text:
    George H. Macy et al., executors of Oliver S. Carter, deceased, v. The Mercantile Trust Company et al.
    [Filed December 23d, 1904.]
    1. The jurisdiction of the orphans court to pass upon the right of an executor to turn over or appropriate securities for the payment of a legacy, when dependent upon the construction of the will, must be settled in a proceeding' instituted for that purpose on actual notice to all parties interested, and a decree settling the balance due on the final accounts of the executor does not operate as a judicial construction of the will so as to preclude the executor from raising the question of construction in this court.
    2. A will directed the executors to convert the entire estate for the purpose of paying legacies and carrying out its provisions. Paj-ment of the legacies was postponed until two years after testator’s death, the income during that period to be added to the principal. The executors were expressly authorized to reinvest the proceeds of the sale of the estate, in their discretion. The residue of the estate remaining after the payment of certain legacies was to be divided into five equal parts, which were to be turned over and paid to a trustee. — Held, that the investments authorized to be made by the executors pending distribution, as well as the securities which the testator owned at his death, could be divided by them as comprising part of the residue and turned over to the trustee as residuary legatee; and that the division and payment to the trustee were to be made as soon as practicable, but not until after two years from testator’s death.
    3. The executors did not commit a breach of trust by investing in New York City mortgages, and were not bound, at their own expense, on turning the estate over to the trustee, to convert the mortgages into cash, or be responsible for the deficiency; but the trustee claiming that the securities are insufficient, the court should, before directing the investments to be turned over, inquire into and determine their sufficiency as investments of the trust funds.
    Heard on bill, answer and cross-bill, replication and proofs.
    Complainants are executors of the will of Oliver S. Carter, a resident of the county of Essex, who died-June 28 th, 1901. They settled their final accounts as executors in the orphans court of Essex county and on October 17th, 1903, a decree was made by this court on the final settlement and allowance of the account, by which it was decreed that there was a balance in their hands of $2,151,966.22, to be disposed of according to law, from which it was further ordered that sums amounting in the aggregate to $94,934.20 be deducted for the commissions and expenses of administration. It did not appear by the account or decree that the balance remaining in their hands, or any portion of it, was invested in any securities. The entire real and personal estate of the testator had been converted into cash by the executors and' part of the proceeds thereof, to the extent of $1,643,500, was in fact invested by the executors themselves upon bonds secured by mortgages on real estate in the city o'f New York. Bjr the ninth clause of the will the executors, after reserving sufficient to pay legacies'previously bequeathed (amounting in the aggregate to $213,000) and also reserving one-sixth of the residue for payment to testator’s widow (less $35,000 directed to be previously paid), were directed to' divide the residue of testator’s estate into five equal parts, in trust, for each of his four children, and the children of a deceased daughter, and as soon as practicable after his decease to turn over and pay to the Mercantile Trust Company, of the city of New York, the said five equal parts of his residuary estate for the purposes of this trust. These trusts were that the five equal parcels were to be allotted and held by the trust company for the benefit of his said children and the children of his deceased daughter, keeping the parcels separate and apart and paying the income to these beneficiaries during their lives. To each of testator’s daughters and to the children of his deceased daughter the testator also bequeathed, directly, the income from one-fifth part of the residuary estate so set apart and invested for them, respectively, and upon the death of anjr of his daughters or his grandchildren gave the corpus of the share so set apart to the respective heirs of the daughter or grandchild. This clause expressly authorized the trust company “to invest the said moneys representing the said several five parcels of my residuary estate in safé income-bearing securities under the provisions of the statute of the State of New York regulating the investment of trust moneys.”
    The executors have paid over to tire trust company the cash in their hands, amounting to. $319,483.20, and before the commencement of the suit offered to turn over, and now offer by their bill to turn over, the bonds and mortgages in their hands, upon receiving proper releases and refunding bonds. The trust company declined to receive these bonds and mortgages as part of the residuary estate, alleging that in its judgment they are not such investments as are authorized by the statutes of New York regulating the investment of trust moneys. The investments are not, as the trust company insists, made upon property of a class which is in its judgment suitable for the investment of trust funds, and the investment made is also, in its judgment, in excess of sixty per cent, of the fair value of the property mortgaged. It claims that this is the percentage limit allowed by the New York statutes. It therefore declines to assume the responsibility of accepting on its own judgment these mortgages as part of the residuary estate, or to receive them' unless so directed by this court. In its answer the want of power of the executors to make the investments in New York mortgages is not expressly set up as a reason for not receiving the mortgages, but the cross-bill filed with the answer asks that payment to the trust company of the residuary estate under the will may be decreed, and also for a determination whether the investments of the executors were lawfully made and whether it ought to-accept them as proper investments of trust funds. Upon the hearing it was insisted that the executors had no power to make these investments, and must be directed to pay over in cash the balance in their hands as settled by the orphans court. If a conversion of the mortgages into cash by the executors, by sale or otherwise, is required, an expense estimated at from $30,000 to $35,000 will be incurred. No loss, however, has yet occurred in any of the investments, nor has there been any default in payment of interest. Considerable evidence has been taken as to the value of the properties mortgaged, and the expert valuers differ materially as to the valuations. Complainants claim that under the New York statutes the percentage limited for trust investments by the trust company is two-thirds of the value of the property, and not sixty per cent., as claimed by defendants. The loans are in all cases over sixty per cent, of the average valuation now fixed by complainants’ own appraisers. In one or two cases the loan is for fully two-thirds of this average valuation, and the average proportion of loan to value is sixty-five per cent. According to the valuation of defendants’ appraiser- — a thoroughly experienced and competent man — the loans- in all cases exceed sixty-three per cent, of the valuations of the property, and average nearly seventy-five per cent. In his judgment, reached after an examination of all the properties, the properties are of a class not appropriate for the investment of trust funds at over fifty per cent, of their value. They are in the main apartment houses, which are not strictly fireproof, built by contractors and owners for sale, and unless well cared for and managed deteriorate rapidly, and which require constant repairs after the first two or three years. The complainants, on the other hand, claim that the investments are proper investments for trust funds; that under the special provisions of this will these investments by them of the money collected from the conversions of the assets were authorized, and that they may be turned over to the residuary legatee, in lieu of cash, as payment or satisfaction of so much of the residuary legacy.
    The will, so far as material to the present inquiry, was substantially as follows: After directing payment of his debts, funeral and testamentary expenses, as soon after his decease as practicable, the testator directs the payment of $500 to a cemetery association, and then bequeathed by the third and fourth clauses legacies, amounting in the aggregate to $18,500, to his nephews and brother and niece, all severally payable “at the expiration of two years from my decease.” By the fifth clause he bequeathed to his wife $20,000, payable in monthly installments of $2,500 each, commencing at the expiration of thirty days after his death. He then bequeathed to his wife absolutely and in fee (in addition to his household goods) one equal sixth part of all the residue of his real and personal estate, and directed that this portion of his residuary estate should be allotted and paid to her in monthly payments of $1,000 each, commencing one month after the $20,000 had been paid, “and the residue or balance of the said one-sixth share is to be paid to her at the expiration of two years after my decease, if practicable, and deemed best by my executors.” The will then proceeds:

      “Sixth. I order and direct my executors to sell and convert into money the whole of my real and personal estate not hereinbefore specially bequeathed [the furniture, horses, &c.] for the purposes of paying to my said wife the above-mentioned bequests, and for the purpose of paying the various legatees hereinbefore named, and of carrying out the further provisions of this my last will and testament; provided, hoioever, that my said executors and the trustees hereinafter named may permit any portion of my personal estate to remain invested in any of the stocks or other securities in which the same may be invested at the time of my death, and shall not be chargeable with any loss by reason thereof.”
    By the seventh clause a legacy of $10,000 was then given to a grandson, payable out of the residue of the estate, upon his attaining twenty-five years of age, or at the expiration of two years from the date of testator’s death — whichever event should first happen.
    By the eighth clause he gave to each of his four daughters $30,000, also payable at the expiration of two years after his decease, with the provision that if the husband of Mrs. Pelton, one of the daughters, should be living at his decease, her legacy should be invested by the executors in safe income-bearing securities for the payment of the income to' her during her husband’s life, and then to pay her the principal. By this same eighth clause testator gave equally to the two children of his deceased daughter the income of $30,000, which amount he directed his executors to pay as soon as practicable after his decease to the Mercantile Trust Company, in trust, to pay the income to the children or their guardian, until they reached twenty-five years of age, respectively, and then to pay the principal to them, respectively, with limitations over in case of the death of either or both before attaining this age. This'clause specially constituted the trust company a trustee for the purpose of carrying out the provisions of this paragraph of his will, and authorized and empowered the trustee to invest the $30,000 in safe income-bearing securities, under the provisions of the statutes of the State of New York regulating the investment of trust moneys.
    The ninth clause, which is the residuary clause, together with the tenth, which fixed the time of payment of the legacies at two years from his death, with a provision for accumulation of income by the executors, and the twelfth, which authorizes the sale of real and personal estate by tire executors and the reinvestment of the proceeds, are the clauses mainly relied on by the complainants as authority for the investments, and are as follows:

      “Ninth. After reserving sufficient to pay the legacies hereinbefore made and carrying out the foregoing provisions of this my last will and testament, I order and direct my said executors to divide the residue of my estate, of whatsoever name or nature, into five equal parts; in trust, nevertheless, for each of my said children, Kate Louise Macy, Isabel Stanley Phelps, Alice Griffing Ballard and Lucy Estelle Pelton, and a one-fifth equal parcel in trust for the children, of my deceased daughter, Lizzie Coley Bacot.
    “I direct that my said executors, as soon as practicable after my decease, shall turn over and pay to the Mercantile Trust Company, doing business in the city of New York, the said five equal parts of my residuary estate for the purposes of this trust, to wit:
    “The said five equal parcels shall be allotted and held by the said The Mercantile Trust Company for the benefit of my said children, Kate Louise Macy, Isabel Stanley Phelps, Alice Griffing Ballard and Lucy Estelle Pelton, and as to the fifth parcel, for the benefit of the children of my deceased daughter, Lizzie Coley Bacot.
    “And I make and constitute the Mercantile Trust Company a trustee for the purpose of carrying out the provisions of this paragraph of my last will and testament, and I do authorize and empower the said trustee to invest the said moneys, representing the said several five parcels of my residuary estate, in safe income-bearing securities, under the provisions of the statutes of the State of New York regulating the investment of trust moneys, and to pay the income thereof at least annually, and oftener if practicable, to my said several daughters and the children of my deceased daughter Lizzie Coley Bacot, it being intended that the said five equal parcels shall be kept separate and apart, and the income thereof shall be paid to the beneficiary or beneficiaries entitled thereto during the lifetime of such beneficiaries, and I do give and bequeath to each of my said daughters, Kate Louise Macy, Isabel Stanley Phelps, Alice Grilling Ballard and Lucy Estelle Polton, and the children of the said Lizzie Coley Bacot, the income derivable or accruing from the one-fifth parcel of my residuary estate so set apart and invested for them, respectively ; and upon the death of any of my said daughters or my said grandchildren named in this paragraph, I give and bequeath the corpus of the respective share or portion of my said estate so set apart and invested to the respective heirs of such daughter or grandchild per stirpes.

      “Tenth. I hereby direct that none of my estate hereby devised, with the exceiDtion of the moneys heretofore directed to be earlier paid to my wife, shall be paid over to the persons entitled thereto until the exxnration of two years from the date of my death; and my executors shall add all interest, dividends and income that shall accrue up to that period to the capital, and it shall be and form part of my residuary estate.

      “Twelfth. I hereby authorize and empower my executors hereinafter named to sell and convey all or any xiart of the real and personal estate of which I may die seized or possessed at public or iirivate sale, and at such time or times, in such manner and upon such terms and conditions as they, in their discretion, shall deem most advantageous for my estate; and for that purpose to make, execute and deliver all proper deeds therefor, and to reinvest the proceeds of the same, in their discretion. Until my executors sell my real estate they shall have power to collect all the rents, issues and profits thereof, and to rent, lease and manage the same as they may deem best for the interest of my estate.”
    The executors converted the entire estate, and before the expiration of the two years had invested $1,496,000 in eighteen New York mortgages, varying in amount from $25,000 to $200,000. After the two years, and from August 9th to September loth, 1903, they invested $157,500 in four similar mortgages, varying in amount from $15,000 to $66,500. Whether this latter sum was the proceeds of conversions made after the two years does xxot appear.

      Mr. John R. Hardin, for the complainants.

      Mr. Charles L. Corbin, for the defendant Mercantile Trust Company.

      Mr. John J. Hoppin and Mr. Thomas L. Raymond, for the infant defendants.
   Emery, V. C.

. At the hearing of the cause three points were raised — first, whether the trust company as residuary legatee under the will could be obliged, against its consent, to accept any securities for investments made by the executors, instead of cash, in payment or satisfaction of the legacy; and if so, then, second, whether the mortgages were investments authorized to.be made by the executors; and third, whether, if so authorized, they were sufficient securities for the loans made on them.

Being satisfied that the objection to tire sufficiency of the securities was made in good faith, argument upon the first two points was directed, decision upon the question of the sufficiency of the mortgages being reserved for further hearing and order. On the first point — the right of the residuary legatee to receive cash instead of securities — counsel for the trust company raise the preliminary question whether the right to turn over anything except cash is not concluded .against the executors by the decree of the orphans court on the final accounting finding a balance in money due from them. Under the statute, Orphans Court Revision, 1898, § 127 ; P. L. of 1898, p. 761, this decree is conclusive upon all parties. By this decree a balance of $2,151,966.22 was decreed to be in complainants’ hands, to be disposed of according to law, after deducting the expenses of administration. The fifth rule of the orphans court requires executors who hold funds by virtue of the direction of a will to state the securities in which the estate is invested, and if this statement of the securities in dispute has been annexed to the final account, the question of the right of the executors to make them may, in some cases, be regularly adjudicated by the orphans court on an exception to their allowance. In Tucker v. Tucker, 33 N. J. Eq. (6 Stew.) 235 (Runyon, Ordinary, 1880), an investment of estate funds in city bonds and bank stock, made by an executor on his own judgment and without authority of a competent court, was disallowed on the settlement of the final account. But in this case no construction of the powers of investment under the will was involved, and where the right to turn over or appropriate securities for the payment of a legacy depends upon the construction of a will, the jurisdiction of the orphans court to decide the question must depend on the act of 1872 (P. L. 1872 p. 47), incorporated in the general statutes (p. 2891) as section 151 of the Orphans Court act, and now section 173 of the Orphans Court act (Revision of 1898; P. L. of 1898 p. 781), authorizing distribution in accordance with the will. This power of the orphans court to construe wills for the purpose of distribution was affirmed by Chancellor Runyon, in Hill v. Bloom, 41 N. J. Eq. (14 Stew.) 216 (1886), but no question as to tire constitutionality of the statute appears to have been raised, and subsequent decisions hold this question to be still an open one. Adams v. Adams, 46 N. J. Eq. (1 Dick.) 298 (Court of Errors and Appeals, 1889); Stevens v. Dewey, 55 N. J. Eq. (10 Dick.) 232 (Vice-Chancellor Pitney, 1897). These later cases further hold that a decree settling the balance due on final accounts, on the usual notice, is not an exercise of this jurisdiction to construe the will on application for distribution, but that this question must be settled upon a proceeding for that purpose, with actual notice to all parties interested. The decree of the orphans court settling the balance in the executors’ hands did not therefore decide that this balance, under the will, must be paid in cash, and the will must now be construed on this point. In the absence of any directions in a will as to the time or manner of the payment of the residuary legacies, tire general rule is that the residuary legatee has a right to insist that before the end of the first year after testator’s death the executors shall, if possible, convert all the assets into money, pay the debts, funeral and testamentary expenses, and hand over the clear residue to the residuary legatee. 2 Wms. Ex. *1454- The legatee, residuary or other, may, however, in satisfaction of his legacy, consent to accept securities from the executors, whether held by them for conversion under the general rule for settlement or under special directions of the will. Such acceptance by the legatee is considered as practically a conversion and sale by the executor and a distribution of the proceeds by the executor. In re Beverly, 1 Ch. Cas. 681, 684 (1901). These general rules as to the right of the residuary legatee to require conversion of securities by the executors and payment in cash are controlled, however, by the directions of the will. In this case they have been so modified, and the question is whether, upon a construction of the whole will, it was intended by the testator that their own investments, of the proceeds of conversion of the estate might be turned over by the executors to the residuary legatee as part of the residue, if the executors did not convert them for distribution, or whether the executors were required to- reconvert for distribution. The powers expressly given to the executors for the conversion and investment of the estate pending distribution are here very, large. By- the fourth clause they are directed to convert the entire estate for the purpose of paying the legacies and carrying out the provisions of his will; by the tenth clause they are directed to postpone payment of any of his estate (except the monthly payments to his wife) until two years after his death, and to add the income up to that period to the-capital of the residue. A direction for accumulation of interest has been held to imply a .direction to invest for that purpose. Fowler v. Colt, N. J. Eq. (10 C. E. Gr.) 202, 206 (Chancellor Runyon, 1874). But the twelfth clause, after authorizing the conversion and sale of his entire estate, or any part thereof, real and personal, to be in such manner as the executors deem advantageous, gives them express authority to reinvest the proceeds of sale in their discretion. Being thus directed or authorized to convert the entire estate, to invest the proceeds of sale at their discretion, and to accumulate the income for two 3ears, they are directed by the ninth clause, after reserving sufficient to pay the legacies and the one-sixth of the residue given to the wife, to divide the residue, “oí whatsoever name or nature, into five equal parts,” and “as soon as practicable after my decease to turn over and pay the said five equal parts of my residuary estate to the Mercantile Trust Company,” in trust. The intention that the executors might divide securities as well as money expressly appears in the fourth clause, which authorizes the retention and division of the investments made by the testator, and the words “turn over,” which certainly include these investments, also naturally apply to and would include as well authorized investments made b3r the executors. The authority to divide securities and pass them over to the trustee, given by these words "turn over,” although specially applicable to the securities held by the testator, cannot be confined to them, in the absence of any indication that the testator so restricted their application. I think it was the intention of the testator, gathered from the whole will, that the investments authorized to be made by the executors, pending distribution, might be divided by them as comprising part of the residue and turned over to the residuary legatee. The trust company contend that the legacy of the residue to them was not postponed for two years, but that it was payable as soon as practicable, Under the ninth clause; that the conversion of the estate made immediate payment practicable, and therefore, as to them, no reinvestment by the executors was authorized. But the tenth clause, directing that none of the testator’s estate (except the. gifts which áre directed to be earlier paid to his wife) shall be paid to the persons entitled thereto until after the expiration of two years from the dato of his death, apparently applies to all payments of the estate, including the payments to the trust company as residuary legatee. Taken in connection with the other provision of this clause that the executors (not the trust company) are to receive the income in the meantime for the accumulation of capital for the residuary estate, and with the further fact that by the fifth clause the balance of the wife’s share (one-sixth) of the residue is not in any event payable until after two years, and then only if practicable, I think the tenth clause must be held to qualify the previous independent direction for payment to the trust company as soon as practicable, and that construing all the provisions together the direction is to divide and pay over the residue as soon as practicable after testator’s death, but not until after two years, and that in the meantime the executors must accumulate the income to form part of the residue to be divided at the 'end of two years, if practicable, between the widow and the trust company. The executors were further expressly authorized by the twelfth clause to sell and convert' all testator’s 'estate and to invest the proceeds at 'their discretion, and it is not possible, I think, to reconcile these express powers of investment of proceeds of sale, in connection with the direction of the ninth clause, to accumulate the income for two years as part of the capital of the residuary estate, with the contention now made by the trust company that the deferred payments in the tenth clause referred only to the legatees beneficially interested, and that the payments to it as residuary legatee under the ninth clause were to be made as soon as practicable after testator’s decease, and before the expiration of the two years, and were not to be held at all for investment by the executors. Upon the first point I conclude, therefore, that on the scope of the whole will the executors, for the purposes of conversion and accumulation, were to hold the entire estate for at least two1 years, and that they were then to divide the residue if practicable. They also had power to invest tire proceeds of all the estate for accumulation of capital during that time, and in dividing the residue they had the right to divide and turn over, in satisfaction of tire residuary legacy, authorized investments made within the two years, and were not required to convert all their reinvestments into cash for the purposes of division.

The second question is whether the investments in New York City mortgages were investments of an authorized character. The investments being first mortgages on real estate (and for present purposes being considered as safe and sufficient security for trust investments), the question is whether the investment is illegal and unauthorized merely because the lands are not situated in this state. No statute or decision of our courts has yet established this hard and fast rule. In McCullough v. McCullough, 44 N. J. Eq. (17 Stew.) 313 (Chancellor McGill. 1888), an application was made by trustees for instructions as to investing on lands in Minnesota. Such investment was disapproved, but the disapproval by the court was based on consideration* of all the circumstances of the case and of the security of all the parties interested. It was not refused because it was in itself and in any event illegal or unauthorized. No later or other decision in New Jersey has been referred to. Ormiston v. Olcott, 84 N. Y. 339 (1881), which was referred to with approval in the McCullough Case as to the objections to such investments, expressly declines to hold that such investments are necessarily illegal (at p. 343), and goes no further than to declare the general rule to be that investments beyond the juris-' diction of the court should not be sustained unless in rare and exceptional cases, and under very unusual and peculiar circumstances. This rule, it is further said, should not be made arbitrary and inflexible, and so rigid as to admit of no possible exceptions, for it is merely an outgrowth or consequence of the broader rule that a trustee, in making investments, is to employ such diligence and such prudence as in general prudent men of discretion and intelligence in such matters employ in their own like affairs. The statute relating to investments by executors and trustees expressly recognizes the general rule that loans on real estate by trustees should be such as a reasonable and prudent investor, dealing with his own funds, under the like circumstances, would require. P. L. of 1902 ch. 240 p. 700. There are exceptional circumstances in this case, which should make the court hesitate to conclude that mortgages on lands in New York City are unauthorized investments. The estate was very large. In the fair discretion of the executors some of the investments must probably be large, and unless mortgages were excluded altogether such loans were not readily procurable except in a large city. The testator (a New York banker), for a long time president of one of the leading banks, contemplated New York investments of his property as one of the methods of permanent investment, and expressly authorized the permanent trustee to malee them. It cannot be said, therefore, that New York City mortgages were not contemplated for some portion of the permanent investment. The executors made these investments for the purpose of turning them over to the New York trustee, to hold as part of the permanent investment, and while the executors were not, as was the trustee, specially authorized by the will to make them, and therefore cannot take any addition to their powers by1' the powers given to a trustee specially selected and authorized to make New York investments, yet this fact that the trustee was authorized to hold such securities, if they were sufficient, and the further fact that the character- of the investment to be made by the executors pending division was expressly left to their discretion, are entitled to very great weight in determining the legality of the investment. I cannot sayr, under these exceptional circumstances, that the executors committed a breach of trust by investing at all in New York City mortgages, and that they must at their own charges convert the mortgages into cash or be responsible for the deficiency. Where ’the security taken is unauthorized, the trustee incurs this liability to make good the fund as a necessary consequence. Tucker v. Tucker, supra; In re Salmon, 42 Ch. Div. 351 (C. A., 1889), Lord Justice Cotton (at p. 367). But where the security, although authorized, is insufficient, the situation is different, and the rights and liabilities of the executors and the residuary legatee in trust'depend on additional considerations. The executors now hold the securities to turn over for a permanent trust fund-for the benefit of life tenants and remaindermen, some of whom are infants or not yet in being, and apply to the court for directions as to turning them over. The trustee who is to receive the securities for this purpose alleges that the securities, 'even if authorized, are not sufficient, and in view of this objection the court should not direct that the investments be turned over to the trustee without further inquiry, but should inquire into and determine their sufficiency as investments of the trust funds. The question of sufficiency is a very important one, for the division of the residue into five equal parts, turning over to each part its proportion of mortgages, is to be made by the executors, or, they having failed to malee the division, by the court. This division is the final appropriation for each share, as the trust compairy, under the will, only allots the shares after receipt and keeps them separate. The loss on any mortgage turned over in part payment of a share will therefore be a loss on this share alone. The cause is not ready for final disposition in this respect and it will therefore stand over for further hearing and directions after declaration that investments made before the expiration of the two years in New York City mortgages were not of an unauthorized character. I will also hear counsel as to the decree to be made in reference to investments made after the expiration of the two years, as this point was not specially referred to either in the arguments or briefs.


source: Caselaw Access Project

author: Emery, V. C.

license: Public Domain

text:
    Adam H. Groel v. United Electric Company of New Jersey et al.
    [Filed December 29th, 1904.]
    1. Where a decree in the nature of a personal decree is sought against a foreign corporation, it may raise the question of jurisdiction by plea.
    2. A special appearance, entered for the sole purpose of objecting- to the jurisdiction of the court, will not be stricken out because filed without any special leave or order of the court.
    On motion to strike out special appearance and plea to jurisdiction filed by the United Gas Improvement Company, one of the defendants.

      Mr. Edwin G. Adams, for the motion.

      Mr. Richard V. Lindabury, for the defendant.
   Emery, V. C.

The bill seeks a decree in the nature of a personal decree against the company which has filed a plea to the jurisdiction, setting up, in substance, that it is a non-resident corporation, not served with process in the suit, and not subject to service of process within the state, and that no decree against it for the relief sought can therefore be made. On filing the plea a separate formal written appearance for the company, “specially for the sole purpose of objecting to the jurisdiction of the court,” was signed and filed by solicitors of the court, but without any special leave or order of the court. The plea is introduced by the statement that the company appears by its officers for the sole purpose of objecting to the jurisdiction of the court, and for no other purpose. Complainant now moves to strike out the special appearance, because it was filed without leave of the court, and also to strike out the plea for irregularity, inasmuch as it depends upon the previous irregular or unauthorized appearance. The regularity of a plea of this kind, for the purpose of questioning the jurisdiction of the court upon the facts set out in the plea, is settled by the decision in Wilson v. American Palace Car Co., 66 N. J. Eq. (20 Dick.) 730 (Court of Errors and Appeals, 1903). The regularity of a plea to the jurisdiction on similar facts, in an action at law, was affirmed in Camden Rolling Mill Co. v. Swede Iron Co., 32 N. J. Law (3 Vr.) 15 (Supreme Court, 1866), the position of the defendant being considered analogous to, or identical with, that of defendants, who, under the English common law practice, are privileged against all suits, except within a particular jurisdiction, and who are entitled to enforce this immunity by a plea to the jurisdiction. Mr. Justice Dixon’s opinion, in Wilson v. American Palace Car Co., supra, also proceeds upon the view that in suits where personal decrees are sought against an3 defendant, an immunity from jurisdiction in tire courts of any state where service of process cannot be obtained is given by the federal constitution. The defendant being thus entitled to present tire question of jurisdiction by plea, the first question is whether any formal appearance of airy kind, other than that made by the filing of the plea itself, is necessary, in order that the plea may be heard. A previous independent formal appearance of some kind was necessary under the English practice, because an appearance (entered either by defendant or by complainant for him under the rules) was considered necessary for the subsequent proceedings to procure an answer and for decree. 1 Dan. Ch. Pr. (6th Am. ed.) *536. Under our statutes and practice, which is the general American practice, appearances are not now necessary in order to compel answer or for decree. In the American practice, the previous formal appearance by defendant has not, therefore, been generally considered essential to the regularity of a demurrer or answer or other pleading, and the pleading itself has been considered a sufficient formal appearance to justify the court in proceeding to hearing upon it. In State of New Jersey v. State of New York, 6 Pet. 323 (1882), Chief-Justice Marshall, on the objection.that no appearance had been entered, considered the demurrer an appearance and that no other appearance was necessary. In Eldred v. Bank, 17 Wall. 545 (1873), Justice Miller said (at p. 551) the filing of a plea was considered a sufficient appearance, and on its withdrawal defendant was considered as being still in court. In Livingston v. Gibbons, 4 Johns. Ch. *94, an answer upon which decree was entered without formal appearance was considered an appearance. In Albert v. Clarendon Company, 53 N. J. Eq. (8 Dick.) 625, Vice-Chancellor Van Fleet said that a general demurrer would be an appearance, but the point now considered was not raised in the case. Other'authorities are referred to in 1 Dan. Ch. Pr. (6th Am. ed.) *536, note 2. At common law, the plea of immunity from jurisdiction was in the nature of a plea in abatement and was presented in person and not by attorney and was made apparently without any other appearance than by tire plea itself. 1 Chit. Pl. 411, 444; Blake v. Jones, 7 Mass. 28 (1810); Gardner v. Barker, 12 Mass. 36, 39 (1815). Independent of statute, therefore, I think the plea itself in this case is an appearance for the purpose of the hearing on the plea. But our Chancery act, section 3 (Revision of 1902, P. L. of 1902 p. 511), directs that the subpoena must contain a notice “that the defendant is not required to appear in person on the return day; but, if he intends to make a defence, it is only necessary for him to answer, plead or demur to the bill within the time required by law.” There is no rule or decision since this statute was originally passed (P. L. of 1867 p. 166) requiring the entry of a formal appearance before a plea or demurrer can be filed, and, in view of tire statute, I doubt whether such additional' formal appearance could now be required as a condition of making defence. Certainly, a plea, answer or demurrer, filed by defendant in person without previous formal appearance, would seem to be regular under this statute. The plea in this case is taken under the common seal of the corporation, after being signed by its vice-president, and it may, therefore, stand as in itself an appearance sufficient for the purpose of the hearing and cannot be stricken out because of the supposed irregularity of the previous formal appearance. Where no appearance by plea, demurrer of answer has been made, a formal appearance by a defendant, either general or special, may be necessary fof the purpose of making or opposing motions in the cause, and it is in tírese cases that the court fixes the condition of appearance. The conditional appearances under the English practice seem to have been based on the necessity of an appearance as the basis for any subsequent proceedings in the suit and are not applicable if my view of our statute and practice is correct. Neither should the special appearance be stricken out. If the limitation of the purposes of an appearance is not authorized, except by special order of the court, then the real question arising on such entry relates to the effect of the appearance as'entered, with this attempted limitation of its purpose by the solicitor without authority. This question may arise if the plea to the jurisdiction be overruled and further proceedings in the cause be taken by complainant. As the case stands at present, it must be disposed of on a plea to which the appearance as limited or attempted to be limited certainly extends, and the motion must be denied. Reaching this conclusion, I have not considered the effect of complainant’s amending his bill after tire plea was filed. This is a matter to be disposed of on the whole record, either on the hearing of the plea or after determination upon it.


text:
    William S. Righter et al. v. Helen Maria Winters et al.
    [Filed January 26th, 1905.]
    1. A bay-window, built up from a foundation wall, must be considered as the house, within a building restriction covenant.
    2. Where the first story of a building is on the building line, within the restriction of a deed, the projection of the second story two feet beyond the first story, and of the third story two feet nine inches beyond the second story, violates the building restriction.

      3. Where both complainant and defendant misconstrued the building-line restriction in the deed as to the projection of bay-windows and upper stories, and bay-windows and upper stories of other buildings in the block project over the building line to some extent, and no property owners in the block except complainant, defendant’s grantor, object t'o defendant’s building whose bay-window and upper stories project beyond the line, such projection will not be restrained by a mandatory injunction, but complainant will be left to his remedy at law for damages.
    Heard on bill, answer, replication and proofs.

      Mr. John A. Miller, for the complainants.

      Mr. Edwin G. Adams, for the defendants.
   Emery, V. C.

This is a suit to enforce the building restrictions contained in a deed made by complainants to the defendant, Mrs. Winters, and a Mrs. Coates, for a lot twenty-five by one hundred feet on the eastern side of Clifton avenue in the city of Newark. Mrs. Coates subsequently conveyed her interest in the premises to Mrs. Winters by a deed containing the same restrictions. The building restrictions in question were

“that for the space of twenty years from the date hereof [March 14th, 1899] no dwelling-house shall be built on said premises to cost less than four thousand dollars: that no house or houses shall be built thereon unless placed back at least fifteen feet from the easterly line. of said Clifton avenue, and on a terrace two feet in height above the easterly line of said avenue in front of same.”

Defendants have erected a frame dwelling-house on the lot with a frontage covering nearly the whole front of the lot. The foundation of the southerly wall of the 'house extends to a point about twelve feet ten inches from the easterly line of Clifton avenue. From this southwesterly corner of the house a hay- ■ window projection on a foundation wall is constructed, and the centre of the bay-window is ten feet eight and a half inches from the street line. The foundation wall of this bay-window is the only foundation wall of the house at this point. The-northerly end of the bay-window is in a line with the southerly end and twelve feet ten inches from the easterly street line. The front wall of the house at the northerly side of the bay-window then recedes two feet to a point fourteen feet ten inches from the street, 'and from this point the foundation wall of the house to the north side of the house (a distance of about eight or nine feet) is fourteen feet ten inches from the line. The house is two stories high, with a story in the gable roof, fronting the street. The bay-window is carried to the roof at the top of the second story. No part of the front of the house above the first story is farther from the easterly line of the street than twelve feet and ten inches, and the second story projects for two feet over that portion of the first story, which is on the fourteen-feet-ten-inch line. The recess of two feet on the first story north of the bay-window is part of the piazza, which is constructed in front of the whole house and extends to within six or seven feet of the street line. On the third story the house projects two feet nine inches beyond the second story and to within about ten feet of the street line. From the manner in which this house is constructed, I think there can be no question that the bay-window and the entire front of the building must be considered as “the house” within the meaning of the restrictive covenant, and that to the extent to which the bay-window or the second or third stories project beyond the foundation wall, fixed at fourteen feet ten inches from the line, they are violations of the covenant. In Kirkpatrick v. Peshine, 24 N. J. Eq. (9 C. E. Gr.) 206 (Chancellor Runyon, 1873), a bay-window, one story high, built up from the foundation wall, extending beyond the restrictive line, was held to viólate a covenant that the main front wall of the house should be on this line. For the purposes of this suit, the deviation of two inches in tire foundation wall is not substantial, as it appears from the location of the other houses on the block, which are part of the same estate and subject to the same restrictions, that a variation of one or two inches in the location of the front wall seems unavoidable. The main question in this case is whether, notwithstanding this violation of the restrictions, there should be a mandatory injunction, requiring the removal of so much of tire defendants’ building as is within the restrictive line, or whether complainants should be left to their remedy at law. Ordinarily, and in the absence of special circumstances, restrictions of this character are specifically enforced between grantors and grantees without regard to the question of damage. Kirkpatrick v. Peshine, supra. But the circumstances which appear in this case except it from the operation of the rule. Complainants, who owned an entire block on the easterly side of Clifton avenue, between Third avenue and Bloomfield avenue, after reserving a lot on the comer of Bloomfield avenue for a church, laid out the remaining portion into twenty building lots, about twenty-five feet front each, and offered them for sale. The erection of a good class of dwelling-houses for residence purposes only was contemplated, and the restrictions in defendants’ deeds have been included in all of the deeds for these lots sold by complainants. Defendants, on applying for a lot, were informed of the restrictions as restrictions imposed, or to be imposed, on all the lots on the block for sale by complainants. On the evidence, both of complainants and defendants, there is no doubt that the restrictions were, intended as part of a common building scheme for the benefit of the purchasers of lots and of the vendors’ lots remaining unsold to secure uniformity or symmetry of plan for a block of houses. At tire time of defendants’ purchase only one house, seventy-five feet distant and on the third lot (No. 301) north from defendants’ lot (No. 295), had been erected. The main foundation wall of this house was about, but not exactly, fifteen feet from tire street line, but from the foundation wall and as part of it, a three-sided bay-window projected two feet — tire foundation of this bay-window being part of the foundation wall of the house. The entire second story of this house on No. 301 projected at least two feet within the restrictive line, and the third story, a gable story fronting the street, projected to within eleven feet two inches of the street. At the time of tire purchase defendants’ attention was called to this house by Mr. William Righter (who acted for the complainants) as being according to the restrictions, but whether he then alluded to any other restriction than the cost and general appearance of the house is a fact in dispute. Several other-lots were subsequently sold and built upon before defendants built their house. Every one of the houses on these lots was built with the front main foundation wall of the house (not including the bay-window) located within the restrictive line by a distance varying- from two to six inches, and, as part of the front foundation wall, each of the houses (eight in number) built before defendants built their house, has a bay-window built on the foundation wall projecting beyond the restrictive line an average distance of a little over three feet. Most of the bay-windows run up to the third story. Another house (on lot 287), built about the same time with defendants, and two others, on lots 289 and 299, built since, have substantially the same bay-window projection inside the restrictive line. The main difference between defendants’ house and the other houses on the block, and the_ difference as to which complaint was made to them by Mr. Righter while their house was being constructed, is that the bay-window of their house is substantially the entire front wall of that part of the house and that the southern wall of their house projects about two feet beyond the southerly wall of the other houses and beyond, the line actually established as the main front wall line of the houses. Defendants’ bay-window, at its centre, however, projects only about one foot beyond those of the other houses, but in all of the houses, except defendants, the bay-window structures begin a foot or more from the southwest corner of the respective houses and are structures which, if considered as part of the houses, bring the main front wall of all the houses substantially nearer the street than the fifteen-foot line. All of the houses are built upon terraces and have elevated, roofed piazzas extending across the front of the houses to the bay-windows and to within an average distance of about seven feet from the street line. The bay-windows and piazzas have been built, and allowed to be built, not with the intention of violating the covenant, but because both the vendors and purchasers have apparently treated the covenant as not applying either to the bay-windows or the piazzas built beyond the main wall established on the fifteen-foot line, and have not considered these projections as part of the houses within tire meaning of the covenant. Under these circumstances it would not be equitable to enforce the covenant ágainst the defendants according to its terms as now construed by the court, and to require them to remove all the front of their house, including tire bay-window, which is beyond the fifteen-foot line. And not being thus enforceable, the question is whether the complainants are now entitled to specifically enforce the covenant against the defendants in the sense or with the meaning of the covenant as so construed and acted on by the complainants and the lot owners other than defendants. The objection to the enforcement of the covenant according to this practical, but, as I think, erroneous construction, is that the present defendants have not adopted or acted on the construction of the covenant adopted by the other lot owners and tire complainants, and, in my judgment, the rights of complainants against them must, therefore, depend solely on the covenant or agreement made between the parties, which must be now construed by tire court, and the covenant, if specifically enforced, must be enforced according to its terms as so construed and not otherwise. When the rights of tire parties depend solely on the contract, and it is possible for tire contract to be specifically enforced, according to its' terms, I do not understand that the court can direct performance .except on the terms specifically agreed upon. The court has no right or power to make another or different contract between tire parties and then decree specific performance of it as so altered. The only covenant or agreement between these parties is the covenant in the deed, and the enforcement of it.in equity must be in ioto and as construed by- the court, not as construed and acted upon by the complainants and purchasers other than the defendants. Its enforcement according to its terms, as' construed by the court, would require the removal of all of the house beyond the fifteen-foot line, including at least the bay-windows and the projections • of the second and third stories. Defendants’ structure has not destroyed or substantially affected the general symmetry' of the block of houses, and in view of the manner in which the block has been built up — with projecting bay-windows and piazzas to all the houses — such enforcement' would be clearly inequitable. And as the covenant must, as between the-present parties, be so enforced, according to its terms, if' at all,ft results that specific performance must be denied and complainants must be left to their remedy at law. Had the structures been such as to impair seriously or substantially the general symmetry or uniformity of plan established by the actual building of the block of houses under the restrictions, it might not have been inequitable to enforce the contract between the parties according to its terms and to the extent of requiring the removal of the entire forbidden structures. For the entire contract, as to restrictions, cannot be considered as waived or abandoned by reason of the violations which have occurred, not with the intention of abandoning the contract, but under what is now held to be an erroneous view of the covenant by the vendors and the previous builders of houses. For another reason the remedy at law, rather than in equity, should be resorted to in this case. The projection of the southerly side of defendants’ house for two feet beyond the line is or may be a special damage or annoyance hr tire lot owners on the south (Nos. 271 to 293' — twelve lots), and apparently to ■them alone. Complainants have sold ten of these southerly lots and now own only two vacant lots, neither of which is within two hundred feet of defendants’ house. Nine of the ten lots have been built on. The owners of most of these lots to the south have been examined as witnesses for tire defendants and say they have no objection to the defendants’ building. The owners of the house next adjoining on the south have not appeared here to object, and the defendants swear that they have a letter from these owners, stating that they have no objection to the location of the house, and the complainants are the only owners who have objected to the building. Their lots are held for sale, and in view of this expression of opinion of the owners of houses on the block it is safe to conclude that the salable character of the lots still unsold has not been so affected as to make tire remedy at law for damages inadequate.

Since the commencement of this suit complainants have divided between themselves the unsold lots, and two of them own the vacant lot (No. 297) next adjoining defendants’ house on the north. The projection of the second and third story of defendants’ house beyond the fifteen-foot line may possibly affect a house if built on this lot within the line, but in view of the fact that several other houses built on the block have similar projections in the upper stories, although not so great, and also 'that the objection made to the defendants while building their house related to the bay-window construction and not to these projections, I think the complainants, or such of them as are affected thereby, should also be left to their remedy at law for these violations of the covenant. The bill will be dismissed, but I will hear the parties as to costs before signing the decree.


text:
    William Naughton v. George W. Elliott.
    [Filed January 30th, 1905.]
    1. Parol evidence which tends to vary the description of a lot in a lease is inadmissible in locating the boundaries.
    2. Where a contract uncertain in its terms has been acted on and partly performed, the court, in order to relieve the objection of uncertainty, will, for the construction of the instrument, have regard in some cases to the use and course of dealing of the parties, to the surrounding circumstances, and to their conduct between the making of the agreement and the commencement of the suit.-
    3. The lease of a lot contained an option to complainant to purchase. The boundary line on one side of the lot was irregular, and from the description in the instrument it was uncertain hoW much of the lot was included in the option. Complainant exercised the’option and claimed the entire lot and sought specific performance. ' The evidence showed that if there was any mistake in the description it was made by the defendant, and that the complainant understood the entire lot was included, and, with such understanding, arranged the buildings on the lot. — Held, that the conveyance of the entire lot should be decreed.
    Heard ou bill, answer, replication and proofs.

      Mr. Frederick W. Hope and Mr. James F. Degnan, for the complainant.

      Mr. William J. Leonard, and Mr. Richard V. Lindabury, for the defendant.
   Emery, V. C.

This is a suit for the specific performance of an agreement or agreements to convey lands and is brought by the purchaser against the vendor. The first question -which arises under the ¡headings and proofs relates to the boundaries of the lot to be conveyed. The defendant owns a lot on the corner of Ocean avenue and New street, in the borough of Seabright, and executed two papers to the complainant, both drawn by himself, relating to the lease and sale of the lot. The first was an agreement, dated February 11th, 1899, for the sale to defendant of the buildings then standing on the lot in connection with a lease of the premises and an option to purchase; and the second was the lease subsequently -executed on May 15th, 1899, which contained an option to purchase. In the first agreement the buildings are described as standing “on my lot on corner of Ocean avenue and New street," and the “said lot" is to be leased and sold. In the lease itself the lot is'described as being-on the “northwest corner of Ocean avenue ancl New street, said lot having a frontage of thirty-one and a half feet on Ocean avenue and at least one hundred ancl four feet on New street," and the option given in the lease is to purchase “tire lot .or premises hereby-leased." While the lease gives two lines only,. the whole lot owned by defendant is an L-shaped lot, the rear of tire -lot, on New street, being for about thirty-seven and one-half feet wider by twenty-five feet than the front portion of the lot. Complainant claims that the entire lot was leased and agreed to. be sold, while defendant claims that the portion of the lot intended to be leased or. sold was a rectangular lot, thirty-one and one-lralf feet on Ocean avenue and one hundred and four feet on New street, and further that the one hundred and four feet on New street is to be measured from a corner of the1 lot designated in the deed conveying the premises to him, and that, as so located, there was reserved from his entire lot on the corner, and from the operation of the lease and agreement to sell, a strip on the rear of the lot about eight feet in width, together wi£h the rear of the “L,” about twenty-live by thirty-eight feet. At the time of the first agreement (February 11th, 1899) the buildings on the premises were a building, used as a hotel or saloon, about twenty-five feet square, located on the corner, and a barn on the rear of the lot. This barn fronted on New. street and was about thirty feet in width on New street and was located within.a few inches of the rear line of the lot; its depth, taking in an addition or lean-to at the rear, was about fifty-four feet, and, with the lean-to, the barn covered practically the entire rear of the lot. The bam was moved to this location by one of the defendant’s former tenants, named- Eeese, and originally had been a building about two stories or one and a half stories high and about thirty feet square. The addition or lean-to to the barn on its north side was built by one Zigler (or Sigler) the tenant, whose administrator sold the house and bam to the defendant. This addition was a one-story structure, connected with the barn by opening or sliding doors, and was used for stalls for horses. In the bill of sale, by which defendant purchased the buildings for $425 from the administrator, they were described as “all that certain house and barn erected and being on leased ground on west side of Ocean avenue, at Seabright, Monmouth county, known and called ‘Eeese’s Saloon.’ ” About the time of his purchase of the lease and buildings the defendant made the agreement with the complainant, dated February 11th, 1899, in his own handwriting, by which, in consideration of $175 received from complainant, he agreed

“to give to the said Naughton a bill of sale of the buildings now standing on my lot on corner of Ocean avenue and New street, Seabright, N. J., formerly owned and occupied by Arthur M. Sigler and wife; also a lease on same lot expiring on the eleventh day of November, 1899. I also agree to renew the lease for the said lot, at a rate of $650 per year, for three years, ending November 11th, 1902; also, will give said William Naughton privilege of purchasing said lot. at $4,000 at the expiration of the lease as above.”

Upon the execution of this agreement, and before the execution of any other paper, the complainant (Naughton) entered into possession of the premises, including the whole lot and all of the buildings thereon. On May 15th, 1899, the defendant delivered to complainant two- other documents, also- written by himself. One was a bill of sale for $425 for

“all that certain house and barn, erected and being on leased ground on the northwest corner of Ocean avenue and New street, borough of Sea-bright, N. J., known and called ‘Reese’s Saloon,’ the same being property conveyed to Elliott by Hirschfield, admr. of Sigler, on February 17th, 1899.”

The other document was a lease to November 11th, 1902, in which the premises leased were described as being

“all that certain lot, tract or parcel of land, premises, situate in the borough of Seabright, * * * on the northwest corner of Ocean avenue and New street, said lot having a frontage of thirty-one and a half feet on Ocean avenue, and at least one hundred and four feet on New street.”

In the lease it was further agreed that Naughton “shall have the privilege of purchasing at the expiration of the lease the lot or premises herein leased and described for the sum of $4,000,” and Elliott agreed “that at the expiration of the entire term, upon the said William Naughton paying to him the sum of $4,000, he would give a warranty deed, giving title to said lot,” and the lease was not negotiable or transferable. The defendant now claims that the lot leased and intended to- be sold, as described in this lease of May 10th, 1899, was not the entire lot then occupied by the buildings, nor his entire lot on the corner, but was only a rectangular lot, fronting thirty-one feet six inches on Ocean avenue and one hundred and four feet on New street. He further claims that, for the purpose of locating the line of the leased lot on New street, the corner or beginning point is not the line of the hotel building, as it tiren stood on the- building line of Ocean avenue, but is tire corner of Ocean avenue, as it existed when defendant himself purchased the property, in June, 1886, and before the avenue was widened, in 1881'. If the line of the leased lot of one hundred and four feet on New street begins at this former line of Ocean avenue, and the lot leased is only a rectangular lot, then there will be reserved to the defendant from the entire lot a strip of about eight feet in width at the rear of the lot, together with 'a lot twenty-five by thirty-eight feet in the “L” extension. Defendant says that this rectangular lot, reaching only to within eight-feet of the rear of his lot, is the lot which he leased, and which he intended to lease- and to sell, and he now offers to execute a deed for this rectangular, so described, lot. Complainant claims that he is entitled -to a deed for tire entire lot and refuses to accept the deed tendered by defendant. The question of boundaries depends, in the first instance, on the proper location of the corner or beginning point for the line of one hundred aird four feet along New street, as described in the lease. It appears that in the deed conveying the lot to the defendant it was described as a lot

“beginning at the northwest corner of Ijong Branch and Seabright turnpike [now Ocean avenue], as it was laid out and existed on the 25th day of December, 1SS1, and a new street running westerly along the north side of said street 112 feet G inches,” &c.

After the date- of this deed, and in 1887, Ocean avenue was' widened about seven feet at this point. In June, 1891, a fire destroyed all the buildings in this vicinity, and on November 11th, 1891, the lot being unimproved, defendant leased to one George A. Reese, for five years, at a rental of $250 per year, a tract of land on the corner by the same description as that now contained in the lease to complainant, “said lot having a frontage of thirty-one and one-half feet on Ocean avenue and at least one hundred and four feet on New street,” with tire privilege of purchasing the leased premises for $3,000 during or at the end of the term, and Reese agreed on the execution of tire lease to place on tire front part of the lot a two-story frame building. The present permanent building line on Ocean avenue was established after tire fire, and Reese moved a frame building on the lot, locating it about twenty feet from the front of the lot, and used it as a saloon. About two years after the execution of the lease, Reese moved to the lot a barn owned by him, locating it at the rear of the lot and within a few inches of the westerly line of the lot. The bam was a two-story frame building, about thirty feet square, and, as located by Reese, did not extend farther back from New street than about thirty feet, but it cut off access to the portion of tire “L” in the rear. Reese occupied the house and barn until his death — before the expiration of tire lease- — ■ without exercising the option to purchase. His widow continued the same occupation as tenant without any additional lease until November, 1897, one year after the expiration of Reese’s lease, and having married one Sigler (or Zigler), the defendant, on November 6tlr, 1897, gave Sigler a lease for five years at $350 per year. The description of tire leased premises in Sigler’s lease was identical with that in the Reese lease, and. the same option to purchase for $3,000 was also included in this lease. Sigler occupied tire house and barn, and also during his occupation built a one-story extension or lean-to on tire north side of tire barn of the same width as the barn, and which extended to the north line of the “L,” thus covering the whole rear of the lot. This extension was connected with the barn, and stalls for horses were erected in it, the lower story of the barn being used for carriages. Sigler also' built a shed on the east side of the barn, and until his death (in 1899), before the end of his term, exclusively occupied the house, barn and sheds and the defendant’s entire lot. He moved the house or saloon on the front of the lot out to the building line and put an addition on the rear of this building, and the house or hotel has ever since remained in this location. The defendant says that, in making the original lease to Reese, he intended to reserve a lot for a barn with an entrance thereto, and to lease only the corner; that Reese so understood it, and that the barn subsequently put on the rear of the lot by Reese was moved there by defendant’s permission, as he (defendant) had purchased a lot elsewhere for Iris barm and had then no occasion to use the lot. He also- says that, at the time of his purchase of the buildings from Sigler’s administrator, and of his sale of them to complainant, and even until the present dispute, he did not know of the erection of the lean-to or extension to the barn which was erected by Sigler. The description of the premises leased in the Sigler and Naughton lease with the option clause was taken by defendant from the Reese lease, and the ■leases are similar, except that the amount of purchase-money in the Sigler lease is $3,000 and in the Ñaughton lease $4,000, and defendant now says that he had it in his mind, and intended in executing the Naughton lease, that the premises leased and sold were the same as in the original Reese lease. He swears also that the lease now in question was drawn by him and sent to Naughton, and then was brought back by Naughton^ who objected that it did not cover the entire lot, and that on such objection he (the defendant) told him he (the defendant) knew it did not, but he (the complainant) would have to lease it that way or not at all, and that after demurring a little the complainant executed the lease as drawn. The complainant denies that this conversation took place, and for the purpose of deciding the first question the actual location of the premises according to the description in the lease itself, it is, I think, inadmissible and must be disregarded as tending to vary the deed. Its effect as establishing a mistake on defendant’s part, or complainant’s knowledge of it, will be considered hereafter. Even if it is admissible as evidence, bearing on the actual location of the lot leased as described in the lease, it is altogether vague and indefinite on this subject. For the purpose of locating the lot from the description in the lease, nothing appears in the case which would justify me in declaring that the description should not be taken as referring to the conditions existing at the time of the lease. If the description is, in fact, applicable to the conditions as they tiren existed on the ground, it must, prima facie, at least, be applied according to these conditions which are presumed to be in the minds of the ¡oarties and with reference to which they use the language of the contract. The lease did not refer to defendant’s deed, either for fixing the beginning corner or anjr other purpose, and this deed, therefore, cannot, as against complainant, be referred to for the purpose of adding to or qualifying the words of the description in the lease as to the beginning corner. Fixed monuments existing on the ground must be taken as intended, rather than a beginning corner fixed by the original deed, which had been obliterated or abandoned for years before the agreement between the parties. If I am right in this view that the beginning- corner of the lot leased and intended to be sold, located according to the description, was on the building line marked by the house as it stood, then the lot leased was, according to the description in the lease, a lot with a frontage of thirty-one feet six inches on Ocean avenue and at' least one hundred and four feet on New street from this line. This description, giving tire two sides of the lot without further aid, might possibly leave the other boundaries uncertain if the lease alone be considered, although I am inclined to think that, in view of the actual location, occupation and use of the buildings on the lot at the time of the lease, the description of the lot as fronting thirty-one feet six inches on Ocean avenue and fronting-one hundred and four feet on New street would cover the entire lot, including the “L” or all of it, at least to the one-hundred- and-four-foot line from the building line. But if there is any uncertainty or doubt about this description, the complainant in this case is so situated that, in equity, he has the right to remove the uncertainty or doubt by a reference to the original agreement of lease and sale. This was the agreement under which he entered into possession, and in this agreement the lot in question was referred to by defendant as “my lot on the corner of Ocean avenue and New street.” The buildings were described as standing on tins lot, and after agreeing to lease the lot till November llth, 1902, defendant agrees that he “also will give said William Naughton privilege of purchasing said lot at the expiration of the lease as above.” Naughton entered under this agreement, bought the buildings and occupied the entire lot with the buildings up to the lease of May llth, 1899. It was no part of the agreement itself that the option to purchase should be a future option to be included in the lease, or that the option, if given in the lease, should terminate the option given in the agreement. It has not been satisfactorily shown that Naughton ever abandoned the original option, or that, in taking the option in the lease, he intended to do so. The fact that subsequent to the execution of the lease the occupation of the whole lot as leased property continued as under the agreement, without change or objection, and for the whole term of the lease, is very cogent evidence that it was not intended by the lease to change the terms of the agreement as to the property to be leased. And the effect of this mutual action of the parties in locating the lot leased should not be overcome by defendant’s statement that on the execution of the lease it was understood by complainant that it did not cover the entire lot. If this statement be true, which complainant denies, it appears that there was no explanation -on either side as to what portion of the lot was not to be leased, or that the lease was intended in any way to modify the rights of the parties under the previous agreement as to the property leased. The evidence, if true, is too vague and indefinite to be made the basis for correcting or ignoring tire language of the original agreement and the subsequent action of the parties as to the premises intended to be leased. The bill in this case is based on the original agreement as- well as the lease, and so far as relates to the property actually leased and intended to- be sold, my view is that, on the agreement and lease, signed by defendant, the complainant is entitled to a conveyance by defendant of his entire lot. I think the description of the premises should be

“my lot in Seabright * * * on the northwest corner of Ocean avenue and New street, on which the buildings formerly occupied by Arthur M. Sigler and wife stood on February 11th, 1899, and having a frontage of 31 feet 6 inches on Ocean avenue and at least 104 feet on New street.”

I will hear counsel, however, on the language of the description. At the hearing I suggested that if there was any dispute as to the boundaries of the tract to 'be conveyed, as described in the option contained in the lease, the proper course might be to direct a conveyance, describing the premises in the words of the option under the lease, following the-rule laid down by Vice-Chancellor Green in Waters v. Bew, 52 N. J. Eq. (7 Dick.) 787, 790 (1894), and adopted by me in Gough v. Williamson, 62 N. J. Eq. (17 Dick.) 526 (1901). But this course would disregard any equitable rights of complainant under the agreement or by reason of his possession of the premises, as fixing the boundaries of the lot sold, and it would or might also leave undecided the equities defendant now sets up against specific performance if 'liis construction of the option be not sustained. Where a contract, uncertain in its -terms, has been acted on and partly performed, the court, in order to relieve the objection of uncertainty, will, for the construction of the instrument, have regard in some cases to the user and course of dealing of the parties, to the surrounding circumstances and to their conduct between the making of the agreement and the commencement of the suit. Fry Spec. Perf. (4th ed.) §§ 381, 635, and cases cited. On further consideration, therefore, I conclude that this is a case where both parties are entitled to have the question of the construction of the option in the lease and agreement as to the boundaries of the lot settled in this court, and that the case does not come within the principle of Gough v. Williamson, requiring a conveyance to be directed in the language of the description in the agreement. On the assumption that, under the agreement and lease, the lot leased and agreed tó be conveyed should be construed to include the entire lot, the defendant, at the hearing, insisted that, if so construed, the agreement was entered into under a mistake on his part, and that the specific performance of the contract as thus construed would be so harsh and inequitable that it should not be directed. The mistake in the description of the lot, if any occurred, was due solely to the defendant and to his carelessness or negligence in not stating in the agreement and lease that tire barn on the rear of the lot stood on land not leased or sold. The mistake was not in any way induced by the complainant, who1 appears to have examined the buildings before his purchase, and while the court does in some eases undoubtedly exercise its discretion to refuse specific performance where tire mistake is that of the defendant alone, yet these are for the most part cases where the mistake is clear, and where a hardship, amounting to injustice, would be inflicted on defendant by holding him to his bargain, and it would be unreasonable to do so. Tamplin v. James, 15 Ch. Div. 215, 221 (Court of Appeals, 1880). And where the defendant sets up a mistake or misunderstanding on his part as to the real meaning and effect of his written contract, it has been said, on general principles, that, to allow such a defence, would open the door to fraud and perjury and destroy the security of contracts. Fry Spec. Perf. (4th ed.) § 763. A defendant should not be easity allowed to relieve himself from his written agreements by his simple statement or oath that he was mistaken in reference to the effect of the agreement, and the mistake as well as hardship must certainly be clearly made out. In this case the defendant’s whole course of conduct in reference to the occupation of the leased lot by.Sigler and Naughton is opposed to any idea of mistake on his part, as to leasing the entire lot to them. As to Eeese’s occupation,- tire defendant’s statement is confirmed by the description in the lease, but Eeese is now dead, and defendant’s statement at the hearing that he allowed Eeese to occupy tire rear of the lot- with the barn because he had no longer any occasion to reserve the strip and the “L” for himself, and the fact that with the subsequent tenants he recognized the lot as leased, so far as occupied by buildings, would seem to justify an inference that after Eeese’s lease, at any rate, he did not intend to reserve an}1' of the lot from the tenants. If this be correct, then the defendant, so far from being corroborated as to a mistake as to tire lot intended to be leased to complainant, is contradicted by his own acts. The lot leased is by all of the papers treated and described as the lot to be sold, and .the defendant cannot now, after the expiration of the lease, be bear'd to say that, although he intended to lease, he did not intend to sell th.e whole..lot. On the whole evidence I do ,not think that defendant has-shown any clear case of mistake. Neither does it clearly appear that inequity or hardship in enforcing this agreement on the construction now adopted- by the court will result. The price of the lot, as fixed to complainant, was $1,000 higher than. Eeese’s or Zigler’s option price, and even admitting defendant’s construction of the lease, and that the eight-foot strip with a lot twenty-five by thirty-eight feet in the rear was worth proportionately the same as the lot on the corner, the hardship to defendant is only a question of a comparatively small additional amount of money for the purchase price. Looking only at defendant’s situation, this is not, in my judgment, such a manifest hardship or injustice, resulting from the enforcement of the contract, as to- justify a refusal to give complainant the benefit of the contract. But, in reference to this whole question of mistake and hardship, which is now relied on as a' defence against carrying out defendant’s contract as construed by the court, it must be borne in mind that this construction of the court is the one which was undoubtedly given to the original agreement by the complainant on making the purchase of the buildings and taking possession under the agreement, that it was apparently tire construction of both, parties so long as the lease lasted, and that complainant’s action under the agreement and lease as so construed has thus been induced by the' defendant himself. These circumstances have given to the complainant on his side a substantial equity that prevents the application of the doctrine of mistake and hardship now invoked for the purpose of relieving defendant from his contract, for the complainant cannot be restored to his original situation. There is no provision in either the agreement or lease as to the disposal of the buildings in case of a failure to exercise the option, and apparently complainant’s only protection for the purchase-money of the buildings was in the exercise of the option. It is true that defendant in his answer says that, at the time of the agreement, he agreed to repurchase these buildings if the option was not exercised, but this was not inserted in the agreement and it is not a term or condition which can now be added to the written agreement of tire parties for the purpose of settling their rights under the option. The defendant claims that the barn and all the buildings are of very small value, but if the buildings which belonged to complainant stand on land which defendant agreed to sell to complainant, and which complainant intended to buy when he bought the buildings, then complainant has an equity to have them remain on the land he purchased, whatever their value. The bill of sale of the buildings, executed at the time of the lease, describes them “as erected and being on leased ground they were so sold to complainant and taken possession of by him to use in their location, and in equity he is entitled to retain them as erected on this ground. This equity is superior to the defendant’s equity to be relieved from the result of his own mistake. On this point it should be further said that it appears by the evidence that on the lot as proposed to be conveyed by defendant there will not be room for the convenient location of the stables in connection with the barn, and it is also evident that the right to have the barn and stable continued in their present location contributes to the value of the property to complainant for either the occupation or lease of the lot.

I conclude, therefore, that the' defendant cannot be relieved from the performance of his contract. If not so relieved in equity he must perform the agreement for sale, either in the very words of the contract contained in the lease, leaving the location of the lot as so described to be determined hereafter at law, or by the description in the lease, taken in connection with the original agreement of sale and the conduct of the parties in locating the lot. For the reasons above stated I think complainant is equitably entitled to have the boundaries and'description of the lot settled in this suit, and to a decree for a conveyance of the lot substantially - with the description above given. The accounts for rents and interest on the purchase-money must also be adjusted, and directions as to the removal of the encumbrances on the property, on payment of the purchase-money, if these encumbrances still exist.