author: Delmar, C. P. J.

text:
    Bergen County Court of Common Pleas.
    GIUSEPPE INCITTI, PLAINTIFF, v. LUIGI FERRANTE AND EDOARDO C. YULIANO, DEFENDANTS.
    Decided February 14, 1933.
    Por the plaintiff, Francis P. Oddo.

    Por the defendants, James A. Major and Joseph U. Gaudielle.

   Delmar, C. P. J.

This action was brought by the plaintiff against the defendants upon a promissory note alleged to have been made by the defendants for the sum of '“15,400 Italian lires.” The complaint does not allege any consideration for the note and concludes with a prayer for judgment against the defendants for said sum of 15,400 Italian lires, or its equivalent in lawful money of the United States. The note is dated at Hackensack, Hew Jersey, and is made payable at the Bank Italia Company, and neither the complaint nor the note sets forth the address of said companjr, so that the presumption, therefore, is that the note is payable in the State of Hew Jersey.

Defendants moved to strike out the complaint on the ground that the same does not set forth a cause of action; and in the argument on said motion they contended that the note in question is not negotiable and that the complaint, therefore, must allege a .consideration, which it does not do.

Upon the argument the point made by defendants’ counsel was that the note was not made for money, but for a commodity and that, therefore, there is no presumption that it was made upon a legal consideration. In support of this contention counsel cites Thompson v. Sloan et al., 23 Wend. 71.

Whether the note in question is or is not negotiable must be determined by the laws of this state. Story Conft. L. (2d ad.), § 317; Thompson v. Taylor, 66 N. J. L. 253; 49 Atl. Rep. 544; Campbell v. Nichols, 33 N. J. L. 81.

The note in question is negotiable in form unless the provision for the payment of the sum named in Italian lire makes it non-negotiable. The Uniform .Negotiable Instruments law of this state provides in article 1, section 1, subdivision 2, that an instrument to be negotiable “must contain an unconditional promise or order to pay a sum certain in money;” and in section 6, subdivision 5, it is provided that the negotiable character of an instrument is not affected by the fact that “it designates a particular kind of current money in which payment is to be made.” The act further provides, article 2, section 24: “Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration.” And in title 4, article 1, section 196, “In any case not provided for in this act the rules of the law merchant shall govern.” This law, with but few variations, has been adopted in all the states of the union and in Great Britain. “It was clearly the intention of the legislature in passing the Uniform Negotiable Instruments act to cover the whole subject relating to negotiable instruments,” the purpose being to secure uniformity in the law in the several states relating to negotiable instruments. Joyce Defenses to Commercial Paper (2d ed.) 1386.

If it had been the intention of the legislature to provide that a note in order to be negotiable must be payable in lawful money of the United States, or in legal tender, it would have been a simple matter to have used language appropriate for that purpose. The use of the words, “money and current money/5 indicate that such was not the purpose.

The question arises—what is money? Money is purely a legal institution; it is impossible without law. “Money is what the law or custom makes receivable for payments, taxes and debts.55 See Delmar, The Science of Money (3d ed.) 25, 46. “Money by itself is but a mere device. It has value only by law and not by nature. So that a change of convention between those that use it is sufficient to deprive it of its value and of its power to purchase our requirements.55 Aristotle’s Politico,.

What then does our law provide ?

The constitution of the United States, article 1, section 8, provides that the “congress shall have power to coin money, regulate the value thereof, and of foreign coin/5 “and under the power vested in it by this section of the constitution the congress has from time to time established the value of foreign coins. It is a matter of common knowledge that foreign coins of various nations such as England, Spain, France, Portugal and Mexico, passed as currency in the United States prior to the civil war. (Sometimes as legal tender under acts of congress.) In fact, they constituted at that time, with the exception of the note issues of the state banks, the bulk of the currency then in circulation. The congress from the earliest times has fixed the values of various foreign coins by statute. One of these statutes, namely, act of August 27th, 1894, chapter 349, section 25, provides, ‘The value of foreign coin as expressed in the money of account of the United States shall be that of the pure metal of such coin of standard value, and the values of the standard coins in circulation of the various nations of the world shall be estimated quarterly by the director of the mint and be proclaimed by the secretary of the treasury immediately after the passage of this act and thereafter quarterly on the 1st day of January, April, July and October in each year.5 55

It is well established that a bill or note may he payable in the money of any country, that is to say in its coins, “such as guineas, ducats, louis d’ors, doubloons, crowns or dollars; or in the known currency of a country, as pounds sterling, livres, tournoises, francs, ílorins, &c.; for in all these cases the sum of money is fixed by the par exchange on the known denomination of the currency with reference to the par.” Story Bills, § 43; Baniell Neg. Inst., § 58; Echo. Bills 137, 138. See, also, King v. Hamilton, 12 Fed. Rep. 478, the material facts in which case are similar to those in the case at bar.

The law merchant is international in its character and was developed for the purpose of facilitating trade in commerce between different countries. It seems clear, therefore, that where a note is made payable in a country in the money or coins of another country, which money or coins have a value fixed by the law or under the authority of the law of the country where the note is payable, and which value can by a simple mathematical calculation be expressed in the value of the lawful money of the latter country, that such note by the rules of the law merchant and under the Uniform Negotiable Instruments act is negotiable. There is a scarcity of decisions in this county touching this question. The following cases, most of which have been cited by counsel for the plaintiff as authorities, bear on the point: Black v. Ward, 27 Mich. 193. In this case, however, the note was made in Michigan but was payable in Canada in Canada currency. It was decided that the note was payable in money and, therefore, negotiable. This can hardly be considered a precedent, because the note being payable in Canada was governed as to its negotiability by the law of that country, and, therefore, was payable in its own currency. Hogue v. Williams, 85 Tex. 553; 22 S. W. Rep. 580; 20 L. R. A. 481. The note in this case was made at Saltillo, in Mexico; no place of payment was specified but it was payable in one thousand Mexican silver dollars. The case was decided on the theory that Mexican silver dollars were recognized by the United States laws as money of the Republic of Mexico, and that, therefore, the note was negotiable; but since no place of payment was specified the note should have been construed under the laws of Mexico, and since it was payable in Mexican money, it was not an authority on the point in question.

In Thompson v. Sloan, supra, decided in 1840, the note was made and dated at Buffalo, New York, in the year 1836, for $2,500, payable in Buffalo, “in Canada money.” This case is cited by counsel for the defendants as authority for the point argued by them that a note payable here in the coin of a foreign country is not negotiable. The court said: “A promissory note must in order to come within the statute * * be payable in money only, in current specie * * *; or, at least, in what we can judicially notice as equivalent to money. * * * Admitting that the note in question imports an obligation to pay in gold and silver current in Canada, I do not see on what principle we can pronounce it to be payable in money within the meaning of the rule. It is not pretended that coins current in Canada are, therefore, so in this state. As gold and silver they might readily be received and so might the coin of any foreign country, Germany or Russia for instance, but the creditor might, and in many cases doubtless would refuse to receive them because ignorant of their value. In law they are all collateral commodities like ingots or diamonds, which, though they might be received and be, in fact, equivalent to money are not yet goods and chattels. A note paj^able in either would, therefore, be no more negotiable than if it were payable in cattle or other specific articles. The fact of Canada coins being current here is not, at any rate, so notorious that we can judicially notice them as a universal customary medium of payment in this state, and if not, they are no more a part of our currency than Pennsylvania bank bills. * * * Nor do I perceive in the case any proof or offer to prove that such coins were of universal currency.”

It must be borne in mind that at the time of this decision there was no country or province known as “Canada.” “There were at that time the provinces of Tipper Canada [Ontario], and-the province of Lower Canada [Quebec], and it was not until the year 1841 that they were united into a single province, and not until many years later that the present Dominion oi Canada was formed. At that time and for many years afterwards there was no currency issued in Canada. Both English and American coins circulated. The standard was gold, but there were different methods of counting, namely, English currency, Halifax currenc}'" and Canadian sterling, the respective ratios being 100 :120 :108. So that even if the note were held to bo payable in gold coin current in Canada there was no way to determine the weight and fineness of the coin.

“It must also be remembered that prior to the civil war the circulating medium of the United States consisted almost entirely of bank notes issued by numerous independent corporations variously organized under state legislation of various degrees of credit and very unequal resources. ‘Acts of congress prohibited the receipt or disbursement in the transactions of the national government of anything except gold and silver and the laws of the states required the redemption of bank notes in coin on demand. There was no national currency excepting coin. There was no general regulation of any other by national legislation.”' Veazie Bank v. Fenno, 8 Wall. 539; 75 U. S. 482. The bulk of the currency circulating in Hew York in 1836 consisted of bank bills issued by various state banks and coins issued by the United States and a few foreign countries and the power of congress to issue paper currency had not then been determined. I do' not, therefore, consider the decision in this ease to be adverse to the contention of the plaintiff but rather as supporting it,, especially so, as the court further stated, “this view of the case is not incompatible with a bill or note payable in money of a foreign denomination or any other denomination being negotiable, for it can be paid in our own coin of equivalent value to which it is always reduced by a recovery.”

In Hebblethwaite v. Flint, 173 N. Y. Supp. 81, the note was made in Brazil and payable in the national currency of that country stabilized by a specific rate of exchange into British sterling. It is not stated where the note was payable. The court held that the note was negotiable by the law merchant, distinguishing this case from Thompson v. Sloan, supra, because the note in this case was made abroad, the court saying, “that cannot apply to notes made abroad which incidentally come before our courts.”

In the case of Reisfeld v. Jacobs, 176 N. Y. Supp. 223, involving a contract for the purchase of Russian bank notes, it was held that such notes were not money. The court said, “in view of the fact that these notes were issued by a government now defunct and that the United States at present has no relations with any government in Russia, the court cannot take judicial notice that these notes are backed by the credit of a responsible government or that they even pass current anywhere as money.” The court, therefore, found that the contract in question was a contract for the sale of goods.

Á year prior to this decision, however, the same court in the case of Brown v. Perera, 176 N. Y. Supp. 215, affirmed an opinion of a referee holding that “foreign money is not, in legal contemplation, a legal commodity or article of merchandise, but that it was money, the title to which was acquired by the innocent holder, even though he purchased it from one who had no title. As was said in the former case (Reisfeld v. Jacoby), the opinion in the latter case “concerns the question whether money issued under the authority of a responsible government and used generally for the purpose of convenient transaction is negotiable, and this has no application to the question presented in the case at bar.”

The contract sued on here is a contract for the payment of money and not a commodity. It is also a contract for the payment of Italian lire and, therefore, within the purview of the act of 1879, supra, under which act the value of this foreign coin in money of the United States is established by the director of the mint and proclaimed by the secretary of the treasury. This note was made for a sum certain, because a note for any number of Italian lire is only another form of expression for the equivalent in dollars, which equivalent is now established under the authority of the legislation previously referred to. See King v. Hamilton, supra.

The motion to strike out the complaint is, therefore, denied.


source: Caselaw Access Project

author: McGrath, C. P. J.

license: Public Domain

text:
    Union County Court of Common Pleas.
    UNION COUNTY BUILDING AND LOAN ASSOCIATION, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. LAWRENCE L. WELTCHEK AND FANNIE WELTCHEK, DEFENDANTS.
    Decided November 28, 1934.
    For the plaintiff, Robert II. McAdams.

    For the defendants, Harry Weltcheh and Emanuel Wagner.

   McGrath, C. P. J.

The plaintiff’s complaint alleges that the defendants mortgaged certain properties to the plaintiff on January 21st, 3929; that there was a default and the property was sold on June 21st, 1933, under foreclosure. Suit is for a deficiency and the complaint recites that on October 20th, 1933, a notice of the proposed suit was properly filed and that the suit was commenced within six months of the date of the sale.

Defendants move to strike out the complaint on the ground that suit was not commenced within three months of the date of sale, as provided in chapter 82 of the laws of 1933. The plaintiff contends that the laws of 1933, chapter 82, changing the period of limitations from six months to three months is unconstitutional and that the suit is governed by the prior statute of 1881, giving the plaintiff six months in which to sue.

It is well settled that the obligation of a contract is not impaired by a law which changes the legal or equitable means for its enforcement existing at the time it was entered into, provided an adequate though perhaps not so convenient remedy is retained or substituted therefor. “Although a new remedy may be deemed less convenient than the old one, and may in some degree render the recovery of debts more tardy and difficult, yet it will not follow that the law is unconstitutional. Whatever belongs merely to the remedy may be altered according to the will of the state, provided the alteration does not impair the obligation of the contract.” Bronson v. Kinzie, 1 How. 311, 316. Thus in Wheeler v. Jackson, 137 U. S. 245, a statute shortening the period of limitation for bringing an action, but not reducing it to an unreasonably short period, was sustained; and in New Jersey our Court of Errors and Appeals has held that the legislature may pass statutes of limitations which shall apply to existing contracts, provided a reasonable time in which to bring suit is allowed. Barnaby v. The Bradley Currier Co., 60 N. J. L. 158; 37 Atl. Rep. 764; Wootton v. Pollock, 116 N. J. Eq. 490; 174 Atl. Rep. 497. In all such cases the question is one of reasonableness and as to that the legislature is primarily the judge; and in judging the reasonableness of the limitation the court must consider the circumstances and cannot overrule the judgment of the legislature unless a palpable error has been committed. Terry v. Anderson, 95 U. S. 632; 24 L. Ed. 365. In Wootton v. Pollock the court held the change not unreasonable as applied to a suit in equity; and nothing has been shown which would indicate that the change from six months to three months is unreasonable as applied to a suit at law; and the change therefore is not prohibited either by the United States constitution or the constitution of New Jersejr.

It is true that this law of 1933, chapter 82, relied upon by the defendant, has already been declared unconstitutional on another ground. In Vanderbilt v. Brunton Piano Co., 111 N. J. L. 596; 169 Atl. Rep. 177, some provisions of the act with reference market value have been declared unconstitutional; and the rule is that if the unconstitutional parts of the law are so connected and dependent upon the provisions regarding the three months period as to warrant the belief that the legislature intended them as a whole, they must stand or fall together. Morris v. Carter, 46 Id. 260. It is also true that in the more recent case of Fruzynski v. Jablonski, 117 N. J. Eq. 117; 175 Atl. Rep. 112, our Court of Errors and Appeals reiterates that the right to recover the amount of a deficiency cannot be impaired.

However, as pointed out in Wootton v. Pollock, supra, the act of 1933 appears to be nothing more than a restatement of the steps necessary for instituting suit for deficiency judgments (as these steps had already been provided in various previous acts) and in addition a reduction of the time within which such suit could be brought as well as provisions for a reduction in the amount for which judgment could be entered. There seems to be no connection between the reduction of the limitation to three months and the unconstitutional parts as to fair market value which were condemned in Vanderbilt v. Brunton Piano Co., supra, and therefore, no reason exists why the intent of the legislature to reduce the term should not be upheld even though other unconnected parts of the statute have been held to be u nconstitutional.

The motion to strike out the complaint is therefore granted.


author: Egan, V. C.

text:
    Ronald H. Mascarini, complainant, v. Edward Rapczynski et al., defendants.
    [Decided December 12th, 1934.]

      Mr. Bussell E. Greco, for the complainant.

      Mr. James L. McKeon, for the defendants.
   Egan, V. C.

This matter comes before me on a motion to strike the bill of complaint for five reasons. I shall consider but two of them, they being paragraphs four and five, which, respectively, are as follows: “(4) That the subject-matter in dispute has been adjudicated by a decree of the court of chancery dated July 16th, 1934. (5) That the various assignments set forth in the bill of complaint were made after the decree of the court of chancery was entered dated July 16th, 1934.”

The complainant bases his right of action against the defendants as the assignee of the Eagle Investment Company, which, in turn, is assignee of Joseph Kulpa, who obtained a judgment against the defendant Edward Eapczynski for $1,059.93 damages and $54.02 costs; and, also as assignee of the said investment company) which, in turn, is assignee of Anarsio Amatóle, of a claim for $227.71 due under a promissory note from the said Edward Eapczynski; and, again, he is assignee of the said investment company, which is assignee of Eussel E. Greco (the complainant’s counsel), who held a judgment against the said Edward Eapczynski for $274.24 damages with costs of $17.91.

The complainant’s assignor, the said Eagle Investment Company, was a party defendant in the suit in this court in which Stanley Eapczynski was complainant; it was decided in favor of the complainant April 11th, 1934. The case is reported in 12 N. J. Mis. R. 801, and an examination of the reported opinion will indicate why the motion of the defendants in this proceeding to strike the bill should prevail. In the former suit, the counsel of complainant herein was also counsel of the defendant Eagle Investment Company; he, of course, is familiar with the facts and circumstances involved in that suit. He knows that the subjects of the said assignments to the complainant herein, upon which the pending suit is based, were in evidence and constituted part of the defendant’s case in the former suit. By this proceeding, instituted in the name of the complainant, counsel now attempts to resurrect and review an issue involving no new matter whatever, but, on the contrary, composed entirely of the same considered and determined facts—facts heretofore regularly decided and judicially decreed. In brief, the Eagle Investment Company, the defendant in the former suit, assigns its litigated interest to the complainant herein. The final decree in that suit is dated July 16th, 1934, while the assignments to this complainant were subsequently made on August 1st, 1934. The only difference appearing between this and the former suit is the title of the cause; and mere change of title of a cause effects no magical transformation in its facts. After the said decree was signed the defendant filed a petition for a rehearing. It was argued; a rehearing was denied. It then filed a notice of appeal; for no apparent reason, it failed to prosecute it. In my opinion the present suit is without merit and is clearly a subterfuge to circumvent the decree of this court in denying the application for a rehearing, and, again, to overcome the added failure to prosecute the appeal. Willoughby v. Chicago Junction Railways, &c., Co., 50 N. J. Eq. 656; 25 Atl. Rep. 277. Equity will not suffer a double satisfaction to be taken, Fr. Max. Eq. (2d ed.—1739) 41; Meranus v. Lawyers and Homemakers Building and Loan Association, 116 N. J. Eq. 402; 174 Atl. Rep. 150; nor will it countenance an unwarranted review. It regards that as done which ought to be done. The maxim of “he who comes into equity, must come with clean hands,” applies with all its force to the pending matter.

The defendants interpose the doctrine of res judicata. The complainant’s counsel argues that the defendants herein cannot assert that doctrine, alleging and maintaining that there is absent from this suit—first, identity of the things sued for; second, of the cause of action; third, of the quality of the persons against whom the claim is made; and fourth, the judgment in the former suit is not in point to control the issue in the pending action. lie relies upon the ease of Smith v. Fischer Baking Co., 105 N. J. L. 567; 147 Atl. Rep. 455. The counsel is in error. Every principle of res judicata necessary to be present in order to defeat the pending suit appears in this case. In the former suit, and in this pending suit, there is identity of the quality of the persons against whom the claim is made; there is identity of the cause of action; the decree in the former suit is in point to control the issue in the pending suit. The complainant herein as assignee of a former defendant, the Eagle Investment Company, is a privy of that defendant and possesses the same, and no greater, rights of his assignor, and he stands in the “shoes” and occupies the identical position of that defendant; he took the assignments subject to all the existing equities, and is charged with notice thereof. Mann v. Bugbee, 113 N. J. Eq. 434; 167 Atl. Rep. 202.

I shall advise a decree granting the motion of the defendants.


author: Fielder, V. C.

text:
    The First National Bank of Hoboken, New Jersey, et al., trustees, complainants, v. Steneck Title and Mortgage Guaranty Company et al., defendants.
    [Decided December 28th, 1934.]

      Mr. Matthew J. Tachella and Mr. J. W. Rufus Besson, for the complainants.

      Mr. John Milton and Mr. Henry J. Oamby, for the commissioner of banking and insurance and Steneck Title and Mortgage Guaranty Company.

      Messrs. Walscheid & Rosenlcranz, Mr. Martin G. Schwartz, Messrs. Harber <& Freesman, Mr. H. David Zerman., Mr. Ernest L. Qúachenbush (and others at final hearing), for the various certificate holders.
   Fielder, V. C.

The Steneck Title and Mortgage Guaranty Company (hereinafter called Title Company), as part of its business, loaned and invested money on real estate bonds and mortgages, many if not all of which, it deposited with Steneck Trust Company (hereinafter called Trust Company), as trustee and against the mortgages so deposited the Title Company issued and sold participation certificates and by such certificates guaranteed payment of the principal and interest thereof. June 2Tth, 1931, the commissioner of banking and insurance took possession of the business and properties of both corporations and proceeded to liquidate them. Thereafter on application to this court by said commissioner, an order was entered July 14th, 1933, relieving the commissioner and the Trust Company from further duties as trustee and appointing the complainants First National Bank of Hoboken and J. W. Rufus Besson as trustees in place of the Trust Company. In the instant suit the new trustees apply to this court for instructions and directions as to various difficulties and problems which confront them in the administration of their trust. They have possession of bonds and mortgages for a total of nearly $1,200,000 and they have foreclosed mortgages for a total of $162,000, under which foreclosures they have bought in or accepted deeds for the foreclosed property and the total amount of participation certificates issued by the Title Company and outstanding is $2,051,435. I understand that under the administration of the commissioner of banking and insurance, some trust mortgages were paid off or reduced in amount, others were foreclosed and title taken in the name of the Title Company and that the money so paid on mortgages and the titles to the foreclosed properties have been or will be turned over to the complainants by the commissioner and the Title Company to hold as part of complainants’ trust. The certificate holders are so numerous, many being without the jurisdiction of the court, that it was deemed impracticable to make all of them parties to this cause and it was considered that the rights of all could be protected herein by making the holders of more than ten per cent, of the total certificates issued, defendants as representatives of their own interests and of other certificate holders similarly situated and accordingly the bill of complaint names the commissioner of banking and insurance and more than one hundred and thirty certificate holders as defendants herein.

The minutes of a meeting of directors of the Title Company held November 8th, 1928, show the adoption of a resolution to enter into an agreement with the Trust Company for the latter to act as trustee for the issuance of participation certificates and that upon such agreement being entered into, all bonds and mortgages of the Title Company should be delivered to the Trust Company against which such certificates would be issued. This was the only corporate action taken by the Title Company concerning the issuing of certificates and the only agreement entered into between it and the Trust Company bears date October 10th, 1929. By the terms of that agreement the Title Company deposited with the Trust Company certain bonds and mortgages and agreed to add thereto other bonds and mortgages, against which guaranteed participation certificates would be issued in the form set out in the agreement. The Title Company commenced to issue participation certificates November, 1928, notwithstanding that the trust agreement was not entered into until almost a year later and all certificates (called blue certificates) issued thereafter and up to January 12th, 1931, were in the form set out in the trust agreement and purported to be issued against a group of bonds and mortgages deposited by the Title Company with the Trust Company. After January. 12th, 1931, the Title Company discontinued the issue of the blue certificates and thereafter and up to the time the commissioner of banking and insurance took over the two corporations, it issued two kinds of certificates, one known as T certificates and the other known as D certificates. The T certificates are identical in form with the discontinued blue certificates and assign to the holder “an undivided share * * * in and to certain bonds and mortgages * * * held in special deposit by the Banking Corporation of the State of New Jersey under a trust agreement by and between ourselves and Steneck Trust Company as trustee.” The D certificates are identical in language with the T certificates, except that the D certificates, besides using the above quoted words to express assignment of an undivided share in bonds and mortgages deposited with the trustee, also describe a particular mortgage and purport to assign a share therein, so it may be claimed that in form the D certificates assign to the holder thereof a share in a particular mortgage and also a share in all other mortgages deposited with the trustee. These D certificates were issued without any corporate act of the Title Company authorizing them and contrary to the provisions of the trust agreement. They present for determination the question of the rights of the holders thereof as against the rights of holders of blue and T certificates.

The mechanics for issuing certificates were handled by the Trust Company exclusively. The only record produced to show what bonds and mortgages were delivered (there was no formal assignment) to the Trust Company and how they were treated with respect to the trust, is a series of cards kept by the Trust Company. That company was agent of the Title Company for the sale of certificates; after January 12th, 1931, it decided whether to issue to investors T or D certificates; it received for the Title Company the proceeds of sale of certificates and delivered certificates to investors after they were executed by Title Company officers. The only part taken by the Title Company in the allocation of mortgages to certificates was to execute the participation certificates as prepared by the Trust Company. Prior to January 12th, 1931, it was the custom of the Trust Company, through its card system, to allocate certain series or groups of mortgages to particular certificates, but after that date the custom apparently was abandoned and all mortgages were treated as a single group against which all T certificates were allocated. It does not appear that any purchaser of a blue or T certificate bargained for a certificate against any particular group or series of mortgages, or knew or inquired ás to what group or series the certificates sold him would apply and it is to be noted that neither the blue nor the T certificates specify or identify any particular series or group, but speak generally of bonds and mortgages deposited with the trustee. D certificates were issued only to purchasers who expressed a wish for participation in some single mortgage and in no instance when a D certificate was issued did any purchaser choose a particular mortgage; he accepted what the Trust Company chose for him.

1. As I have said, the D certificates are identical in language with the blue and T certificates, except that words were added to the D certificates to describe a particular mortgage. Without mentioning the provisions contained in the D certificates, I think it sufficient to say that any purchaser of one of those certificates who read it, should at once observe that the expressions therein contained were inapplicable to a single mortgage, but applied to a group of mortgages. Particularly do those certificates notify a purchaser that bonds and mortgages against which those certificates were issued, were on special deposit with the Trust Company under a trust agreement and that such agreement governed the issuance of certificates. By the terms of those certificates, the purchasers thereof agreed with the Title Company and with all other holders of certificates, that all certificates issued by the Title Company would be subject to the provisions of the trust agreement. And further, each D certificate bore the certification of the Trust Company that it was issued under a trust agreement between the Title Company and the Trust Company dated November 1st, 1928, and that the mortgages referred to in the certificate were held by the Trust Company under said trust agreement for the benefit of all parties interested. Of course the stated date of the trust agreement was incorrect; it is but one of the many instances of the careless and haphazard manner in which the Title Company and the Trust Company conducted the former’s mortgage participation business. Why the correct date of the trust agreement was not stated does not appear but the participation certificates and the trustee’s authentication gave ample notice to the purchasers of all certificates that the authority for their issuance was based on a trust agreement and such notice put the purchasers of D certificates on inquiry. Application by such a purchaser for inspection of the trust agreement would have disclosed that the agreement was dated October 10th, 1929, and not November 1st, 1928. Such inspection also would have disclosed the fact that the agreement contained no authority for the issuance of participation certificates against a particular mortgage. The Title Company, having issued D certificates, might be estopped to question their validity but that is not the question here raised—the issue is between the holders of blue and T certificates on the one hand and the holders of D certificates on the other.

Naturally no D certificates could be issued against a particular mortgage until that mortgage had been deposited with the trustee. Since there was no authority by corporate act of the Title Company, or under the terms of the trust agreement, for deposit of mortgages with the trustee for any purpose outside the trust agreement and since there is no evidence that any mortgage was actually deposited with the trustee for any purpose other than as specified in the trust agreement, it must be assumed that as each mortgage was deposited with the trustee, the trustee received and held it under the terms of the agreement; thereupon the rights of holders of blue certificates and of T certificates theretofore and thereafter to be issued attached under the terms of the trust agreement to each mortgage immediately upon its deposit with the trustee and D certificates issued against any such mortgage were in derogation of the rights of the holders of blue and T certificates. Neither the Title Company nor the Trust Company had the power as against the holders of blue and T certificates to vary the terms of the trust agreement by issuing D certificates. The rights of holders of blue and T certificates were fixed, before the Title Company commenced to issue D certificates, in all mortgages then and thereafter to be deposited in the trust and there is no evidence that in any instance a purchase of a T certificate was made with knowledge that the Title Company was issuing D certificates against a mortgage which, by the terms of the trust agreement, belonged to the group of mortgages. I reach the conclusion that the holders of D certificates purchased such certificates with’notice that as against holders of blue and T certificates, the Title Company had no right to issue participation certificates in any particular mortgage deposited with the Trust Company; that the holders of D certificates are not entitled to preference in payment out of the particular mortgage described in their certificates and that they must stand in the same situation with all other certificate holders and share pro rata in all mortgages (or their proceeds) deposited with the Trust Company.

I believe my conclusion that the rights of all certificate holders are equal will prove of benefit to holders of D certificates as a class, as well as to holders of the other certificates and that the administration and final settlement of the trust will be thereby facilitated and the expense lessened. If the D certificates were found to be liens against the particular mortgages therein described only, or against such mortgages with an additional lien against all mortgages in the trust for the unrealized balance of the particular mortgages described, a most complex situation would exist of liquidation of various single mortgages before the interests of blue and T certificates could be determined—in other words there would be many small trusts to be administered and settled before the interests of the blue and T certificates could be fixed. Then, too, in a few instances more D certificates were issued against particular mortgages than the principal of such mortgages; also it appears that a large number of mortgages were allocated to both T and D certificates; also that certain D certificates originally issued against particular mortgages were afterward transferred on the card record kept by-the Trust Company to the group of mortgages; also in a number of cases mortgages allocated to certain certificates and mortgaged properties taken over in lieu of foreclosure, have little prospect of paying the principal of the certificates because taxes are greatly in arrear, the properties are in disrepair and have depreciated in value and the mortgages or properties held in lieu of mortgages, yield no present income and show little equity.

2. Through foreclosure and through deeds from owners, the complainants have and will come into possession of real estate from which rent is and will be derived. They are also receiving and will continue to receive, interest on mortgages in the trust. Sheriff’s fees and costs on foreclosure are to be paid, as also taxes in arrear and to accrue, water rent and insurance, and buildings on the property to which they have taken title require repair. What are the complainants’ powers and duties with respect to such receipts and expenditures?

The trust agreement and the participation certificates contain no express powers on the subject, but complainants, as trustees, must protect all trust property for the benefit of their cesluis. As was said in New Jersey National Bank, &c., Co. v. Lincoln Mortgage, &c., Co., 105 N. J. Eq. 557; 148 Atl. Rep. 713, “a court of equity in its capacity as universal trustee, may in cases of emergency for the preservation of the trust estate and the protection of the cesluis, authorize and direct the trustees to do acts which under the terms of the trust and under ordinary circumstances they would have no power to do.” The complainants are advised that they should pool all income receipts and therefrom make the payments required for the above mentioned purposes and for similar purposes. It does not appear from the evidence before me, whether the income received from all sources by complainants, is sufficient for such purposes and that fact will not be known to me until complainants file a report of their trusteeship. For the present it is sufficient to say that from income from rents and interest on mortgages, the above mentioned items should be paid. When complainants are able to file a report with the court, it may then be determined what percentage of the funds in their hands should be retained for expenses thereafter to accrue, including provision for compensation to complainants.

3. May complainants bring suit to foreclose and for deficiency, and if so, in what name ? When the owners of mortgaged premises offer to convey to complainants in lieu of foreclosure, provided the owners are released from the bond, may complainants accept a deed and execute a release of the bond? May complainants accept compromise of a deficiency claim ?

The trust agreement authorizes the Trust Company as agent and attorney of the certificate holders, in case of default, to collect and receive the principal and interest due on mortgages in the trust by suit or otherwise and apply the proceeds to the payment of participation certificates. The commissioner of banking and insurance, representing the Title Company, is interested only in any surplus which may exist in the proceeds of bonds and mortgages after all certificate holders and the expense of administering the trust are paid—an interest of extremely doubtful value. The certificate holders and- complainants representing them, therefore have an interest, prior to that of the commissioner, in the collection of all bonds and mortgages in the trust, and they and not the commissioner should institute foreclosure and sue for and collect deficiencies.

Complainants may sue to foreclose and for deficiency and also bring suits in ejectment. In such suits they should style themselves "trustees for holders of participation certificates issued by Steneck Title and Mortgage Guaranty Company” and in foreclosure suits the commissioner of banking and insurance should be made a defendant as representing the contingent interest of the Title Company. Complainants may refrain from instituting suits for deficiency and may adjust and compromise claims for deficiency either before or after suit or judgment, when the amount of deficiency involved does not exceed $2,000. If the amount involved exceeds $2,000 they should give notice to certificate holders as provided for under question 16. Complainants may, in their discretion, accept deeds from mortgagors and release them from liability on their bonds, rather than go through foreclosure proceedings.

4. Should certificate holders be named' as defendants in foreclosure suits?

The general rule is that upon foreclosure of a mortgage made to a trustee, all cestuis que trustent should be made parties, as well as the trustee, to the bill to foreclose, but there is an exception to the rule in cases where the cestuis are so numerous that it would be most inconvenient, if not practically impossible, to obtain their consent to be made parties complainant, or to serve them with process as parties defendant. In such cases they need not be made parties, but the bill of complaint should contain an allegation to show why they are not joined in the suit. Tyson v. Applegate, 40 N. J. Eq. 305; Johnes v. Outwater, 55 N. J. Eq. 399; 36 Atl. Rep. 483; Camden Safe Deposit and Trust Co. v. Dialogue, 15 N. J. Eq. 600; 72 Atl. Rep. 358; Continental Bank, &c., v. Fulton Realty Co., 10 N. J. Mis. R. 1105; 162 Atl. Rep. 560. As I have before stated the certificate holders are numerous and many are without the jurisdiction of the court—it would be most expensive to serve them with process and almost impracticable to do so and therefore complainants are advised that they need not be made parties to foreclosure proceedings. There is no committee representing them which could bo made defendant in such suits for the purpose of bringing all certificate holders before the court. If such a committee should be formed it may apply to the court, should it so desire, to be given notice of all foreclosure suits.

5. May complainants extend time for payment of principal of past due mortgages and where mortgages are payable in installments, may they waive or extend time for payment of installments ? May they reduce the interest rate on mortgages ?

Complainants may extend time for payment of mortgages and for payment of installments thereon and in case of installment mortgages, they may in the exercise of their best judgment, enter into a new contract with the owner of the mortgaged property as to the manner in which the principal of the mortgage shall be paid. Without first giving notice to certificate holders as provided for under question 16, no extension should be longer than for one year and the interest rate specified in a mortgage should not be reduced.

6. May complainants make alterations to trust property, such as installing heating, refrigerating and other equipment and to what extent? Should they carry out existing contracts for such equipment where the same has been installed by the owner prior to complainants taking title?

Complainants may make such alterations and may carry out existing contracts therefor, limiting the cost to ten per cent, in the aggregate of the principal investment in the property to which the improvement is to attach. If the cost is to exceed such percentage they must give notice to certificate holders as provided for under question 16. If deemed advisable, they may contract for payment in installments over a period of years and may execute conditional sales agreements in connection therewith.

Y. May complainants carry fire, employes’ compensation, public liability, plate glass and other insurance on property mortgaged to or owned by them? May they compromise and adjust losses under policies? Title to all mortgages is in the Title Company and in case of fire loss, checks from insurers will be payable to the Title Company as owners. May complainants endorse such checks in the name of the Title Company?

The obligation to insure mortgaged property against fire loss or damage is on the owner of the property and I assume that all mortgages contain the usual clause under which the mortgagee may effect such insurance in case of the owner’s default and add the premium to the mortgage debt. On property owned by complainants, they may effect all classes of insurance with any insurer authorized to do business in this state, in such sums as they may deem proper. They may compromise and adjust losses and claims in connection with mortgaged or owned property where the amount of the claim does not exceed $1,000. .Where it exceeds such sum, notice of the proposed settlement shall be given as provided under question 16. When checks in payment for insurance losses against mortgaged property are drawn to the order of the owner and the Title Company as mortgagee, complainants may endorse such cheeks in the name of the Title Company as its agent or attorney.

■8. May complainants abandon properties where they are unable, or deem it inadvisable to protect property to which they hold title, or property on which they hold mortgages, from tax sales?

In all eases where complainants believe it proper to abandon such property, they should give notice of their proposal in the manner provided under question 16.

9. May complainants sell, convey and lease real estate to which they have acquired title? May they give satisfaction or discharge of mortgages and release of part of mortgaged premises ? Are they authorized to pay broker’s and appraiser’s fees?

They may sell and lease property upon such terms and conditions as they may deem proper and accept purchase-money mortgages as part consideration for sales, but no lease should be made for longer than one year, unless notice be given in the manner provided under question 18. They may execute satisfactions, discharges and assignments of mortgages and for a consideration which they deem proper, they may execute releases of part of mortgaged premises. Such appraisals as the Title Company made of properties at the time it made mortgage loans, are probably now valueless and if in determining whether to accept any offer to purchase any of the trust property, or for any other specific purpose, it is necessary that the property should he appraised, the complainants are authorized to secure an appraisal. It is not necessary at this time that a general appraisal be made of mortgaged or owned property. Complainants may pay reasonable brokers’ and appraisers’ fees.

10. May complainants retain a real estate agent to assist them in the management of real estate and how much and from what fund should he be paid? Complainants suggest that a certain real estate agent be named as receiver to collect rent upon all applications they may make to the court for the appointment of a receiver in connection with foreclosure suits.

Except for the evidence that complainants have taken over properties mortgaged for 8162,000, I do not know how many pieces of real estate they are called upon to manage. Of course complainants may employ a sufficient working force to properly manage the trust property in their hands and pay their employes reasonable compensation and such expenditures are properly chargeable against the trust estate. It is obvious that help must he employed in connection with the administration of the trust and it is possible that a competent employe could be engaged to attend to the rental of such real estate as may now or shall hereafter be in the trust, the collection of rent and the making of repairs, as well as to the inspection of the condition of mortgaged property. I do not think it presently necessary that a man whose business is that of a real estate agent should be specially employed for the purpose. With respect to rent receiverships, I think the complainant hank should be appointed to serve without bond and that compensation allowed for its services as such should be paid into the general fund of the trust.

11. May complainants accept in payment for rent, principal and interest on mortgages, scrip or bonds issued by municipal corporations of this state, if such scrip or bonds may be used for liquidating taxes or other obligations due the issuing municipalities ?

Yes, and also if such scrip or bonds may otherwise be realized on.

12. May complainants accept Home Owners Loan Corporation bonds in payment of mortgages and sell the same at current market price? May they accept such bonds for less than the full amount due on a mortgage?

Such bonds may be accepted at par value in full payment of a mortgage and they may be accepted at such value in part payment if the owner of the mortgaged property desires to pay the balance in cash. Complainants may sell anjr such bonds so accepted at market price.

13. Bonds and mortgages were executed to American Homes Building and Loan Association as collateral to loans granted on shares of stock in the association, which shares were also assigned to the association as collateral for such loans. Some of such bonds and mortgages and shares were assigned by the association to the Title Company and were delivered by the Title Company to the Trust Company to be placed in the group of mortgages against which participation certificates were issued. May complainants receive from said association the dues collected by it, surrender said shares to the association and release the association therefor? May complainants give credit on such shares for the full book value thereof and accept the difference between such book value and the amount due on the mortgages and cancel such mortgages ?

The above named association is a mutual and co-operative association organized under “An act concerning building and loan associations” (Comp. Stat. p. 334) and its business has been and is being conducted under the provisions of that act and the amendments and supplements thereto. Its members are shareholders entitled to participate in its assets in the proportion that each member contributes to its capital. It makes loans to members on their shares of stock and when it makes what is called a mortgage loan, the borrower assigns his shares to the association and as collateral, executes his bond and mortgage whereby he agrees to pay dues on his shares to the association at the rate of $1 per share per month and also interest on the amount of the loan, also payable monthly, such payments to continue until the shares pledged mature, or the borrower pays off his loan. The bylaws and constitution of the association and the bond and mortgage constitute the borrower’s contract with the association and thereunder he is entitled to share in the profits of the association with his fellow members and when, by the payment of dues plus his share of profits, the borrower’s shares reach matured value, the association credits such amount on his loan and discharges his bond and mortgage. Bonds and mortgages of this nature were assigned by the association to the Title Company, as were also the borrowers’ pledged shares, and the Title Company paid the full principal of each of such bonds and mortgages as consideration for the assignments. Thereafter the borrower paid interest to the Title Company and continued to pay dues to the association.

A decree has been made by this court in the suit of Steneck Title and Mortgage Guaranty Co. v. First National Bank of Hoboken et al., trustees and others (97-612) adjudging that the shares of said association assigned to the Title Company, with the bonds and mortgages accompanying the same, are held as collateral security to said bonds and mortgages and that the complainants in the instant case have the right and duty to collect dues and profits on said shares and to take all necessary proceedings for the complete recovery of the same and upon receiving satisfaction for said shares, to give good and proper releases and discharges therefor to said association. I understand that decree to authorize complainants in the instant suit to accept payment from the association of the value of such pledged shares and credit the same on the debt evidenced by said shares and the bond and mortgage, in any case where the borrower desires to pay complainants the difference between the value of the shares and the balance due on his loan. I do not understand the decree to mean that complainants may take such payment from the association and require the borrower thereafter to pay dues on his shares to complainants until the time when the amount received by complainants from the association and the dues thereafter paid complainants, equal the amount of the borrower’s loan. The Title Company took the bonds, mortgages and shares subject to the borrower’s contract with the association and no decree can be made which will affect the terms of that contract, especially in a cause in which the borrower is not a party. Under his contract the borrower has the right to remain a member of the association and to share in its profits and to make payment of dues to the association until those payments and his share of the profits equal the amount of his loan, whereupon his bond and mortgage will be discharged.

If the owner of property covered by such a mortgage desires to negotiate with complainants for discharge of his debt complainants should deal Avith such mortgage in the same manner as with any other mortgage, that is to say, complainants should consider the security of the mortgage, the responsibility of the maker of the bond and the financial condition of the association and then exercise their judgment in the premises. I know, through proof in another ease pending before me, that the commissioner of banking and insurance has, pursuant to chapters 48 and 258 of the laws of 1933, issued orders to said association restricting and limiting its payments to members on withdrawals and maturity of shares, under which orders withdrawing members can receive only a proportion of the withdrawal value of their shares, monthly. Complainants may, by agreement with and consent of the borrower, accept from the association the withdrawal value of shares held in connection with the above mentioned bonds and mortgages as fixed by the association and payable as ordered by the commissioner of banking and insurance and credit such Avithdrawal value on the mortgage debt and accept from the borrower the difference between the Avithdrawal value and the mortgage debt, such difference to be paid complainants in full, or by monthly installments. Complainants are not authorized to credit full book value of such shares on the mortgage debt.

14. May complainants rely on records of the Trust Company in their possession as evidence of ownership of certificates and may they deal with owners as they appear by such records? May complainants transfer on their records ownership of certificates and note such transfers on the certificates?

All participation certificates provide that to be valid they must be authenticated by the certificate of the Trust Company endorsed thereon. They also provide that the interest of the holder is assignable only on the books of the Title Company and that such assignment must be noted on the certificate. Complainants do not have possession of the records of the Title Company. The Trust Company kept and complainants have what purport to be correct records of all certificates issued by tbe Title Company, such record being the cards hereinabove referred to. Complainants are authorized to rely on such records and to deal with owners of certificates according as such ownership appears by those records, unless proof satisfactory to complainants is produced which discloses an error in such records, in which event the record should be corrected to show the true fact. Owners of participation certificates may transfer or assign their certificates and upon production to complainants of such certificates and proper evidence of transfer or assignment thereof, complainants should endorse change of ownership on the certificate and on their records and therafter deal with the new owner.

15. Applications are made to complainants for a list of certificate holders with their addresses and the amount held by each and for information as to receipts and disbursements in connection with properties to which they hold title. May they charge for expense of furnishing such and similar information ?

It appears that many requests of the nature indicated in this question have been made of complainants and that to comply with such requests entails much time and work on the part of complainants’ employes. Applicants for information should pay therefor at rates to be fixed by the decree to be entered herein after hearing the parties appearing in this cause on the settlement of the decree. All payments made for such information should go into the general fund of the trust.

16. Complainants ask the court to continue this proceeding so that complainants and parties interested may make application herein on matters not fully determined and on future questions upon such notice as the court may prescribe.

This court should have jurisdiction in this cause to determine all questions arising with respect to the administration of the trust whether originating with complainants or with any party to this suit (including as parties all certificate holders, whether specifically named in the bill of complaint or brought in by class representation). All new questions should be presented by petition entitled in the cause and be heard on such notice as the court may prescribe. Where under questions 3, 5, 6, 7, 8 and 9, notice is required to be given, such notice should be by mail to all persons who are named as defendants in the bill of complaint in this cause, at their addresses as the same appear by complainants’ records. Such notice should specify what complainants propose to do and that if any party has objection thereto, he must file dissent in writing with complainants within ten days after such mailing. If within said ten days no dissent be filed with complainants, they may proceed in the manner stated by them. If written notice of dissent be given, complainants may bring the matter to the court’s attention for appropriate action at such time and place as the complainants shall state in their said mailed notice that they will present the matter to the court in case of dissent filed. On any application to the court, whether by complainants or others, all questions (except those herein decided) as to the power of the court to make an order and the propriety of making it, shall be open for discussion.

Upon entry of a decree in conformity with these conclusions, complainants shall mail a general notice to all certificate holders as their names and addresses appear on complainants’ records and to the commissioner of banking and insurance, informing them that this court has determined that the claims of all certificate holders attach to all mortgages held by complainants as trustees and that no certificate holder has a valid claim against any particular mortgage and has also determined various other questions (without specifying them) touching the administration of the trust; that inspection of a copy of the court’s opinion and of the decree entered herein may be had at complainants’ office; that where complainants are required by such decree to give notice of future applications to the court relating to questions raised by the bill of complaint, such notice will be given by mail to the commissioner of banking and insurance and to only those certificate holders who are specifically named as defendants in the bill of complaint in this cause; that all new questions hereafter raised by certificate holders, by the commissioner of banking and insurance or by complainants touching the administration of the trust, must be presented to the court by petition entitled in this cause and will be heard by the court upon such notice as the court may prescribe. Such general notice may include any other matter which complainants deem proper and proof of mailing thereof should be filed at once.


author: Brown, S. C. C.

text:
    CITY OF BAYONNE, PLAINTIFF, v. GEORGE H. KRAMER, WALTER G. WINNE AND N. DEMAREST CAMPBELL, RECEIVERS OF THE NATIONAL SURETY COMPANY, AND NATIONAL SURETY COMPANY, A CORPORATION, DEFENDANTS.
    Decided December 5, 1934.
    For the plaintiff, Alfred Brenner.

    For the defendant George H. Kramer, Edward P. Stout.

   Brown, S. C. C.

The defendant Kramer moves to strike out the second paragraph of the reply denying the matter set forth in the first separate defense of this defendant. The grounds alleged are that “it is sham and false in fact.” The complaint charges that Kramer was duly appointed collector of revenue of the citj’ of Bayonne; that subsequent to his appointment as required by chapter 237 (Pamph. L. 1918), Kramer was designated by the governing body of that city to make examinations of its records as to unpaid municipal liens and to certify the result. On December 13th, 1932, the city of Bayonne instituted condemnation proceedings for the purpose of acquiring a lot of land known and designated as lot B in block 557 on the official assessment map of the city of Bayonne; commissioners were appointed and an award was made and confirmed. Prior to the acceptance of the deed to the premises for the purpose of ascertaining any defects in title, liens or encumbrances against the property, the New Jersey Title Guarantee and Trust Company was employed by the city to examine the title and certify the liens and encumbrances outstanding including the municipal liens. The title company examined the title and in doing so ordered from Kramer, as collector of the city of Bayonne, a tax search to ascertain the municipal liens outstanding against the property. It is charged that Kramer negligently and carelessly made the search in that it is alleged he failed to certify in his search taxes that remained unpaid. The complaint further charges that the title company relied on the tax search furnished by Kramer and certified the result to the plaintiff and the latter accepted the title subject to the tax liens disclosed by the search. In the first separate defense of Kramer’s answer he asserts that on February 10th, 1926, William GL Roberts, as collector of revenue for the plaintiff, sold the premises in question for unpaid taxes for the years 1918 to 1924, and on February 11th, 1926, delivered his certificate of sale to the plaintiff. It is also alleged that Roberts, as collector for the plaintiff, failed to include in the tax sale the assessments for unpaid taxes for the years 1907 to 1917, inclusive, and the effect of such failure was “to destroy, cancel and obliterate the taxes for said years,” and therefore those taxes having been thus canceled Kramer claims he was not negligent in failing to include them in the certificate delivered to the title company. The affidavits presented on the motion disclose that Alice Rowland was the owner of the property at the time the taxes had accumulated thereon from the year 1907 to 1924; that she died in 1925, leaving the property to her husband, David H. Rowland; that there were no bidders at the sale at the time the property was struck off to the city of Bayonne; that David H. Rowland sold the property to a man named Quinlan and that Quinlan was the owner of the property at the time title was acquired by the city of Bayonne through condemnation. Quinlan was paid the full amount of the award made by the condemnation commissioners. The city deducted, however, the amount of the taxes and arrearages for the years subsequent to 1918. In the briefs presented on this motion the parties are in agreement as to the facts set forth in Kramer’s answer but are in opposition as to their legal effect. Did the city of Bayonne in its tax sale in February, 1926, for unpaid taxes for the years 1918 to 1924 by failing to include the unpaid taxes for the years 1907 to 1917, thereby waive and in effect cancel the taxes unpaid for the years last mentioned? If this question is determined in the affirmative the parties are in accord that the motion to strike should be granted for it is the omission of those unpaid taxes from Kramer’s certificate to the title company that is the basis of the suit against the defendant Kramer.

Under an act concerning unpaid taxes (Pamph. L. 1918, p. 883), commonly called the Tax Sale act, a collector of taxes of a municipality is authorized to sell real property for unpaid taxes. Section 25 of the act provides that the collector “shall strike off and sell to the municipality, in fee, for redemption at eight per centum any parcel of real property for which there shall be no purchaser, and the municipality shall have the same remedies and rights as other purchasers, including the right to bar or foreclose the right of redemption.”

Section 28 of the act requires the collector to deliver to the purchaser a certificate of sale duly signed, sealed and acknowledged and section 29 of the act requires that the certificate of sale must provide that the sale is subject only to municipal liens accruing after July 1st, and that the right to redeem will expire in six months after the service of notice to redeem except that the right to redeem shall in all cases extend for two years from the date of sale. In the certificate of sale of the property in question made by collector Koberts to the plaintiff in February, 1926, it was provided, as required by the Tax Sale act, that the sale was made to the city of Bayonne subject only to municipal liens accruing on and after July 1st, 1925, with the right to redeem as provided by that act. The owner could have redeemed his property from the sale to the city by paying the statutory interest charges together with amount of taxes for which the property was sold and the municipal liens accruing from July 1st, 1925. He would not have to pay the unpaid taxes for the years from 1907 to 1917. Section 25 of the Tax Sale act places a municipality on the same level with any other purchaser who might purchase at a tax sale by the following language: “and the municipality shall have the same remedies and rights as other purchasers including the right to bar or foreclose the right of redemption.”

The ordinary rule as to tax assessments is that each year’s assessment takes priority over all assessments for previous years and that the effect of a tax sale for a particular year’s assessment is to destroy, cancel and obliterate the preceding taxes. Harrington Co. v. Walker, 105 N. J. Eq. 172; 147 Atl. Rep. 199; Geran v. New Jersey Sand and Gravel Co., 114 N. J. Eq. 414; 168 Atl. Rep. 817; Chase v. Delaware Township, 108 N. J. Eq. 328; 154 Atl. Rep. 881. It is determined on this motion that the unpaid taxes for the years 1907 to 1917, inclusive, were canceled and obliterated by the tax sale from collector Roberts to the city of Bayonne in so far as they effected the conduct of the defendant Kramer in making his tax search to the title company. The motion to strike out the reply in the particular mentioned in the notice will be granted.


author: Per Curiam.

text:
    CHARLES T. SMITH, BY MARIE SMITH, HIS NEXT FRIEND, AND MARIE SMITH, INDIVIDUALLY, PLAINTIFFS-APPELLEES, v. JAMES J. McFEELY, INCORPORATED, A CORPORATION, DEFENDANT-APPELLANT.
    Submitted May 11, 1934
    Decided December 5, 1934.

      Before Brogan, Chiee Justice, and Justices Parker and Bodine.
    Por the plaintiífs-appellees, George M. Eichler (Henry Joseph, of counsel).
    Por the defendant-appellant, Gharles Stoclcdell Gray (Reynier J. Worlendylce, Jr., of counsel).
   Per Curiam.

This appeal is from a judgment recovered in the Hudson County Court of Common Pleas by the plaintiffs.

There is only one point involved in the appeal and that is that the trial court denied defendant’s motion for nonsuit and for direction of verdict. These motions were based upon the proposition that the evidence in the plaintiffs’ ease failed to justify an inference of negligence on the part of the defendant.

It appears that one of the defendant’s trucks broke down on Willow avenue, in the city of Hoboken, New Jersey, the left rear wheel having collapsed. The steel rim was taken off the damaged wheel and placed against a pole in a leaning position, the bottom resting in the gutter. The infant plaintiff, with others, was playing on the street close by, and the children were attracted to the accident. The testimony disclosed that one of the boys in the crowd attempted to lift the wheel to show how strong he was and that it fell on plaintiff’s foot. On motion for a nonsuit or for a direction of a verdict for the defendant, the rule is that the evidence adduced must be viewed in a light most favorable to the plaintiff, together with all the legitimate inferences such evidence will support. The jury was entitled to infer that leaving the heavy steel wagon rim leaning against the pole, unguarded, was an act that an ordinarily prudent person would not do. The defendant must have recognized, or if it did not is chargeable with the knowledge that a heavy object, placed as stated, was, under the circumstances, potentially dangerous and capable of harm. We think therefore that the motions were properly denied.

It is further argued that the evidence in the case is not sufficient to justify an inference that the negligence of the defendant was the proximate cause of the plaintiff’s injury. We think that it was. It is argued that even though the defendant was negligent that there was an intervening agency, namely, the action of one boy of the group that was standing around the broken down truck, who attempted to lift the wheel in question. We are unable to agree to that proposition. The infant plaintiff had a legal right to be where he was at the time of the happening, namely, on a public street. He was injured without fault on his part, since no act of his contributed towards his injury. The conduct of the defendant created the dangerous situation, as the jury found, and but for such conduct the plaintiff would have suffered no injury.

An intervening cause is the act of an independent agency which destroys the causal connection between the negligent act of the defendant and the wrongful injury, the independent act being the immediate cause, in which case damages are not recoverable because the original wrongful act is not the proximate cause. Davenport v. McClellan, 88 N. J. L. 653; 96 Atl. Rep. 921. We do not think that the act of the third party, as disclosed by the facts in this case, was an intervening cause.

The judgment under review is affirmed, with costs.


author: Whinery, Surrogate.

text:
    Essex County Surrogate's Court.
    IN THE MATTER OF THE ESTATE OF WILLIAM H. KELLNER, DECEASED.
    Decided September 26, 1934.
    Proctor for the executors, Nathan H. Berger.

    Proctors for Jane Kellner, petitioner, Braelow <6 Tepper.

    Proctors for the Eederal Trust Company, executor under the will of Clara Kellner, Lindabury, Steelman, Zinlc & Laferty.

   Whinery, Surrogate.

The will of William H. Kellner, dated June 1st, 1928, including two codicils, each dated June 22d, 1928, was probated by the surrogate of Essex county on September 10th, 1930. On August 13th, 1932, Jane Kellner, a granddaughter of decedent who became of age on March 26th, 1932, petitioned the surrogate to set aside the probate and a rule to show cause was' issued thereon. The executors, on the return day, questioned the jurisdiction of the surrogate and this question was first determined. The surrogate decided that, in a proper ease, he had jurisdiction to set aside probate of a will. See opinion in 11 N. J. Mis. R. 201; 165 Atl. Rep. 585. He held that such jurisdiction was limited to cases based upon “fraud, newly discovered evidence, clerical error or other sufficient cause” relating to the probate itself and that it did not include jurisdiction to determine a contest concerning the existence of a will.

Thereafter the matter was brought on for a hearing before the surrogate. Testimony was taken on behalf of the petitioner and on behalf of the executors. It related only to the execution of the two codicils; no evidence was adduced relating to the execution of the original will. It is argued that if the decree of probate be set aside as to either or both codicils, then the entire probate of all three documents must be set aside. Ho precedents were cited by counsel, nor have any been found by the court, either for or against this argument. At the time of probate, proof was given to the execution of each of the three documents. On that occasion the original will might have been probated, even though it were shown that the codicils were improperly executed. The statute of 1917 (Pamph. L. 1917, ch. 133) granted to the surrogate the authority to open, vacate, modify or set aside a decree or order; it appears that plenary authority is there given to modify a decree or probate to the end that the probate of a codicil might be set aside for proper cause without disturbing the probate of the original will, where proofs of each document had been properly presented before the surrogate. It would be incongruous in a case where fraud in the probate of a codicil was proved, and no evidence offered attacking the main will, to set aside the entire probate of both documents, thereby possibly causing great confusion and uncertainty in the administration of an estate under a main will which was unquestionably the decedent’s will. In this case the two codicils merely concern the burial of decedent in a vault and designate the relatives who may also find their final resting place in the same vault. The disposition of the estate is governed entirely by the provisions of the main will, and no evidence was offered at this hearing pertaining to its execution or probate.

Much evidence was adduced by each side with reference to the execution of the two codicils; little related to the proof of fraud, mistake or error in the probate of the will or codicils thereto. Questions concerning improper execution of a testament, undue influence or lack of testamentary capacity all relate to the existence of a will and jurisdiction to determine such questions lies in either the Orphans Court or the Prerogative Court under our present statutes and practice. An aggrieved person may either file a caveat or appeal from probate by the surrogate within the time stipulated therefor, if the existence of a will is to be contested. Here the petitioner prays the surrogate to set aside the probate many months after the expiration of the time within which an appeal might be taken, presumably to contest the existence of a will if the surrogate sets aside the entire probate. In the interest of the orderly administration of estates there must of necessity be a limitation upon the opportunity to attack a will; there must be some reasonable stability of probate and it should not be set aside by the surrogate except in cases wherein serious fraud, mistake or error has occurred within his jurisdiction. In re Kalmowitz’s Will, 236 N. Y. Supp. 223; 134 N. Y. Misc. 508. Such jurisdiction, under our statutes, relates to the probate and not to the existence of a will.

At the probate of the will, Albert Schurr, a witness to the will, William P. Cunningham, a witness to one codicil, and Eugene Eobinson, a witness to the other codicil, each signed the affidavit-—-proof of due execution of the document to which he was a witness, and each stated therein that, in his belief, testator at the time of signing was of sound and disposing mind, memory and understanding. The will and two codicils- were thereupon probated. The narrow issue now before the surrogate is whether there has been any “fraud, newly discovered evidence, clerical error or other sufficient cause” in the probate to warrant setting aside such probate or modifying the decree of probate. The statement by each witness as to testamentary capacity has not been controverted in the evidence; certainly no testimony was offered to prove that the attesting witness knew or understood the contrary to be the ease. No evidence whatever was offered to change in any manner the affidavit—proof by Schurr concerning the execution of the main will.

There was evidence seeking to impeach the proof of the codicil witnessed by Cunningham. The other witness to it was Louis Bloom. lie testified that Cunningham took him to Mrs. Towne’s home, where decedent then lived, telling him that he was wanted there to witness a signature. He says that he did not know it was a will when he signed as a witness, that the only remark made at the time was a statement that “everything is 0. Eh,” but does not recall who said it, and that Cunningham did not sign in his presence, but left the house with him. His testimony otherwise was vague, uncertain and indefinite. He does not recall who was present, whether the attestation clause was read aloud, what was said or whether anything was said by anyone present. To many questions relating to the occasion, he replied, “1 do not remember.” Cunningham also testified. He says that the codicil was signed by the testator, Bloom and himself in the presence of each other; that Kellner, Bloom and he signed in that order while all three were at or alongside a desk in the sun parlor; that when he and Bloom arrived at the house Mr. Berger, in testator’s presence, said that Mr. Kellner wished them to sign a codicil to his will; that those present on the occasion were testator, Bloom, Berger, Mrs. Towne, her two daughters and Cunningham; that he told Bloom before they went to the house that he was to witness a codicil to a will; that Kellner read the will in the presence of the witness; that Kellner asked Berger to ask him and Bloom to witnéss the codicil; that Berger read the document aloud before it was signed. The codicil as probated contains a perfect attestation clause. The testimony of Mr. Berger (the attorney who prepared the codicil) and Mrs. Aitken (Mrs. Towne), both of whom were present when this codicil was signed, corroborate the evidence of Cunningham. Mr. Berger further testifies as to this transaction:

“I then turned to Mr. Kellner and said to him ‘Mr. Kellner, do you wish these men to act as witnesses to your codicil?’ He said, T do’ or words to that effect, I think. Then I turned to the two men and I said, ‘Mr. Kellner is about to execute a codicil to his last will and he wishes you to act as witnesses.”

Mrs. Aitken (formerly Mrs. Towne) further testified that on that day, before these witnesses arrived, her father had told her he was making a codicil to his will.

Where there is a perfect attestation clause and the signatures of the witnesses are admitted, that clause makes prima facie proof of all the facts stated in it. Darnell v. Buzby, 50 N. J. Eq. 725, 727; 26 Atl. Rep. 676, and cases there cited. The burden is then on the contestants to negative its averments, upon the disputed points, by strong and convincing evidence. Darnell v. Buzby, supra. Of course if the testimony of both witnesses denies the facts set forth in the attestation clause, the will should not be probated. In re Berdan’s Will, 65 N. J. Eq. 681; 55 Atl. Rep. 728. But where there is a divergence of the evidence given by the witnesses, one of them in agreement with the attestation clause, the will should be probated. In re Van Sickle’s Estate, 41 N. J. L. J. 53; In re Dillon’s Estate, 3 N. J. Mis. R. 784; 130 Atl. Rep. 245; In re Sandmann’s Will, 68 Atl. Rep. 754; McCurdy v. Neall, 42 N. J. Eq. 333; 7 Atl. Rep. 566. And the corroborating evidence of other witnesses at the execution will also be considered in the determination of the observance of the legal formalities. Miller v. Van Dyk, 9 Id. 372; In re Beggan’s Will, 68 N. J. Eq. 572; 59 Atl. Rep. 874. Prom the evidence, it cannot be said that Cunningham committed fraud in the probate of this codicil.

Eugene Bobinson was the witness to the other codicil whose affidavit-proof was offered at its probate. He 'was the butler in the Towne home and the other witness to the codicil was Victoria Biley, a maid. This codicil also contained a perfect attestation clause and the burden of proof is therefore upon Jane Kellner, the petitioner. Eugene was sworn on behalf of petitioner. He testified that Mrs. Towne requested him and Victoria to come from the kitchen to the sun parlor; that when they did so, Mr. Kellner was holding a paper in his hand; that Berger, Mrs. Towne and her two daughters were also in the room; that Berger then told them that Mr. Kellner wished them to witness his will and after taking the paper from Kellner, Berger read it aloud to them; that Kellner then took the paper to a desk where he signed it, after which he and Victoria signed as witnesses, all three signing on the desk in each other’s presence. Victoria corroborated Eugene’s evidence relating to the execution of the will. ^Neither recalled any conversation with, or statements by, Kellner, although Eugene says that he was in good humor. Mr. Berger testified that after the first codicil had been executed, Kellner talked to him and told him he wanted to designate the persons who might be buried in his vault with him; that a new codicil was then drafted by him; that at his suggestion the butler and maid were brought in as witnesses; that when they came in, he asked Kellner if he wanted them to witness the codicil and Kellner replied that he did; that he then told the two witnesses that Kellner wanted them to witness the codicil, after which he read it aloud; that then the testator and witnesses signed in each other’s presence. Mrs. Aitken (formerly Mrs. Towne) was also present when this codicil was executed. She says that after the first codicil was signed, her father told her he wanted another codicil to provide for burial of other members of the family in his vault. Her evidence confirms that of Eugene and Victoria as to the execution of this codicil. The evidence adduced by Jane Kellner, the petitioner herein, was based upon statements which Eugene was alleged to have made to others relative to Kellner’s physical condition, his mental condition and to the execution of the codicil, controverting Eugene’s testimony both on the affidavit-proof of the codicil before the surrogate and his evidence at this hearing. These statements were given in the summer of 1932 to Messrs. Braelow & Verney, attorneys associated with the firm representing the petitioner, who had with them at the time Judge Bruno of the Recorder’s Court at Ventnor. Three weeks before this hearing, Braelow and Verney again saw Eugene at the apartment of Gibbs, and asked if the contents of the statement were true; Braelow and Verney assert that he replied in the affirmative and Gibbs says that Eugene then said that some of it was true and some untrue. Eugene says that at the first interview when the statements were made, he was frightened because one of the men had on a badge as a deputy sheriff and Judge Bruno was present, and that he did not realize the contents of the paper. Bruno said that Eugene was not calm on that occasion. It is on these statements that an effort is made to discredit Eugene’s affidavit-proof at the probate and his testimony given as their own witness, albeit perhaps a hostile one. In view of his evidence at this hearing, corroborated by that of Victoria, Berger and Mrs. Aitken, it cannot be held that petitioner has sustained the burden of disproving the allegations of the attestation clause and in disclosing any fraud in the probate of this codicil.

Petitioner also seeks to have the order of probate set aside on the ground of newly discovered evidence. In order to set aside the order and grant a new hearing for this reason, it must appear that the new evidence is of such a character that it would probably change the result and produce the opposite result and that it. could not have been discovered with reasonable diligence within the statutory time limited for the appeal from probate. See Kirschbaum v. Kirschbaum, 92 N. J. Eq. 7; 111 Atl. Rep. 697; Cameron v. Penn, &c., Co., 116 N. J. Eq. 311; 173 Atl. Rep. 344. It has been held in our Supreme Court that verdicts ought not to be disturbed on charges that the principal witness for the plaintiff made statements at the trial in conflict with statements made to an alleged newly discovered witness. Nightengale v. Public Service Co., 8 N. J. Mis. R. 238, 242; 149 Atl. Rep. 526. It does not appear to the court that the evidence adduced is such as would have changed the order or decree of probate nor that it could not have been ascertained with reasonable diligence within the time limited for appeal from probate.

Our 1917 statute, under which this proceeding was instituted, was not intended to enlarge the time within which there might be a contest over the existence of a will. Errors of law in the probate remain subject to the statutory remedy of appeal from probate. Whether the document is the will is a question to be determined by the Orphans Court or the Prerogative Court. Under our statute, the surrogate may alter an order or decree made by him and grant a new trial or hearing “for fraud, newly discovered evidence, clerical error or other sufficient cause.” His jurisdiction is limited, however, to fraud, new evidence or error in the probate itself and cannot be extended under our present statutes to a determination as to the validity of a contested alleged will. Cases, discussing the New York statute similar to our 1917 statute and antedating it, which are illuminating in this comment of the instant case are In re Schlosser, 63 N. Y. Misc. 163; In re Tilden, 98 N. Y. 434; In re Hawley, 100 Id. 206; In re Henderson, 157 Id. 423; In re Ahler's Estate, 104 N. Y. Supp. 529; In re Gaffney, 116 App. Div. (N. Y.) 583; In re Peck, 131 N. Y. App. Div. 81.

The petition of Jane Kellner to set aside the probate of the will and two codicils of William H. Kellner is therefore denied and the rule to show cause dismissed.


author: Leyden, C. P. J.

text:
    Bergen County Orphans Court.
    IN THE MATTER OF THE ESTATE OF GEORGE FOSTER, DECEASED
    Decided December 21, 1934.
    Bor the accountant, Wurts & Plympton.

    Bor the estate of E. Howard Boster, Clyde Christie.

   Leyden, C. P. J.

George Boster died on the 9th day of May, 1928, leaving a last will and testament wherein he nominated the Hackensack Trust Company to be executor of his estate. The trust company accepted the appointment, qualified and undertook the administration of the trust. The executor, realizing the services of counsel were necessary in the administration of the estate, appointed Mr. E. Howard Boster as its proctor.

In due course, the Hackensack Trust Company filed its intermediate account for settlement in the Orphans Court of the county of Bergen. It prayed allowance in the sum of $3,517.07 as compensation for its pains, trouble and risk and in the sum of $3,000 for its legal expenses. The account, together with the commissions and counsel fees, was allowed and approved by a decree of this court. The commissions and counsel fee were not paid, however, for the reason that the cash on hand was insufficient. Practically the entire estate consisted of a $58,500 second purchase-money mortgage on a parcel of New York realty. This mortgage was subsequently wiped out by the foreclosure of the first mortgage lien.

Mr. Poster, the proctor, died on September 28th, 1931. The present counsel, Messrs. Wurts & Plympton, succeeded him and have performed legal services for the executor.

The trust company now exhibits its final account showing $327.38 corpus and $709.92 income in hand and practically nothing else. It prays that its account be allowed and that commissions amounting to $769.43 be awarded to it. Messrs. Wurts & Plympton ask that they be allowed a $1,200 counsel fee for their services to the executor. The representatives of the estate of the first proctor, Mr. Poster, claim the moneys remaining in the hands of the executor or a pro rata share thereof in partial satisfaction of the award of $3,000 to Mr. Poster on the intermediate accounting. The present proctors insist they should be paid first and that there should be no pro rating of the fund, or, in the alternative, the entire fund should be awarded to the executor on account of its commissions.

I am of the opinion that the fund should be paid to the executor on account of its past and presently due commissions, as compensation for its pains, trouble and risk in the administration of the estate.

At common law a personal representative of a decedent was not compensated for the services rendered in the performance of the trust. His office was regarded as honorary. He was allowed merely his just charges and expenses. State Bank of Elizabeth v. Marsh and Edgar, 1 N. J. Eq. 288. This rule has been changed by statute and now the allowance of commissions to executors, administrators, guardians or trustees is made with reference to their actual pains, trouble and risk in settling the estate. Their compensation must be reasonable and within the limits set forth in the statute. Sections 128 and 129 of the Orphans Court act. 3 Comp. Stat., pp. 3859, 3860.

A personal representative’s necessary, legitimate expenses in the management of the estate may be allowed but a claim for their allowance should be scrutinized by the court. Lyon v. Bird, 79 N. J. Eq. 157; 80 Atl. Rep. 450. He may employ agents for extraordinary services of administration and for such as in their nature require a degree of skill not within the command of ordinary persons. Reasonable expenses so incurred for the benefit of the estate may be proper charges against it. 11 R. C. L. 233, ¶ 260. Where agents have been employed, the test on the question of compensating the agent out of the estate is: was it necessary or was it to the interest of the estate ? If it were • necessary, the expenses thus incurred are allowed; if not, they will be disallowed. The burden of proof is on the accountant. In re Hill’s Estate, 79 N. J. Eq. 521; 82 Atl. Rep. 338.

Accordingly, an executor with power of sale is justified in employing agents to procure purchasers of the real estate because of their special skill and practice in such matters and commissions paid to such agents may be allowed. Dey v. Codman, 39 N. J. Eq. 258; Brown v. Brown, 72 Id. 667; 65 Atl. Rep. 739; Babbitt v. Fidelity Trust Co., 72 N. J. Eq. 745; 66 Atl. Rep. 1076. An executor will not be allowed, however, for work done by agents which he, in contemplation of law, was bound to do himself. If he chooses to employ others to do his work, he must pay them himself. Kingsland v. Scudder, 36 N. J. Eq. 284; In re Wiley’s Estate, 65 Atl. Rep. 212; Lyon v. Bird, supra. Ho allowance, therefore, will be made for services rendered to the executor in the keeping and making up of his accounts. His fees must be presumed to cover his trouble and expenditure for so doing. Wolfe’s Case, 34 N. J. Eq. 223.

In Dey v. Codman, supra, an agent was employed and his commission paid out of the estate but this payment to the agent was taken into account in fixing the amount of the commissions of the executors and the sum paid as compensation to the agent, together with the commissions allowed by the court, did not equal the amount of commissions to which the executors were entitled.

A personal representative is entitled to the advice and assistance of counsel in many of the duties devolving upon him. Accordingly, it is almost universally recognized that lie may employ legal counsel in the administration and settlement of the estate whether there is litigation or not and may take credit for the payment of reasonable counsel fees for the services of such attorneys. King v. Berry, 3 N. J. Eq. 261; Kingsland v. Scudder, supra; In re Babcock’s Estate, 112 Id. 374; 164 Atl. Rep. 407; 11 R. C. L. 233, ¶ 260; 24 C. J. 97. Therefore, where the services of an attorney are necessary, the court will allow to the personal representative out of the estate, reasonable compensation for the legal services of value to the estate. 11 R. C. L. 234, ¶ 261.

An executor or administrator has no power to bind the estate by his individual contract nor can he impose any liability on its assets through such contracts, notwithstanding such contracts are for the benefit of the estate. Doolittle v. Willett, 57 N. J. L. 398; 31 Atl. Rep. 385; 24 C. J. 63. The contracts of the executor or administrator cannot be regarded in any sense as contracts of the decedent. The principle is that he may disburse and use the funds of the estate for the purposes authorized by law but may not bind the estate by an executory contract and thus create a liability not founded upon a contract or obligation of the decedent. 11 R. C. L. 166, ¶ 177; 24 C. J. 63.

The executor or administrator is personally liable on contracts which may be made by him in the course of his administration. This is the rule, although such contracts may have been made for the benefit of the estate. It lies within his power, however, to stipulate against personal liability. 11 R. C. L. 166, ¶ 177; 24 C. J. 64. It follows that a contract for the employment of counsel is essentially one made by the executor or administrator in his individual and not representative capacity. Attorneys employed by a personal representative to assist him in administering his trust or to prosecute or defend actions for or against him in his official capacity have no claim they can enforce directly against the estate. They are the attorneys of the representative not of the estate. 11 R. C. L. 234, ¶ 261. Attorneys so employed must look for compensation to the representative in his individual and not in his representative capacity, and for such services, in the absence of a special agreement limiting the liability, the fiduciary is personally responsible. 11 R. C. L. 235, ¶ 262.

The conclusion reached, therefore, is that neither the estate of the deceased proctor nor the present proctors may succeed in their request for the allowance of counsel fees directly to them out of the estate.

Upon a final accounting in the Orphans Court reasonable counsel fees for necessary and valuable services rendered to the estate in the administration thereof may be allowed to the personal representative, in addition to his commissions, as a necessary and legitimate expense in the management of the estate.

The executor will be allowed the fund now in its’ hands in payment of the commissions due, and the proctors will look to the executor in its' individual capacity for payment for .any services rendered by them to it.