value on the strength of apparent title, citing, in that behalf, the cases of Harney v. Bank, 7 Dick. Ch. Rep. 697, and Cresse v. Security Land Co., 9 Dick. Ch. Rep. 447, and other cases there cited.

The general principle undoubtedly is that a mere judgment creditor is not entitled to the vantage ground of a bona fide purchaser or mortgagee who has parted with value on the strength of an apparent title; but the difficulty in the way of counsel’s present argument is that the statute in question, as was pointed out in the cases just cited, places a judgment creditor on a higher plane in this respect than either a purchaser or mortgagee, and it is impossible to avoid the effect of that language. The unrecorded deeds from Charles to Henry and George must be held absolutely void against the judgment creditor unless he had actual or implied notice of them, and the complainant's mortgage must fall with them.

Some evidence was offered as to the possession of this lot by the mortgagors, from which it was faintly argued that a judgment creditor was bound to take notice that they were the exclusive owners; but the proof in that respect failed, and the case must stand unaided by any implied notice arising from possession. In fact, there was no actual, exclusive occupation.

But counsel for complainant placed his case on higher ground and made a further argument, which may be divided as follows: First, he says that the chain of title of the premises indicated clearly to the judgment creditor that there must have been a partition. The interest upon which he claims a lien is, as we have seen, an equal undivided one-third part of the equal divided two-thirds of the whole, viz., the two plots set off to Henry and George, and, in order to show any title to that two-thirds part, defendant is obliged to resort to the title of the three brothers under the will of their father, and, back of that, to the deed to the father on record. He cannot rely upon mere possession in his judgment debtor, for he had no other or greater possession than his brothers had, and, in point of fact, there was no actual possession. This chain of title charges him with notice that his debtor held as tenant in common with his brothers. He then finds the two brothers giving a conveyance to the judgment debtor, for a nominal consideration, of a distinct portion of the premises which, when plotted, shows that it was exactly or nearly a one-third portion, and later the record shows the debtor reconveying to the brothers, for a full consideration, this one-third part.

The contention of counsel of complainant is that these conveyances, in connection with the title to the whole land in the father, and the devise to the three sons clearly indicate that there had been a conventual partition carried through by the execution of mutual releases.

The precise line of argument is this: that the judgment creditor, or the sheriff as his agent, in looking for landed property upon which to levy, would have found none whatever indicated by any actual possession; that his next resort, in “the ordinary course of business, would have been to search the record of deeds in the name of the debtor as grantee, which would have led him necessarily to the conveyance by his two brothers to him, for a nominal consideration, of a distinct plot of land not marked on the ground by any metes and bounds, and a reconveyance of the same by the debtor, for a valuable consideration, to the two brothers. Further searching, he would have learned, as a matter in pais, that the judgment debtor was the son of a certain man, who was deceased. Looking, then, in the name of that man as grantee, he would have found a deed to the father of a block of land which, when plotted and placed by its calls on the ground, he would have found included in its metes and bounds the small plot previously conveyed by the two brothers to the debtor, and by the debtor back to the two brothers, and that the small plot was just one-third in size of the whole. He would then have found that the father had devised that land to the three brothers, and in that way he would have found the title to the whole lot in the three brothers as tenants in common. Then he would have again met the two conveyances from the two brothers to the debtor, and back to the debtor by the two brothers, of a distinct portion equal in quantity as plotted to one-third of the plot devised. And this discovery, counsel argues, was enough to put him upon inquiry as to whether or not there had been a partition and joint releases executed, and that if he had inquired of the two brothers, he would have at once ascertained the true facts.

The question is whether such discovery of the situation of the title would have been sufficient notice to him to put him upon inquiry of the two brothers.

It is undoubtedly the rule that the judgment creditor is bound by the contents and recitals in the deeds composing the chain of title of his debtor. And it must also be admitted, for present purposes, that if the facts are sufficient to put him upon inquiry, it was inquiry of the two brothers, which must, in the ordinary course of business, have led him to a discovery of the unrecorded conveyances. This consideration frees the case from some of the embarrassing circumstances found in many of the decided cases, and confines the discussion to the narrow question as to whether the judgment creditor was put upon inquiry.

The circumstances which have been held sufficient to put a party upon inquiry were not such as might excite the suspicion of an unusually cautious or curious person, but such as would arrest the attention of a person of average cautious temperament and ordinary intelligence, and familiarity with the work of looking into titles.

The rule has been stated in a case cited by complainant—Knapp v. Bailey, 79 Me. 195—as follows: The doctrine of actual notice implied by circumstances supports the rule that if a party has knowledge of such facts as would lead a fair and prudent man using ordinary caution to make further inquiries, and he avoids inquiry, he is chargeable with notice of the facts which by ordinary diligence he would have ascertained. As to what would be a sufficiency of facts to excite inquiry is too difficult of definition to admit of any definite rule, each case depending on its peculiar facts.”

The question is one of implied notice as distinguished from constructive notice.

There is no difficulty as to the character of the general inquiry into the chain of title. It is such as a proposed purchaser or mortgagee would make, for although a careful examination of the chain of title is not usual, and is generally unnecessary in making levies under judgments, yet the legislature in this regard has placed judgment creditors and purchasers and mortgagees on the same'footing, and whatever will charge purchasers and mortgagees with notice will charge judgment creditors. Besides, in this case, as we have seen, no levy could have been made without examining the records which would have produced the information above stated.

The only question, then, is whether the circumstances above stated were sufficient to put a proposed purchaser for value upon notice, and I come, with some regret, to the conclusion that they are not sufficient. It is not worth while to recite the authorities. I have examined all the cases in this state, and many of those cited in the notes to Le Neve v. Le Neve, 2 White & T. Lead. Cas. *688, *689, and also in the Am. & Eng. Encycl. L., tit. “Notice,” and I find none, nor has the industry of the counsel of complainant been able to point out one that goes so far as I am asked to go here. Howard Insurance Co. v. Halsey, 4 Sandf. 565; S. C. on appeal, 8 N. Y. 271, may be cited as an extreme case, but it fails to reach the case in hand.

The next point made by counsel is this: granting that the contract for partition rested merely in parol, yet that it was executed on the part of Henry and George by their conveyance to Charles, and hence an equity arose in their favor to have conveyances from Charles for the shares allotted to them severally; that this equity was not discharged by the subsequent conveyances from Charles to them, and that it still exists, and that under the rule acted upon in Harney v. Bank, 7 Dick. Ch. Rep. 697, it is superior to the judgment. The simple and complete answer to this contention is that the contract for partition was fully executed and fulfilled by the execution and delivery of the deeds by each and all of the parties. This leaves the brothers Henry and George without any equity against Charles in respect of the land in question. I am unable to perceive upon what principle they could call upon him for a further conveyance or conveyances. Their failure to record their deeds was the result of their own neglect, and raised no equity against Charles. To adopt the reasoning of the counsel of complainant on this point would be to repeal the recording act so far as judgments are concerned.

I will advise a decree in accordance with the foregoing views.


text:
    The Grand Lodge, Knights of Pythias of New Jersey, v. Germania Lodge, No. 50, Otto Jansen et al.
    [Filed August 21st, 1897.]
    1. In suing the trustees of an unincorporated lodge, the lodge was joined as party defendant, although its disbandment had occurred, unknown to complainant, before the filing of the bill. — Held, that a motion by complainant to strike from the bill both the name of the lodge as a party defendant and also an allegation of the continued existence of such lodge should be granted.
    2. An unincorporated subordinate lodge was organized under a charter granted by an incorporated grand lodge, which, in turn, was subordinate to a supreme lodge. The members of the subordinate lodge pledged themselves to act at all times in obedience to and in accordance with the enactments of the grand lodge, which enactments were bound by charter to be in conformity with the statutes of the supreme lodge. These supreme statutes provided that the receipts of a subordinate lodge “shall constitute a trust fund for carrying out the fraternal and beneficial features of the order. * * * This fund shall not be subject to partition among the members of the lodge, and in case a lodge shall for any cause cease to exist, this fund shall revert to the grand lodge within whose domain the lodge is located.” The members of the subordinate lodge disbanded, first voting to pay the money in the treasury to a sick benefit society-not connected with the order, and to which the lodge members belonged. The vote was carried into effect. — Held, a diversion of the trust funds. The trustees and those assisting in the actual disposition of the funds were jointly and severally liable to the grand lodge for the whole fund.
    3. The charter of the grand lodge provided that it “ shall and may at all times hereafter be capable in law of having, purchasing, holding and possessing any land, tenements, hereditaments and personal estate.” — Held, that the title to moneys paid into the subordinate lodge vested at once in the grand lodge, and the officers of the subordinate lodge were merely custodians of the fund during the existence of the lodge.
    4. Members of a subordinate lodge organized under a charter from a grand lodge, who have disbanded as a lodge, and deny their membership in the organization, and have forsaken the lodge property, are estopped from denying that the forfeiture of property held by the subordinate lodge, consequent upon the surrender of their charter, has taken place.
    Heard on bill, answer and proofs.

      This bill is filed by a corporation named the Grand Lodge, Knights of Pythias of New Jersey, duly incorporated by act of the legislature, March 29th, 1871 (P. L. of 1871 p. 1027), against a subordinate lodge known as the Germania Lodge, No. 50, Knights of Pythias of New Jersey, and certain individuals, late members thereof.
    Germania Lodge, No. 50, is an unincorporated association acting under a charter issued by the grand lodge on the 25th of May, 1870.
    The gravamen of the bill is that the individual defendants have diverted certain funds of Germania Lodge, No. 50, for purposes not authorized by the charter or by-laws of the association, and that thereby a right of action has accrued to the complainant to recover the same.
    The order of the Knights of Pythias is composed of three series of lodges — first, the Supreme Lodge, Knights of Pythias, which is an institution incorporated under the laws of the United States, and is the highest and supreme lodge of the world, its headquarters being in the United States. Next to that are the grand lodges, which possess charters or warrants legally granted by the supreme lodge. Of these the Grand Lodge of New Jersey is one. Then come subordinate lodges, which are chartered by the grand lodge, of which the Germania Lodge, No. 50, is one. The order has a written constitution and statutes. The constitution divides the organization into three separate departments— executive, judicial and legislative — and creates a great number of officers.
    The constitution provides modes of enacting laws, to be binding on all lodges and members of the lodges.
    The legislative records of the supreme and grand lodges, contained in several volumes, were offered in evidence to show that the constitution and laws, as contained in the printed book offered in evidence, were properly and lawfully adopted and passed.
    The Grand Lodge of New Jersey was instituted by the Supreme Lodge of the World by a charter dated the 1st of April, 1870. By the terms of its charter the grand lodge was

      “authorized and empowered to organize subordinate lodges in its own jurisdiction in conformity to the laws established by the Supreme Lodge of the World, and govern said lodges according to the intent and meaning of the laws of the order as promulgated by the supreme lodge;"
    and it closes thus:
    “And the said Grand Lodge of the State of New Jersey doth solemnly promise to act according to the instructions of this charter until it is revoked,” &c.
    The charter by the Grand Lodge of New Jersey to Germania Lodge, No. 50, authorized and empowered it
    “to make laws, rules and regulations for its government and support in conformity with the laws, rules and regulations of the said grand lodge and those of the Supreme Lodge of the Knights of Pythias, the officers and members of the said lodge No. 50 solemnly pledging themselves to act at all times in obedience to the commands and enactments of the said grand lodge, and in accordance with the laws, rules and regulations of the order, in default of which this charter or warrant of authority may be revoked, suspended or taken away at the pleasure of the said grand lodge.”
    By the installation ritual each officer, sincerely promises that he will faithfully and impartially perform all the duties incumbent upon him as such officer, to the best of his ability and understanding, and in accordance with the provisions of the constitution and laws of the Grand Lodge of New Jersey and of the Supreme Lodge Knights of Pythias of the World.
    Germania Lodge, No. 50, acted in full sympathy with and subordination to the Grand Lodge of New Jersey certainly up to and including the 31st of December, 1893, and thence apparently until November, 1894.
    On the 13th of January, 1894, they rendered to the grand lodge a statement of their affairs for the previous year, including the names of their officers, the amount of money received and disbursed, the amount of cash on hand, and the number of their members, the latter being sixty-five. This was made, under the hand and seal of the association, by Nicholaus Rommell, chancellor commanding (president), and Charles A. Firner, keeper of ' records and seals (secretary).

      In the fall of 1894 a majority of the members of Germania Lodge took offence at some direction or regulation of the grand lodge with regard to the mode of keeping their records, and disbanded, and resolved to proceed no further under the charter from the grand lodge. No formal action, as a body, was taken on this subject until a meeting of November 27th, 1894, but previously to that, at a regular meeting on November 13th, four members, who did. not wish to leave the order, applied for and received from the lodge in meeting, what are called “ withdrawal cards,” which enabled them to enter any other lodge of the same order.
    On November 27th, 1894, the lodge, in meeting, adopted a resolution to the effect that they should dissolve, draw the money from the bank and turn it over and make a present of it to the “Beneficial Verein.” The language of the resolution, as translated from German, is: “ Whereupon the lodge resolved to dissolve, draw the money from the bank, establish a society and present the same the money for charitable purposes.” The evidence shows that they acted on the idea that, while they had no right to divide the money among themselves, they could make a present of it to a sick benefit association. Previous to the adoption of this resolution each of the officers had tendered his resignation as such.
    There is no proof as to what sort of an association the “Beneficial Verein” was, or how organized, except that it was said to be a sick benefit association formed by the members of Germania Lodge, No. 50.
    That all the members of the lodge, except those who took withdrawal cards on the 13th of November, resolved to abandon and did actually abandon the Knights of Pythias organization, is an admitted fact. The insignia, paraphernalia, seals, books and papers were left without care or custody in the hall which they had occupied, over a beer saloon owned and occupied by one of their members, Otto Jansen; and upon the stand all of them denied any custody or knowledge of the whereabouts of any of the books, insignia, paraphernalia, &c. Some of them were afterwards, pending the trial, found by the solicitor of the complainant, acting under the verbal order of the court, in a closet in the lodge-room.
    The lodge kept an account in the German Savings Bank of Newark, which commenced on the 1st of July, 1884, and went on continuously until the 14th of November, 1894, when it was transferred to a new account known as the Columbia Kranken Untersturtzen Verein (Sick Benefit Association), No. 3. The transfer was made by virtue of an order dated November 13th, 1894, signed by the defendants — Charles A. Firner, knight of the records and seals ; Max Seelinger, the chancellor commanding; F. Teschke, Henrich Sonn and Otto Jansen, trustees (all defendants) — and is as follows:
    “Newark, New Jersey, November 13, 1894.
    “ To Cashier of German Savings Bank :

    “Please pay over to Trustees of Germania Lodge, No. 50, K. of P., the full amount due to said Lodge. Respectfully, by order of above-named Lodge.”
    This order was filed with the bank, and a receipt given in these words:
    “$695.59. Newark, New Jersey, November 14, 1894.
    “ Received from the German Savings Bank, Six Hundred and Ninety-Five Dollars 59/100, on Pass-Book No. 5,204, Germania Lodge. Order on file.
    (Signed) “Otto Jansen.”
    There is nothing on the minutes of November 13th to justify the order of that date, and the first entry on the minutes showing official action is that above set forth of November 27th, two weeks later.
    Besides this money in the German Savings Bank, the lodge was the owner of four bonds of the Newark water bonded registered debt standing in its name on the register of the city in the comptroller’s office, numbered 3,089, 3,090, 3,091 and 3,092, of the par value of $100 each, and on November 26th, by a paper signed by Max Seelinger, chancellor commanding, Charles A. Firner, secretary, that water stock was assigned to the Columbia Kranken Untersturtzen Verein, No. 3, and was registered in its name.

      In addition to that, the lodge had a small sum'.of money— $102.25 — in the Security Savings Bank, in the name of “Christian Specht, [former] Treasurer of Germania Lodge, No. 50,” and on the 14th of November this sum was withdrawn by Otto Jansen, then treasurer, and the pass-book delivered up.
    On the 14th of November, 1894, there was deposited in the same bank to the credit of the trustees of the Columbia Kranken Untersturtzen Verein, $77.25, being just $25 less than the amount previously-standing to the credit of Germania Lodge, No. 50. That money was afterwards drawn out by the defendant Henrich Sonn.
    These parties afterwards organized another association called “ Germania Lodge, No. 1, Improved Order Knights of Pythias,” and some of these funds were turned over to it. .This last organization, however, was not subordinated and owed no allegiance to the Grand Lodge of New Jersey. It seems to have been set on foot about the 10th of December, 1894, and on that date the whole of the $695.59 standing to the credit of the Columbia Kranken Untersturtzen Verein, No. 3, was drawn out by Anton Schonk, president, and Henrich A. Sonn, treasurer, of Columbia Kranken Untersturtzen Verein, No. 3. The order was in these words:
    “ 10,206. Newark, December 10, 1894. ) “ Columbia Kranken Untersturtzen Verein, No. 3. )
    “ To the Cashier of German Savings Bank :

    “The Trustees of the above-named Society are herewith authorized to draw all the money belonging to the Columbia Kranken Untersturtzen Verein, No. 3, N. J. The Cashier will please oblige. §695.59. Pres., Anton Schonk; Sec., Max Seelinger; Treas., Henrich A. Sonn; Trustees, Otto Jansen, Max Seelinger, Nicholaus Rommell.”
    And the receipt for the money was signed by Max Seelinger, secretary.
    This money when drawn out came into the actual possession of Henrich Sonn, as treasurer of the new organization — Gerr mania Lodge, No. 1, Improved Order Knights of Pythias. A portion of it was deposited in the Dime Savings Bank of Newark, to the credit of Henrich Sonn, trustee, where it still remains.

      On the 10th of December, 1894, Max Seélinger, as. secretary, and Anton Schonk, as treasurer of Columbia Kranken Untersturtzen Verein,'No. 3, sold to Charles Teschke the $400 of funded water bonds, and received the money therefor, which, was handed to Otto Jansen. That made at least $1,155 of cash belonging to the lodge, counting the fund in the Security Savings Bank as $77.25 instead of $102.25, and it is so entered, as of November 28th, 1894, on a small account-book kept and produced by Mr. Sonn and offered in evidence.
    A paper was produced dated November, 1894, which recited:
    “ We, the undersigned members of Columbia Kranken Untersturtzen Verein, No. 3, of Newark, New Jersey, do hereby acknowledge the receipt of cash money due as amounting to $25,”
    signed by thirty-eight or thirty-nine men, all of them said to have been members of Germania Lodge, No. 50, Knights of Pythias. The proof at first tended to show that that- money was paid in cash to each of them, but cross-examination showed that it was actually paid in cash to very few — not more than two or three at the outside — the whole being left in the hands of Mr. Sonn, the treasurer. But a considerable portion of'it was disbursed for sick benefits, at the rate of $10 a week, and all that remained at the time of the hearing, so far as appeared, was $400 deposited in the Dime Savings Institution.
    The fund which on the 14th of November, 1894, amounted to about $1,200, was the result of the accumulation of years of contributions of present and previous members of the association, and not of- the contributions of the then actual members.
    The intended action of the lodge, which was really developed on the 13th or 14th of November, 1894, coming to the knowledge of the officers of the Grand Lodge of New Jersey, Mr. Kranmer, the grand chancellor of the grand lodge, issued a commission to Mr. George Schmidt, of .Granite Lodge, No. 21, as district deputy grand chancellor of the district which included Germania Lodge, No. 50, and Schmidt, by virtue of that commission, went to the lodge-rooms over Jansen’s saloon, .found-Mr. Jansen, learned from'him that the lodge had disbanded, and thereupon demanded the books, papers, paraphernalia and money belonging to the lodge, but was told that the money had been distributed and that the paraphernalia of the lodge was in the lodge-room. Shortly after that, and, as far as appears, before the filing of the bill, he demanded and received the charter of the lodge from Mr. Jansen, who had it behind his beer counter.
    The original bill was filed on the 8th of December, 1894, against the lodge by its name, Charles A. Firner, Otto Jansen and the savings bank. An injunction was issued, which, however, did not succeed in staying the money in the hands of any of the persons who received it. Further information coming to the Complainant, an amended bill was filed early in February, 1895, adding the additional defendants, and praying relief against them.
    The actual tracing of the movement and disposition of the funds of the lodge came out on the hearing. Subsequently a motion was made to strike out the Germania Lodge as defendant and the allegation that it was still in existence as a voluntary organization, on the ground that it was substantially dissolved and had ceased to exist before bill filed.
    The exact amount received by each of the defendants, as distinguished from the others, is as follows:
    Otto Jansen received $102.25, moneys deposited in the name of Christian Specht, as treasurer, in the Security Savings Bank. He, Jansen, also received $400 in cash from the sale of the water bonds. He also signed, with the others, an order for the $695.59 on the German Savings Bank.
    Henrich Sonn enters in his book on November 28th, 1894, that he received $1,155 of the funds. He actually received on December 10th, $695.59, and he received from Mr. Jansen the $77.25, and presumably he received the proceeds of the water bonds — $400—which would make in all $1,172.84.
    Seelinger and Schonk transferred the water bonds and paid the money to Jansen.
    . The $102.25 deposited in the. Security Savings Bank was transferred by the order of Seelinger, Jansen and Rommell.

      The constitution of the supreme lodge provides, among other things, that
    “the rituals of the order, the supreme constitution and the laws enacted by the supreme lodge in accordance therewith shall be the supreme law of the Order of Knights of Pythias.”
    By chapter 16, section 328, of the supreme statutes, the funds of the lodge are devoted to a particular purpose, as follows:
    “The receipts from fees and dues and the increments thereof shall constitute a trust fund for carrying out the fraternal and beneficial features of the order, and shall not be expended for any other than those purposes and the payment of the necessary expenses of the lodge, as those purposes and expenses may be determined legislatively or judicially by the grand lodge having jurisdiction, which grand lodge shall also determine the vote that shall be necessary to make an expenditure from the fund, and the manner in which it may be invested, if at all. This fund shall not be subject to partition among the members of a lodge, and, in ease a lodge shall from any cause cease to exist, said fund shall revert to the grand lodge within whose domain the lodge is located.”

    By article 8, section 5, it is provided that on the decease of a member in good standing, an appropriation of not less than $20 shall be made towards defraying the expenses of his funeral.
    There was, in addition to that, a sick benefit privilege. Article 8, section 2, on that subject, is this :
    “ Every member who has received the rank of knight and is in good standing in his lodge, incapacitated by sickness or other disability from attending to his usual business or some other occupation, shall be considered a beneficial member, entitled to receive such weekly benefits as the by-laws prescribe, which shall not be less than one dollar per week.”
    In addition to the sick and funeral benefits provided, there is an insurance branch of the order known as the “Endowment Rank,” of which members-of the order are privileged to become members, and of this at least one of the members, Christian Specht, who took his withdrawal card from the lodge November 14th, 1894, when it was found that the lodge was about to dissolve, was a member. This branch of the business is entrusted to a board of trustees appointed and controlled by the supreme lodge.

      The constitution and by-laws of Germania Lodge, No. 50, show that the terms of its charter were complied, with, and that its by-laws were made in accordance with and subordinate to the constitution and statutes of the supreme lodge and grand lodge.
    The grand lodge enacted and ordained a constitution for all the subordinate lodges, and that constitution was accepted by Germania Lodge, No. 50.
    By article 13, section 4, of the constitution of the subordinate lodges, it is provided as follows:
    “A lodge becoming dissolved by the surrender of its charter, its property and effects shall he returned to the grand lodge as provided for in article 12; section 3, subordinate lodge constitution, and the penalty provided for in said article and section relative to failure or refusal shall have full force and effect.”
    Article 3, section 1, of the by-laws of Germania Lodge, No. 50, which, as we have seen, were approved by the grand lodge, is in these words:
    “Any brother of this lodge who is already a member for six months, and has paid to the lodge all dues, fines and assessments, shall, if he fall sick through no fault of his own, and disabled for work and possess the third grade, receive the sum of five dollars, weekly sick benefit money,”
    until he has received $200, and after that he shall only receive $2.50 a week, but if he becomes afflicted with an incurable disease, then he is to have $1 a week.
    The complainant offered in evidence several large volumes of the record of the proceedings of the supreme lodge to show that the laws contained in the volume offered in evidence had been regularly and lawfully enacted in accordance with the constitution of the supreme lodge.
    The constitution of the subordinate - lodges provides for the election of certain officers as president, secretary, master of finances and treasurer, and that no disbursements of the funds shall be made by an order from the president, attested by the secretary.

      Mr. Walter F. Hayhurst, for the complainant.

      Mr. Samuel Kalisch, for the defendants.
   Pitney, V. C.

The first question to be considered arises on the motion to strike out of the bill the allegation of continued organic existence of Germania Lodge, No. 50, Knights of Pythias, and its name as a party defendant.

I think the motion should be granted. The organization of the lodge had been destroyed by the withdrawal, on November 13th, 1894, of a part of its members, and by the resignation, on November 27th, of all its officers, and the resolution to dissolve, accompanied by the complete abandonment by all its members of the organization. This was not fully known to the complainant when it prepared its bill, and it should not be bound by the allegation of its continued existence. Though the statutes of 1885 and 1890 (Gen. Stat. pp. 2588, 2592 §§ 324, 342) provide for suing an unincorporated association like this at law, and it is possible, though I doubt it, that it warrants the making such association a party to a suit in equity like this, yet nothing can be gained thereby, and I think its name should be stricken from the bill as a party defendant.

This brings us to the merits.

It is familiar law that funds accumulated as were those here in question become, as soon as paid in, impressed with a trust with all its consequences. In this case the terms of the trust are found in the constitutions of the supreme, grand and subordinate lodges, and the laws of the former and by-laWs of the latter. The funds being impressed with such a trust cannot lawfully be diverted therefrom, and all persons aiding and assisting in such diversion are guilty of a breach of trust and liable for the consequences. Torrey v. Baker, 1 Allen 120; Abels v. McKeen, 3 C. E. Gr. 462; Fraas v. Barlement; 10 C. E. Gr. 84; Altmann v. Benz, 12 C. E. Gr. 331; Van Houten v. Pine, 9 Stew. Eq. 134, and note on p. 135; State Council v. Sharp, 11 Stew. Eq. 24, and cases cited; Crisman v. Smith, 17 Stew. Eq. 240; Gable v. Miller, 10 Paige 627; Den v. Bolton, 7 Halst. *206; Den v. Pilling, 4 Zab. 653; Hendrickson v. Decow, Sax. 577; Nibl. Mut. Ben. Soc. § 144 seq. § 354.

The ease of State Council v. Sharp, supra, is quite in point. Chancellor Runyon (at pp. 26, 27) says: “The defendants have willfully violated the law of the society in dividing up its funds among themselves and taking them to their own use. Of these funds, part, at least (that called the widows’ and orphans’ fund), was the accretion of years, and it is highly probable that others than they made some of the contributions from which during those years it has been accumulated. But from whomsoever derived, the money in question, the council and widows’ and orphans’ funds, was contributed under the charter for and dedicated to certain specified purposes, for which it was, from the time when it was contributed, held in trust by the society and its officers to whose hands it was committed or to whose control it was subjected. It was held by them also subject to the trust to pay it over to the state council in case of the dissolution of the subordinate one. The defendants, therefore, had no right to take the money. It is within the jurisdiction of this court to grant the relief which the complainant seeks.”

The laws of the order of the Knights of Pythias provide how, and upon what formalities, payments out of funds like these shall be made. In letter and spirit they require that such payment shall be made only for certain purposes and after certain prerequisites have been complied with; and these are all based upon certain action taken by the society when properly organized in subordination and allegiance to the supreme society. These prerequisites and conditions were not complied with in the disposition made of the funds in this case.

It will not help the defendants to show, as they have attempted to do, that some of the funds went to the same persons and upon the same occasions as they would have gone if the original organization had been preserved. The persons so receiving moneys had lost their right in that behalf by abandoning the organization, and the appropriation was not made in accordance with the by-laws of the association.

It is objected to the right of the complainant to relief that although it was duly incorporated by special act of the legislature, yet it has no authority to collect and retain this money, and a distinction is made between the charter of the complainant corporation (P. L. of 1871 p. 1027) and that of the complainant in State Council v. Sharp, supra. P. L. of 1871 p. 356.

The language of the charter of this last corporation, after giving express power to sue, &c., is this:

“Shall be able and capable in law and in equity to take, purchase, hold and receive to them and their successors, for the use of said association, any lands, tenements, goods, chattels, sum or sums of money by grant, gift, bargain and sale, will, devise or bequeath, from any person or persons whatsoever, and the same to grant, bargain, sell, mortgage, improve or dispose of for the use of the association, and in general to do all things which may be lawful or necessary for the well-being and proper management of the said corporation.”

The corresponding language in the charter of complainant is this:

“Shall and may at all times hereafter be capable in law of having, purchasing, holding and possessing any lands, tenements, héreditaments and personal estate purchased, devised or bequeathed by any person or persons, bodies corporate or politic, capable of making the same.”

I am unable to perceive any material difference in the effect of the verbiage of the one and that of the other. The right to sue is given by the General' Corporation act to all corporations, and it is not too much to say that when these moneys were paid into the treasury of Germania Lodge, No. 50, Knights of Pythias, the payment was, in law, to the complainant as the only corporate entity in existence which could hold the title and protect it. The actual custody and care of the fund was, by the by-laws, entrusted to certain individuals so long as they continued to act as an association in obedience to the laws of the order, but when they ceased so to act their right and power of control also ceased, and the legal title in the complainant at once became paramount.

It is further insisted by the defendants that the complainant fails to show any facts out of which a forfeiture arose, and counsel plants himself upon the ground that the language is that the charter of the lodge must be surrendered by its chancellor commanding, and that there must be some formal suspension of the organization by the superior lodge. But this argument ignores the language of chapter 16, section 328, of the supreme statutes, which enacts that in case a lodge shall from any cause cease to exist, said fund shall revert to the grand lodge within whose domain the lodge is located.”

Besides that, I think that under the other section relied upon by the defendants, to the effect that “A lodge becoming dissolved by the surrender of its charter, its property and effects shall be returned to the grand lodge,” &c., the defendants are estopped from setting up that this lodge was not, to all intents and purposes, dissolved and its charter surrendered. They did all in their power to produce that result, and, in my judgment, they succeeded.

I am of the opinion that the complainant is entitled to relief, and it remains to consider against whom and to what extent.

The individual defendants are thirteen in number. Of these, one was reported, by the sheriff, dead, and one out of the state, against whom no further proceedings have been taken, leaving eleven who were served with process, appeared and joined in a single answer. They are Huff, Rommell, Seelinger, Kirschbaum, Firner, Jansen, Kull, Schonk, Schill, Sonn and Robert Teschke. By their answer they denied every allegation of the bill, and put the complainant on proof even of matters, that were in their own personal knowledge. The only information the eomplainant.derived from the answer is an allegation toward the last, to the effect that

“all the members of the said Germania Lodge, by unanimous consent, divided the funds of said lodge between themselves, share and share alike, as they had a lawful right to do, and that each of these defendants’ shares did not exceed 540, and that each of these- defendants has. long since used up his share for living expenses; that the said division of said fund was made some time before the filing of the original bill of complaint in this suit.”

This statement in the answer is substantially untrue. There was no actual division of the fund, but only a nominal division, and it was made by individuals, not as members of Germania Lodge, No. 50, Knights of Pythias, but of Columbia Kranken Untersturtzen Verein, No. 3.

The evidence shows that Rommell, Seelinger, Firner, Jansen, Schonk, Soun and F. Teschke took an active part in the disposition and handling of the funds of the Germania Lodge, No. 50, and while some of them may not have actually had the money in their personal possession, the disposition of the funds which was made was the result of a common understanding and action. Those defendants must, in my judgment, be held jointly and severally liable for the whole fund. I can find no evidence to implicate Huff, Kirschbaum, Kull, Schill and Robert Teschke, and there will be no decree against them, but as they joined in an answer with the others which failed to disclose the real facts of the case, and as they admitted and claimed that they were among the seceding members of Germania Lodge, No. 50, which authorized, in effect, the action taken by the others, I think they are not entitled to costs.

The bank-book of the Dime Savings Bank, containing a credit of about $400 to Germania Lodge, No. 1, Improved Order Knights of Pythias, was impounded during the hearing, and must be delivered to the complainant, and the defendants must do all acts necessary to enable the complainant to draw the money.

The decree will be for $1,172.25, with interest from February 11th, 1895, subject to a credit for whatever is realized from the Dime Savings Bank.

The complainant is entitled to costs against the defendants individually.