text:
    Alfred L. Miller et al. v. John A. Willett et al.
    [Decided October 20th, 1905.]
    1. A bill of complaint, which states that the complainants jointly have rights of action against several defendants, no one of whom is liable in whole or in part for the other’s debt; which asks neither accounting nor discovery, but demands simply the payment by each defendant separately of a definitely ascertained sum of money; which shows no joint or related liability between the defendants; which alleges neither the breach of a trust, the perpetration of a fraud, nor any other ground for equitable relief, is demurrable for want of equity.
    2. Such a Bill is multifarious in that it subjects each unrelated defendant, who the bill shows is entitled to defend separately, to the embarrassment of defending a suit in which others are joined as defendants, with whom he has no apparent common interest.
    3. A bill which seeks to enforce a statutory obligation in the nature of a guaranty of a debt, by compelling the payment of sums largely in excess of the amount necessary to satisfy that debt, is demurrable for want of equity.
    On demurrers to bill of complaint.
    The bill of complaint in this cause is filed by Alfred L. Miller and more than four hundred and fifty other persons, who allege themselves to be residents in the State of Colorado, and to be all of the depositors in and creditors of the State Bank of Monte Vista, in the county of Rio Grande, in that state.
    The defendants are John A. Willett and nineteen others, who are in the bill alleged to be the only shareholders in said bank, and persons liable for the debts, within the jurisdiction of this court.
    The. bill of complaint alleges that the State Bank of Monte Vista, since the 11th day of August, 1890, has been and still is a corporation organized under the laws of the State of Colorado, having a capital stock which, as increased, is $80,000, divided into eight hundred shares of the par value of $100 each; that the said bank conducted, in throe different places in Colorado, a general banking business until June 15th, 1899, when it became insolvent, and on that day made an assignment under the laws of the State of Colorado, and appointed one Norman H. Chapman as assignee; that the assignee qualified and took possession of the property and choses in action of the bank, converted them into money and paid them out to the creditors of said bank, and that nothing remains for distribution, all the property and choses in action having been disposed of, resulting in the payment by said assignee upon the indebtedness of the bank as of December 15th, 1899, of fifteen per cent., and of December 1st, 1901, of four and a half per cent., and that if any further moneys are recovered for said bank creditors it must be from the stockholders upon their stock liability; that the complainants deposited in that bank at times while the defendants were shareholders therein, and that the balances of complainants’ deposits ^remaining in the bank at the date of its failure were the sums stated in the list set forth in the bill of complaint, amounting in the aggregate to $66,115.93; that the present total indebtedness of the said bank (after crediting the payments made thereon by the assignee, amounting to $11,-646.90) amounts to $54,469.03, upon which the complainants claim interest, at the rate of eight per cent, per annum, from June 15th, 1899, being the rate of interest allowed by law in the State of Colorado.
    The complainants further allege that the laws of the State of 'Colorado at the time of the organization of the bank provided as follows: (Laws of Colorado 1885 ¶. £6J+ § 1.)

    “Shareholders in banks, savings banks, trust, deposit, and security associations, shall be held individually responsible for debts, contracts and engagements of said associations in double the amount of the par value of the stock owned by them respectively.”
    That said law has been at all times since the organization of the bank and now is in full force and effect.

      The bill of complaint further alleges that when the complainants became creditors of said bank the defendants in this bill were shareholders therein, and continued to be shareholders at the date of said bank’s assignment, and that the number of shares held by each defendant is as follows:
    John A. Willett, five shares; Kobert D. Kent, five shares; Frederick Lowe, five shares; William P. Aldrich, thirty shares; .Edo Kipp, five shares; Anna Basch, forty shares; Moses E. Worthen, thirty shares; Estate of C. Aldrich, thirty shares.
    The bill of complaint further alleges that said Edo Kipp died February 16th, 1899, seized of certain lands, &c., leaving a last will whereof Arrianna Van Plouten and Ella K. Goodlatte were -appointed executrices; that they probated said will on March 1st, 1899, before the surrogate of Passaic county, and undertook the administration of the estate of said decedent; that said Kipp left him surviving as his heirs-at-law and devisees of his lands, &e., Arrianna Van Houten, Ella K. Goodlatte, Peter E. Kipp, John M. Kipp and Mary Kipp; that said Peter E. Kipp, has since died, and the complainants charge that said Arrianna Van Houten, Ella K. Goodlatte, John M. Kipp, John E. Kipp and Mary Kipp, heirs and devisees of said Edo Kipp,, are severally and individually liable for the obligation of said Edo Kipp under the will, as above stated.
    The bill of complaint further alleges that Anna Bascli departed this life on Kovember 24th, 1903, seized of certain lands, &c., testate, and by her last will appointed Henry L. Basch, Isaac Basch and Marion Feeder executors of her will, who on December 5th, 1903, proved the same before the surrogate of Passaic •county, and took upon themselves the burden of the execution 'thereof; that said Anna Basch left her surviving as her heirs-at-law and devisees of her lands, &c., Isaac Basch, Marion Feeder, J ames S. Basch, Carrie Basch, Matilda Basch and Anna J. Basch, who, the complainants charge, are severally and individually liable for the obligation of said Anna Basch, under the will aforesaid.
    The bill further alleges that said Moses E. Worthen departed this life December 26th, 1897, testate, seized of certain lands, &e., and by his last will appointed the Passaic Trust and Safe Deposit Company executor and trustee, which company on January 7th, 1898, probated said will before the surrogate of Passaic county, and undertook to execute the same, and that said Moses E. Worthen left him surviving as his heirs-at-law and devisees of his lands, &c., Irene C. Worthen, now Irene C. Mansur; Harry Worthen, Frank Popple, ,Tr., Bessie Popple, and the Passaic Trust and Safe Deposit Company, trustee, and the complainants charge that the said heirs and devisees are severally and individually liable for tire obligation of said Moses P. Worthen, as above stated.
    The bill of complaint further alleges that William P. Aldrich, upon his individual responsibility, but in the name of the “Estate of C. Aldrich,” subscribed for thirty shares of the stock of said bank, and was a shareholder therein when the complainants became creditors and at the time of the assignment made by said bank to the extent of thirty shares, and the complainants charge that said William P. Aldrich, upon subscribing to said stock, became and was individually liable for the obligation entered into as above named, and agreed to assume, and did assume, the liability for the debts of said bank (in case of insufficiency of the corporate assets to liquidate such indebtedness) in double the amount of the par value of the stock subscribed for in the name of “Estate of G. Aldrich,” and the complainants charge that said William P. Aldrich is indebted to complainants in double the amount of the par value of said stock.
    The bill further alleges that, by virtue of the statute of the State of Colorado, pursuant to which said State Bank of Monte “Vista was incorporated, each and every stockholder of said bank agreed to assume, and did assume, liability for the indebtedness of said bank (in case of deficiency of its assets to liquidate its indebtedness) in double the amount of the par value of his stock, and the complainants charge that tire defendants, by virtue of the provisions of said statute, are severally and individually indebted to the complainants in double the amount of the par value of the stock in the bill of complaint set forth as being held by them respectively.

      The bill prays that the defendants John A. Willett, Robert E. Kent and Frederick Lowe may be decreed to pay to the complainants the sum of $1,000 each; the defendant William P. Aldrich the sum of $12,000; the defendants Arrianna Yan Houten, Ella K. Goodlatte, John M. Kipp, John E. Kipp and Mary Kipp, as heirs-at-law of Edo Kipp, deceased, the sum of $1,000; the defendants Isaac Basch, Marion Feeder, James S. Basch, Carrie Basch, Matilda Basch and Emma J. Basch, as heirs-at-law and devisees of Anna Basch, the sum of $8,000; the defendants Irene C. Mansur, Harry Worthen, Frank Popple, Jr., Bessie Popple and the Passaic Trust and Safe Deposit Company, trustee, as heirs-at-law and devisees of Moses E. Worthen, deceased, the sum of $6,000, and for further relief, &c.
    Seven separate demurrers have been filed to the bill of complaint. One by John A. Willett, another by Robert B. Kent, another by William P. Aldrich, another by Fred. Lowe, another by the Passaic Trust and Safe Deposit Company, trustee; another by Isaac Basch, Marion Feeder, James S. Basch, Carrie Basch and Emma J. Basch, and another by Arrianna Yan Houten, Ella K. Goodlatte, John M. Kipp, John E. Kipp and Mary Kipp.
    Thirteen grounds of demurrer are stated by the different demurrants, which are substantially tire same. They .are as follows :

      "First. That the complainants have not in their bill stated such a case as entitled them in a court of equity to any relief against the defendants or any of them, as to the matters contained in said bill.

      “Second. That it appears by the bill of complaint that the names of the natural persons and of the corporations, complainants, are not accurately or correctly set forth in said bill, and their residences are not definitely given.

      “Third. That it appears by the bill that there are divers other persons who are necessary parties to said bill and who are not made parties thereto, and in particular it appears by the bill that the State Bank of Monte Vista named in said bill is a necessary party thereto, and that Norman H. Chapman as assignee for the benefit of creditors named in said bill is a necessary party thereto, but that neither of said necessary parties is made a party to said bill.

      “Fourth. That it appears by the said bill that complete justice can be done only by the courts of the jurisdiction where the corporation, the said State Bank of Monte Vista, was created, and that only a part of the stockholders being parties defendant to this proceeding, it is not within the province or power of this court to make the ascertainment and afford the equitable relief contemplated by the Colorado statute, and, therefore, the bill should be dismissed.

      “Fifth. That it does not appear by the bill of complaint that the complainants have recovered judgments upon their claims against the State Bank of Monte Vista in the State of Colorado or elsewhere, or have had in any way the validity of their claims judicially determined against said bank.

      “Sixth. That it does not appear by said bill that the validity of the claims of the complainants has been established against the stockholders of said bank by the assignee of said bank or by any court.

      “Seventh. That it does not appear by said bill that the assets of said bank were legally and properly administered and the proceeds justly and equitably applied to the reduction of the debts of the creditors.

      “Eighth. That it does not appear by said bill that the assets of the said bank were ascertained and administered in any suit or proceeding to which the stockholders of said bank were parties or wherein the rights and equities of the stockholders of said bank were duly regarded.

      “Ninth. That the complainants’ rights depend upon the statute of the State of Colorado, which cannot be equitably enforced by this court ixi view of the circumstances set forth in the bill of complaint.

      “Tenth. The statute of Colorado, upon which the complainants rely, contemplates a proceeding in equity in the domiciliary jurisdiction by the creditors of the corporation against all the stockholders thereof for the purpose of establishing a pro rata, liability. This court will not enforce the liability created by the statute of Colorado in a suit by creditors against a few of the stockholders.

      “Eleventh. That the liability imposed upon, stockholders by the provisions of the statute of the State of Colorado quoted in the bill of complaint is not enforceable in the courts of this State.

      “Twelfth. That the said bill of complaint does not set forth any facts showing- a liability on the part of this defendant for the debts of Moses E. Worthen, mentioned in said bill.

      “Thirteenth. That it appears by the bill that the same is exhibited against this defendant and several other defendants for distinct matters and causes, in several whereof, as appears by the bill, this defendant is not in any manner concerned, and that the bill is multifarious.”
    The cause was argued on these grounds of demurrer.

      Mr. Thomas M. Moore and Mr. Henry 0. Whitehead, for the demurrants.

      Messrs. Horton ■& Tilt and' Mr. Eugene Emley (with whom was Mr. Philo P. Tolies, of the Denver bar), for the complainants.
   Grey, Y. C.

The Colorado statute which, is the basis of this suit declares-that the shareholders of banks in that state shall be individually responsible for the debts of the 'bank in double the amount of the par value of the stock owned by them respectively.

The bill of complaint is filed against eleven defendants in different groups, alleging that each group is severally and respectively indebted to the complainants in a certain named sum of money. The complainants pray that each group of defendants may be .decreed to pay to the complainants the definite amount of money named in the bill of complaint.

This cause has been argued upon the widest possible basis, presenting variant constructions of the Colorado statute above quoted and citing numerous decisions in different states touching the meaning of that act, the proper mode of procedure to enforce it, and also discussing the constitutionality, operation and effect of the Few Jersey act of March 30th, 1897 (P. L. 1897 p. 124), prohibiting suits of this character in the courts of this state unless the corporation and all of its stockholders shall be made parties.

I have not found it to be necessary to consider each of the grounds of demurrer to the complainants’ bill of complaint, inasmuch as several of the objections presented affect the whole case, as the complainants- have stated it in their bill of complaint, and when determined must dispose of these demurrers.

The first cause of demurrer challenges the bill of 'complaint upon the ground that the complainants have not set forth such a case as entitles them to any relief in equity, &c.

As the complainants state their cause of complaint, they have a right to the payment of seven definitely ascertained sums of money. They seek separate money decrees, that certain named defendants shall respectively pay these several sums, and they ask no other relief. The following summary of the prayer for relief exhibits this feature of the bill of complaint:

The complainants pray

“That John A. Willett may be decreed to pay $1,000; that Robert D. Kent may be decreed to pay $1,000; that Frederick Lowe may be decreed to pay $1,000; iliat William P. Aldrich may be decreed to pay $12,000; that Arrianna Van I-Iouten, Ella K. Goodlatte, John E. Kipp and Mary Kipp, as heirs and devisees, may be decreed to pay $1,000; that Isaac Basch, Marion Feeder, James S. Basch, Carrie Basch, Matilda Basch and Emma J. Basch, as heirs and devisees, may be decreed to pay $8,000; that Irene C. Mansur, Harry Worthen, Frank Popple, Jr., Bessie Popple and the Passaic Trust, &c., heirs and devisees, &c., may be decreed to pay $6,000.”

It is not asserted that any group of defendants which is alleged to owe one of these definite sums is in any way liable, in whole or in part, for any other of them. Nothing in the ■expressions of the bill suggests that there is any need of an accounting as between the complainants and any or all of the ■defendants. No discovery is sought by the bill of complaint. No facts are stated which indicate the existence of any trust which is sought to be enforced, nor is any fraud alleged against which relief is asked, nor is any other element of equity juris•diction presented by the complainants’ bill of complaint. All that is alleged is that certain named defendants are indebted in certain definitely ascertained sums of money to the complainants, which they seek to recover severally in full from the respective defendants by this suit.

As the complainants state their case, there is no ground of equitable jurisdiction exhibited. The facts set forth in the bill of complaint, if taken to be true, as asserted by the complainants, do show that thej1, have a direct, certain and adequate remedy by suit at law to recover each sum of money which they claim against the several defendants respectively. There is therefore no occasion for an ajopeal to equity jurisdiction. In such cases a demurrer to the bill of complaint will be sustained. JStory Eq. PI. § J¡.7S.

The bill of complaint is also challenged by the demurrants upon the ground that it is multifarious. The face of the bill •alleges that the defendants, in seven different groups, owe seven distinct sums of money, constituting seven separate causes of action, which, as between the separate groups of the defendants (so far as the bill of complaint states the situation), are wholly unrelated.

The Colorado statute which is alleged to- have created the liabilities sought to be enforced in- this suit is recited on tire face of the bill of complaint to make the shareholders individually re-I sponsible in double the amount of the par value of the stock I owned by them respectively.

' This is obviously a several liability of each shareholder to the creditors of the bank. It was so held in Auer v. Lombard, 72 Fed. Rep. 209. The complainants themselves insist that it is several.

It has been declared by the Colorado courts interpreting this statute, in the case of Zang v. Wyanl, 25 Col. 551, that a suit in equity for the common benefit of all the creditors affords the most effectual and convenient proceeding to enforce the provision under examination. This very general statement of the occasion for a suit in equity may define correct equity practice in a state in which the distinction between law and equity tribunals is not maintained, but the course of the procedure there suggested cannot be recognized as authority here without bringing our practice into inextricable confusion. Suits in equity in this state are maintained, not because they are effectual or convenient remedies to complainants, but because the relations of the complainants to the defendants are such that they have, as against them, equitable grounds for relief. In the Colorado case cited it does not appear whether all the shareholders or only some of them were made defendants, nor whether the amount of the bank’s unpaid debt exceeded the whole sum for which the shareholders were liable, or only a part thereof requiring an accounting and decree for proportionate pajunents.

In the ease presently before me the bill of complaint contains no allegations of facts which justify the joining in one suit these several and respective claims against many different persons. No concert of action by the defendants is alleged. No obligation common to all defendants is set forth, nor is there any tie suggested by which the claims of the complainants against all these defendants should be joined, except that it will prevent a multiplicity of suits. But that would be true if the complainants should join in one suit all the unrelated claims they might have against any number of defendants. The complainants say each defendant separately owes the whole sum which he is asked to pay, but they state no reason for joining in one suit these seven several and distinct and apparently (so far as the bill shows) unrelated claims.

This feature of the bill of complaint justifies the defendants’ contention that it is multifarious. It subjects the defendants, who the complainants show are entitled to defend separately, to the embarrassments of a suit in which others are joined who apparently have no common interest.

It also appears on the face of this bill of complaint that no equitable decree can be made in this suit against the defendants.

It must be noted that the complainants do not ask, nor does their bill contemplate, a collection in this suit from each defendant of that proportion of the bank’s debt (not exceeding his whole liability) which he ought to pay. Such a procedure would require not only an accounting, but also the presence, as parties in the suit, of all the shareholders who are liable for proportionate shares of the bank’s debt. What the complainants here demand is that each defendant shall pay the uttermost sum for which he may be liable, although the total of the ^payments which may thus be demanded from all the shareholders will far exceed the bank’s debt. This seeks to force upon each defendant an obligation beyond what any equitable construction of his statutory liability requires. " -

The Colorado statute declares that the shareholder shall be individually responsible for the debts of the bank in double the amount of the par value of the stock which he owns. The obvious meaning is that whatever of the bank’s debts its assets (when applied) shall fail to pay, the shareholders shall make good to the creditors, each shareholder being responsible individually, and not jointly, for his proportionate share of the bank’s unpaid debts to an extent not exceeding double the amount of the par value of the stock which he may own. It is an obligation severally owed by each shareholder to all of the creditors.

In the present suit the complainants allege that the total of the hank’s unpaid debts is $56,469.03; that the par value of ■each share issued by the bank is $100, with an issue "amounting in the total to $80,000; that of the eight hundred shares issued, the defendants in this suit hold one hundred and fifty, which are of the total par value of $15,000. The present suit seeks several and respective decrees against the defendants (wlm hold only three-sixteenths of the shares) to the amount in all of $30,000. Like suits against the other shareholders will make them pay $130,000. By such a construction of the statutory liability and procedures to enforce it, the creditors will collect $160,000 to pay the bank’s indebtedness, which it is admitted on the face of the bill is little more than one-third of that amount.

There has been some discussion in the cases cited of the question whether this statutory liability is the imposition of a penalty or the creation of a statutory contractual obligation, imposed by the state in granting the franchise, which the shareholder has accepted by taking his shares. The tendency of 'the courts is to adopt the latter view.

It is a familiar principle that courts of equity will not enforce penalties. The complainants in this suit do not present their case as one seeking to enforce penalties, yet their bill of complaint as framed—by insisting upon the several liability of each defendant to pay as an absolute sum double the par value of his shares, the total of which is far in excess of the bank’s unpaid debts, and omitting to bring in as defendants all the shareholders, and to invite an accounting and the ascertainment of the proportionate sums which each should respectively pay to satisfy the bank’s unpaid debts—in effect seeks to enforce against each defendant the payment of a fixed sum wholly unrelated and out of all proportion to the amount needed to pay the bank’s debts. In short, to enforce a penalty. This defect of the bill of complaint is apparent upon its face, and affects this court’s ability to make any decree in this cause which will be just and equitable.

For the reasons above stated, the demurrers to the bill of complaint must be sustained, with costs.


source: Caselaw Access Project

author: Grey, Y. C.

license: Public Domain

text:
    Lulu Wright et al. v. Daniel P. Wright et al.
    [Argued April 24th, 1905.
    Decided November 15th, 1905.]
    Where a judgment was entered, execution was issued and levy made in the debtor’s lifetime, it is entitled to be paid before funeral charges and expenses. Section G6 of the Orphans Court act has no application.
    On bill for partition, &c.

      Mr. Thomas B.' Rail, for the complainant petitioners.

      Mr. Enoch 8. Fogg, for Charles E. Allen, guardian of Beulah C. Riley, defendant, respondent.
   Grey, Y. C.

The bill in this case is filed for the partition or sale of certain lands, lying in the coünty of Salem, between certain tenants in common, one of whom was Prank Wright, who, pending this suit and before the sale of any lands herein, departed this life intestate.

In the lifetime of Prank Wright a judgment was entered by Charles C. Allen in the circuit court of the county of Salem, an execution issued thereon and a levy made thereunder upon his undivided interest in the lands affected by this partition suit. On this judgment and levy $778 remain unpaid.

The judgment creditor, Mr. Allen, is made a defendant because of his lien under his judgment, execution and levy on the undivided share of the defendant Prank Wright, and the master has reported in this cause, or it has been proven, that the judgment was entered and execution thereunder levied as above stated.

Since the death of the defendant Frank Wright, the partition proceedings have been prosecuted to sale. Mr. Allen,, the judgment and execution creditor, being a party defendant to this partition proceeding, has been cut off by the effect of the decree from any right or claim in the lands and relegated for his judgment debt to the proceeds of this partition sale. This is the effect of the statute. Mr. Allen is now entitled to move this court, in this partition suit, to pay the proceeds of the partition sale of the defendant Frank Wright’s share, on which Allen had levied his execution in Wright’s lifetime, to satisfy that levy.

The total proceeds of all the sales of land in this case
amount to ......................................... $1,850 00
From this must be deducted the dower sum in gross of Lydia
P. Wright, widow of Lewis B. Wright................ 145 00
$1,705 00
Also the taxed costs of the suit and counsel fees, estimated at the sum of.................... $175 00
The master’s costs and expenses of sales, estimated at ................................ 70 00
245 00
$1,460 00
208 57 Divide this into shares of one-seventh to each tenant in common to ascertain what is the share of Frank Wright, deceased .............................................
10 00 Deduct sum in gross for Marie Wright, widow of Frank Wright ............................................
$198 57

The master has ascertained that there is due to Mr. Allen on his judgment the sum of $778.

It will be noted that there are less than $200 which can be applied to pay Mr. Allen’s judgment and levy, on which $778 remain due.

At this stage of the proceedings a petition is filed in this court by the sisters and mother of Frank Wright, who themselves are parties defendant or complainant-in this suit, asking the court to make an order that they be paid nearly the whole of the share of Frank Wright, prior to Mr. Allen’s judgment, to reimburse thein the amount of money by them expended in and about the bringing of the body of the decedent Erank Wright from the State of Texas, where he died, and the expenses of his funeral and burial in this state.

The petitioners base this motion wholly upon section 66 of the Orphans Court act, as revised in the laws of 1898 (P. L. 1898 p. 738), which is as follows :

“Judgments entered of reeoi'd against the decedent in his lifetime, funeral charges and expenses, and the physician’s bill during the last sickness, shall have preference and be first paid out of the personal and real estate of the testator or intestate.”

That section is found in an act entitled “An act respecting the orphans court and relating to the powers and duties of the ordinary and the orphans court and surrogates.”

Preferences to the payment of funeral expenses were recognized at common law, Haines v. Price, 20 N. J. Law (Spenc.) 483, and by early statutes prescribing the order of payment of claims against insolvent estates, and excepting certain claims from the operation of the rule staying actions within six months after the death of the decedent debtor. Pat. L. p: 435; P. L. 1820 p. 169; Rev. L. 1820 p. 766. This earlier legislation was' enacted before the adoption of the state constitution of 1844, which first introduced the provision that a statute should have but one object, which should be expressed in its title. Constitution of New Jersey art. 4 § 7 pl. 4.

That legislation was all contained in statutes which in terms c]palt with insolvent estates, and with the duties of executors and administrators in respect to the disposal of the property of the insolvent decedent which came to their hands.

After the constitution of 1844 required each statute to have but one object, and that such object should be expressed in its title, the older legislation was re-enacted under the title “An act concerning the estates of persons who die insolvent.” Rev. Stat. 1846 p. 346 § 2.

This statute controlled the subject until the revision of 1877, when it was repealed {Bev. 1877 p. 1384), and the provisions relating to insolvent estates, were re-enacted in the Orphans Court act. Rev. 1877 p. 770 § 81 et seq. The section in the act which declares what claims against a decedent shall be preferred i| section 58. As it is collated and expressed, it is a direction to executors and administrators regarding the order in which they shall pay claims against the estates which they are settling.

This provision, to be found in section 58, above cited, is not mere rearrangement of previous enactments by way of revision. It is new legislation, because the previous and repealed statute applied only to insolvent estates, and in the re-enacted statute section 58 has been so broadened in its scope that it extends to all estates, solvent as well as insolvent.

The title of this act is “An act respecting the orphans court, and relating to the powers and duties of the ordinary and the orphans court and surrogates.” The same provision has been continued, under the same title, in the subsequent revisions (2 Gen. Stat. p. 2368 § 53; P. L. 1898 p. 738 § 66), where it appears in the language first above quoted.

It is, I think, a matter of some doubt whether provisions in the bodjr of a statute, which by its title expressed its object to be legislation regarding the ordinary, the orphans court and the surrogates, can be held to be of constitutional force when they affect the judgments of every other court in the state. It was declared by the supreme court, in Evernham v. Hulit, 45 N. J. Law (16 Vr.) 53, interpreting article 4, section 7, placitum 4 of the constitution of this state, that the scope of a statute is by that provision of the constitution limited to the object of tire act which is expressed in its title. In that case the title of the statute under consideration expressed its object to relate to the court for the trial of small causes. One of its sections, however, sought to affect the judgments of other «yurts. To this extent the supreme court held the statute to be unconstitutional and void.

In the ease at bar the object of the legislation, as expressed in the title of the act here in question, relates to. orphans courts, the ordinary and the surrogates. Nothing in the title refers in any way to judgments of other courts; but under the petitioners’ contention as to the effect of section 66, any judgment of the supreme court, or of the circuit or common pleas courts, may be nullified by postponing the application of the property upon which it is a lien to the payment of the funeral expenses of the decedent defendant.

The statutory provision refers only to judgments entered of record in the lifetime of the depedent, and does not seem to include cases in which execution has been issued on the judgment and levy made on the defendant’s lands during his life, as in the case at bar.

In 1834, in Den v. Hillman, 7 N. J. Law [2 Halst.) 180, the case turned upon the question whether a judgment which had not only been entered of record in the lifetime of a decedent, but on which execution had been issued and levied on the defendant's lands, also in his life-time, could be lawfully enforced by sale of those lands after the defendant’s death, when his estate was insolvent. The provisions of the then existing statute above referred to were invoked as controlling the case and preventing j>roceedings on the judgment and execution after the defendant’s death.

The supreme court (at p. 188) unanimously declared that where the judgment was entered in the defendant’s lifetime, and execution was tested and levy made during the same period,' the proceedings were unaffected by the statute in question, “because that statute was not-intended to interfere with executions lawfully sued out; it relates only to judgments.”

In the case at bar execution was issued and levied on the lands in question, and the plaintiff’s rights therein were fixed, all in the lifetime of the defendant. Under the principle declared by the supreme court in Den v. Hillman, the statute which the petitioners invoke to defeat the operation of the plaintiff’s judgment has no application.

Aside from the control of the present proceedings by the interpretation given to the provision in question by the law court, it is worthy of inquiry whether it is equitable, under all the circumstances of this case, to grant the petitioners’ prayer.

The .statute in question applies directly only when the decedent’s estate is in the hands of an executor or administrator in process of application to the payment of claims against the decedent’s estate. That is not the present situation. This proceeding is not a petition to the orphans court that the executor or administrator of Erank Wright may be directed preferentially to pay his funeral expenses. All that the petitioners can possibly claim here is the equitable application of the provision they have invoked—that is, they may show that under the circumstances it is just and equitable that the substantial benefits of that statute should be allowed to them in this court in this cause.

The proceeding which brought this fund under the control of this court is a suit in partition. The respondent held a judgment, execution and levy (all undisputed), charged against the share of Erank Wright in the lands sold in this suit. By the decree of this court those lands were so sold that they were discharged from the respondent’s lien. He was thus not only invited, but compelled, to see that the proceeds of the sale satisfied his levy, if he would secure any benefit therefrom. There is on file a decree for distribution, dated September 16th, 1904, directing payment of the portion raised from Erank Wright’s share to the respondent, in whole or in part satisfaction of his levy. Apparently this decree is still in force. The petitioners are. parties to this partition suit, charged with knowledge of its several steps. The sale has been had upon the above ascertainment of the position of the respondent’s judgment, and the proceeds are about to be paid to satisfy the respondent’s execution and levy. At this stage of the case, when the respondent has no longer a chance to protect himself by bidding the lands to a higher price, the petitioners intervene and ask that the money raised by the partition sale for the respondent shall be taken from him and given them to reimburse them for expenses they incurred in burying the defendant Erank Wright before any sale had been made.

The petitioners, if they had any preferential right to payment of Erank Wright’s funeral expenses out of the proceeds of the sale of the decedent’s lands, knew before the sale that they had such a claim. There is nothing to show that the respondent ever knew the petitioners asserted such a .right. The petitioners were equitably bound to announce and assert their right before the sale, so that the respondent, having notice of this claim of preference for funeral expenses, might, if he chose to do so, protect himself by bidding up the property to such a price as would not only pay the amount of his levy, but also the alleged preferential claim of the petitioners for funeral expenses.

In fact, the petitioners’ claim is disclosed for the first time only after the respondent had been assured by the master’s report and decree that the proceeds of sale should go to pay his levy, and after the sale of the lands had actually taken place under that report and decree.

In my view it would, under such circumstances, be inequitable at this late day to order these proceeds of the sale to be taken from the respondent and given to the petitioners.

I think the petitioners’ prayer for such an order for preferential payment should be refused, but without costs.


author: G-eey, Y. C.

text:
    Robert W. Pryor, receiver of E. C. Faitoute Hardware Company, v. Allan J. Gray.
    [Decided December 21st, 1905.]
    1. A bill by a receiver of an insolvent corporation alleging that the defendant under a void chattel mortgage from the corporation, by taking possession of its chattels and selling them, wrongfully realized unknown sums of money, for which an accounting is prayed, states a sufficient ground of equitable jurisdiction.
    2. A chattel mortgage, made July 13th, 1904, and not recorded, where possession, of the property was not taken thereunder until December 6th, 1904, is void.
    3. One demurring to an original bill, failing to present any existing grounds for demurrer, thereby waives any right of objection based thereon against the bill as amended .to the same extent as if he had pleaded over.
    On demurrer to amended bill.

      The bill of complaint in this cause, as amended, alleges that the complainant was, on December 16th, 1904, appointed receiver of the defendant, a corporation of the State of New Jersey, because of its insolvency, and that he has duly qualified as such receiver; that on July 13th, 1904, the defendant corporation executed to the defendant a chattel mortgage on its stock in trade, fixtures and other personal property in Newark, New Jersey, reasonably 'worth $11,000, to secure the payment of the sum of $5,000; that the mortgaged chattels remained in the possession of the defendant company until December 6th, 1904; that the said chattel mortgage was illegally recorded in Essex county register’s office, because it was neither acknowledged by the defendant mortgagor, nor was the execution thereof proven by the subscribing witness.
    The bill further alleges that on the 6th day of December the defendant, Gray, took possession of the mortgaged chattels and proceeded to sell the same at retail, and continued to do so until December 17th, 1904, when the complainant, as receiver of the insolvent corporation, took possession of the mortgaged chattels under a stipulation with the defendant’s solicitor whereby it was agreed that the said receiver should have possession of the chattels ; that they should be sold clear of the mortgage, and that the lien thereof, if of any validity, should attach to the moneys received from the sale; that all of the said chattels were, under an order of this court, sold at public auction to the defendant for the sum of $3,935, part of which -was paid in cash and part secured to be paid by the complainant’s bond, conditioned that if the mortgage should be declared illegal, and the defendant should pay the sum of $3,541.50, with interest thereon, and perform the order of the court in relation to the purchase-money, the bond should be void.
    The bill further alleges that the defendant claims a lien on the purchase-money and on the money due under said bond, and that he has in his possession a large sum of money, collected from the sale of the said mortgaged chattels between December 6th and December 17th, 1904 ; that claims against the insolvent company have been filed with the complainant, as receiver, to tlie amount of $17,411.07, and that the proceeds from the sale of the mortgaged chattels are all the assets of the insolvent company’ in possession of the receiver.
    The complainant prays that the mortgage may be decreed fraudulent and void as to him, and the lien thereof null and void; that the defendant may account to the complainant for moneys received from the sale of chattels up to December 17th, at noon, and for further relief, &c.
    The only defendant is the chattel mortgagee, who demurs to the whole amended bill and sets forth five several causes of demurrer, which will be hereafter stated.

      Mr. Malcolm MacLear, for the demurrant.

      Mr. Frank Benjamin, for the complainant.
   G-eey, Y. C.

The first cause of demurrer challenges the bill, because it does not show any facts which give this court jurisdiction, and particularly the demurrant insists that the bill shows that the mortgaged chattels have been sold clear of the mortgage, and no facts are alleged which show that the defendant claims any lien by virtue of the mortgage on either the mortgaged chattels or the money proceeds of their sale, &c.

A sufficient ground of equitable jurisdiction is stated in the allegations that the defendant, under a void chattel mortgage obtained from the insolvent corporation, has, by taking possession and sale of that company’s chattels, wrongfully realized unknown sums of money', for which the bill prays he may be decreed to account to the receiver of that company.

The bill, taking it as a whole, is also sufficiently definite in its statements of fact to show that it charges that the defendant wrongfully claims, under his void chattel mortgage, to have been entitled to sell the insolvent company’s chattels and keep the proceeds; that the mone3's in dispute were realized under an ■order of this court upon an agreement of the defendant that the mortgaged chattels should be sold clear of the disputed chattel mortgage, and that the lien, thereof, if it had any validity, should attach to the moneys proceeding from that sale.

The averments of the amended'bill inform the defendant that the subject regarding which he is called upon to respond is. his claim to a lien by virtue of his chattel mortgage upon the goods of the insolvent company and upon the fund raised by the sale of the chattel mortgaged goods, which chattel mortgage the complainant charges is void because not lawfully recorded. This notifies the defendant of the purpose of the suit which the court of errors and appeals has held is all that is required in bills in equity. Mutual Life Insurance Co. v. Sturges, 33 N. J. Eq. (6 Stew.) 328. The first ground of demurrer is overruled.

The second ground of demurrer avers that the complainant’s attack on the chattel mortgage is inefficient, because on the face of the bill it appears that the defendant had in fact taken possession of the mortgaged property before the complainant was appointed receiver for the insolvent company mortgagor.

The statute, in dealing 'with the sort of possession which may validate an unrecorded chattel mortgage, declared that it must be immediate. The complainant’s contention is that the entry of the defendant’s chattel mortgage in the mortgage-book, without either certificate of its acknowledgment or proof of its execution, was in law not a recording. The pleadings show that the chattel mortgage was made on the 13th day of July, 1904, and that possession of the mortgaged goods was taken under it on the 6th day of December, 1904, nearly six months after its execution.

In Roe v. Meding, 53 N. J. Eq. (8 Dick.) 350, the court of errors and appeals declared that the requirement of the statute regarding chattel mortgages is for immediate recording or immediate taking possession, for the obvious reason that one or the other is necessary to give notice to possible creditors of the moftgagor of the mortgagee’s interest-in the goods. In that case the delay in recording was less than three months, yet it was held to invalidate the chattel mortgage. The receiver is not limited in challenging the defendant’s wrongful acts to those done after his appointment. The second ground of demurrer is overruled.

The third ground of demurrer contends that the hill of complaint does not show that the defendant claims any lien on the moneys received from the sale of the mortgaged chattels by virtue of the mortgage, and does not show that the defendant has filed any claim with the receiver for moneys due under the chattel mortgage, or due by virtue thereof.

This is substantially answered in the above discussion of the first ground of demurrer. Upon the whole case, as exhibited by the bill of complaint, it obviously appears that the complainant, as receiver, &c., alleges that the defendant, by virtue of his void chattel mortgage and of the stipulation with the receiver, claims a lien upon the proceeds of the sale of the mortgaged goods. This ground of demurrer, therefore, should be overruled.

The fourth ground of demurrer is that the amended bill of complaint does not show that there are any .moneys due by the insolvent company to, persons other than the defendant, or that persons other than the defendant are interested in the estate of the insolvent company.

The fifth ground of demurrer is that the amended bill of complaint does not show that there are not sufficient moneys to pay all the debts of the insolvent company.

Both these grounds , of demurrer, challenging the amended bill (and indeed most of the others), might have been assigned against the original bill of complaint before it was amended. The defendant demurred to that bill, and did not then see fit to present these criticisms as grounds of demurrer. He thereby waived any right of objection for that cause to the same extent as if lie had pleaded over. Bean v. Ayers, 69 Me. 128. He may not reserve existing grounds of demurrer to an original bill, and by presenting those defects successively against amendments unreasonably protract litigation and unjustly enhance the costs. Bean v. Ayers, 69 Me. 128.

The demurrer should be overruled, with costs.


text:
    Josiah White et al. v. Ella Etta Smith et al.
    [Decided January 4th, 1906.]
    1. In a suit for partition, allowance from the gross proceeds of sale will be made to parties for taxes paid by them for the value of permanent improvements of a necessary or suitable character, placed by them upon the property at their own expense, and for lawful interest on the sums so expended.
    2. In a sdit for partition, complainants will not be required to account for rents or profits resulting from their possession of the premises where it does not appear that they excluded their co-tenants from the enjoyment of the premises, nor that they received any rents or profits from letting the premises, nor that in occupying the same as a farm they actually made any profit.
    On bill for partition. Answer, cross-bill and proofs.

      Mr. Clarence L. Cole, for the complainants.

      Mr. Louis G. Morten, for the defendants Ella Etta Smith and others.

      Mr. -John J. Crandall, for the defendants Josephine Maud Lake and Erank Lake.
   Grey, Y. C.

In this case the proofs satisfy me:

First. That, the premises described in the bill of complaint are so situated and of such character that they cannot be divided among the owners thereof, according to their several shares, without great prejudice to their interests resulting from such division, and that for this reason the property must be sold and the proceeds divided among the several owners according to their respective interests.

Second. That a proper allowance should be made to the complainants for taxes by them paid, and for the value of permanent improvements by them placed- upon the' property at their own expense, which were of a character consistent with the nature of the property, and either necessary or entirely suitable and justifiable for its development, which allowance should be paid from the gross proceeds of sale, with lawful interest. That like allowance and payment should be made to such defendants as paid taxes*on said property.

Third. That it has not been shown that the complainants received any rents or profits from the letting of the premises in question, and that it does not appear that they excluded their co-tenants from the enjoyment of the premises in common with themselves, the premises consisting of a small farm, which the complainants occupied and conducted at their own expense; nor is there any showing that in so doing they actually made a profit, and that therefore the complainants. should not be required to account for rents or profits, &e., as prayed in the cross-bill; that there is no showing of damage done to the premises by complainants, as alleged in the cross-bill, and that such unliquidated claims are not here cognizable.

Fourth. That the proofs show that the original complainants or their grantees are seized of and entitled to an equal undivided one-third part of the premises; ’ that the defendant Ella' Etta Smith is seized of and entitled to another equal undivided third part of said premises, and that George Ii. Weaver and Josephine Maud Lake are each seized of and entitled to an equal undivided one-sixth part of the same.

A decree will be advised according to these conclusions.


author: Grey, V. C.

text:
    Hazer Feinberg v. Anna Feinberg.
    [Decided January 4th, 1906.]
    1. An application for a rehearing before a vice-chancellor is governed by principles applicable to motions for new trials after verdict in cases of law.
    2. A rehearing in an equity case will not be granted to enable the applicant to impeach the credit of witnesses who testified on the original hearing.
    3. In order to justify a rehearing in an equity case for newly-discovered evidence, the new matter must be of such a character that, if it had been heard on the trial, it would probably have altered the result.
    On petition for divorce. On petition- for rehearing.

      Mr. John W. Wescott, for the defendant.

      Mr. Andrew J. King,foi: the petitioner.
   Grey, V. C.

This cause was heard on January 9th and 18th, 1905, the issue being the charge of the petitioner, Hazer Feinberg, that the defendant, his wife, Anna Feinberg, had committed adultery with one John Myers, for which reason the petitioner prayed a divorce.

On January 23d, 1905, a final decree was made, granting the prayer of the petitioner for divorce, because of the adultery of the defendant with Myers, as charged in the petition.

On July 24th, 1905, the defendant, Anna Feinberg, filed her petition in this court, alleging that the vice-chancellor, in ordering the decree for divorce, rested his conclusions upon the evidence of one Bertha Schindle, and that since the hearing the defendant has discovered “new and material evidence tending to discredit the evidence of the said Bertha Schindle,” and praying

“that the decree of divorce heretofore ordered against her may be opened and that she may be permitted to offer before this court the witnesses and affidavits attached to her petition.”

The petition for a rehearing is supported by affidavits thereto annexed, which, it is contended, exhibit sufficient grounds to open the final decree and try the cause over again. The petitioner, Anna Eeinberg, insists that they show newly-discovered evidence, which if presented to the court is of sufficient weight and credibility to lead to a different conclusion.

The affidavits address themselves to several different phases of the case, in substance, as follows: The first two affidavits recite parol statements said to have been casually made by the husband, Hazer Eeinberg; one witness swears that in July, 1904, Eeinberg said

“he was going to try to get rid of his wife, and that he had a girl who would say anything that he wanted her to say; that he didn’t care what it would cost him.”

The next witness declares that Eeinberg, one day last summer (1904), told her that

“he did not want his wife to leave him, that she went away because of the influence of her mother, who persuaded her to leave him; that her mother took her away and made all the trouble between them.”

It will be noticed that the first affidavit imputes to Mr. Eeinberg a purpose to be rid of his wife, the other a desire to keep her. Eothing identifies the girl mentioned by Eeinberg as one “who would say anything he wanted her to say” as the witness Bertha Schindle. These alleged statements, even if correctly understood and repeated in the affidavits, have neither that certainty or force as evidence which should affect the judgment of a court to open a decree for rehearing.

The next affidavits are given by John Myers, the paramour of the defendant; by Mrs. Annie Myers, his wife, and friends who visited at their home. These persons attempt to prove an alibi by showing that on Christmas eve, 1903 (December 24th), the paramour, Myers, was not at the Eeinberg house, as was proven on the hearing of the cause. Myers says, in his affidavit, that he had understood that the time of the alleged adultery was fixed as on Christmas night of 1903 (December 25th), and that tire first he knew that it was claimed to have been on Christmas eve (December 24th) was at the trial. Both Myers and his wife then testify that on December 24th, 1903 (Christmas eve), he was elsewhere.

The petition for divorce expressly names December 24th, 1903, as one of the days on which the adultery .was committed. At the hearing of the cause the accusatory testimony of the witness Bertha Schindle was given on January 9th, 1905, and was followed by an adjournment until January 18th, 1905, on which day both Mr. and Mrs. Myers were called to the stand as witnesses for the defendant. Myers was shown by undisputed testimony to have discussed his relations with Mrs. Eeinberg long before the hearing with the utmost freedom of speech. He knew,before the trial that he was accused of adultery with Mrs. Feinberg.' He went on the stand nearly ten days after the testimony was given which accused him of adultery on Christmas eve.

The incriminating admissions of Mr. Myers, proven against him at the hearing despite his denials, while not forceful to show the guilt of the defendant, Mrs. Feinberg, go far to impeach Myers’ own veracity as a witness. He assiduously attended at the hearings. I cannot believe that he took so little interest in the cause that he mistook the date when he was charged to have committed the adultery.

Other affidavits annexed to the petition (Mrs. Vaughn’s and Mrs. Naylor’s) state that Mr. Feinberg several times visited. Bertha Schindle at houses where the latter was a servant between December, 1903, and March, 1904, and this it is claimed contradicts Bertha’s testimony at the hearing, when she was questioned, “Have you seen Mr. Feinberg since the suit commenced?” and she answered, “No, sir,” and shows a conspiracy between Feinberg and Miss Schindle to present a false case and to conceal it. I am unable to give such, proof so great importance.

The last affidavit is that of David Wudlausky, who signs with a Hebrew signature a manuscript written in English. This affidavit recites a conversation alleged to have taken place in September, 1904, between Wudlausky and Eeinberg. The affidavit states that Eeinberg said

“he had a girl in Hammonton who would tell of his wife’s conduct with the policeman (meaning John Myers) ; that he had this girl fixed, and knew how she would testify; that Feinberg then and there told deponent that you could do anything with money, and that he Feinberg was sure to get his divorce.”

It is claimed that this must be held to be an admission that the petitioner corruptly suborned the witness Bertha Schindle to testify falsely. Although it is an ex parte affidavit, presumably expressed most favorably to the purpose for which it is presented ■—the securing, of a rehearing—the words used do not justify the contention. Bertha Schindle is not named nor in any way identified by any other incident than the fact that she testified to the wife’s adultery. It does not follow that the unnamed girl would testify falsely because Eeinberg knew how she would testify. That he had her “fixed” does not necessarily mean that she was corruptly fixed to perjure herself, nor does the allusion of the power of money imply its wrongful use to suborn witnesses.

A verbal admission alleged to have been made by a party to a suit, says Mr. G-reenleaf, should be received with great caution,

“consisting as it does in the mere repetition of oral statements, it is subject to much imperfection and mistake. * * * It frequently happens that the witness, by unintentionally altering a few of the expressions used, gives an effect to the statement completely at variance with what the party actually did say.” 1 Greenl. Evid. § 200.

The oral admissions ascribed to the husband in the affidavits annexed to the petition for rehearing are open to this criticism. The husband’s alleged admissions which they present do not themselves show that he had contrived a plan to set up a false case. In order to give this effect to them, the existence .of a criminal purpose on his part must be presumed.

It cannot, I think, be maintained that the testimony of the witness Bertha Schindle was a surprise to the defendant or her paramour, Myers; or that her testimony as to the date of the offence misled them, for the time when Bertha testified she saw the incriminating act accorded with that long before alleged in the petition for divorce. Nor can they say that they had no opportunity to refute Bertha’s evidence, for there was a period of nine days after they heard it before they were themselves called as witnesses. They directly contradicted, in every essential particular, the evidence which she gave, but their testimony, in view of all the proofs, was deemed unworthy of -belief, and hers to have accorded with the trend of that given by the other witnesses. It is not newly-discovered evidence introducing a new point which has come to light since the trial, but only new witnesses who attempt to discredit Miss Schindle.

The position disclosed on the hearing of the cause directly prompted the impeachment of Miss Schindle’s testimony by the defendant, if that were possible. The issue of her veracity was directly before the court. A rehearing ought not to be granted to enable the defendant to impeach her credit. 2 Dan. Ch. Pr. *1120 note b. The rule on application for a rehearing before a vice-chancellor is governed by the principles which are recognized in the law courts in cases of motions for new trials after the verdict of a jury. Warner v. Warner, 31 N. J. Eq. (4 Stew.) 549; Burrows v. Wene, 26 Atl. Rep. 890. Those courts declare it to be settled that “a new trial will not be granted upon the new discovery of witnesses who will swear against the credit of those sworn upon the trial.” Price v. Ward, 7 N. J. Law (2 Halst.) 127; Den v. Geiger, 9 N. J. Law (4 Halst.) 240.

The court of errors and appeals has declared that, in order to justify a rehearing because of newly-discovered evidence, it must be shown that the new matter offered must be of such a character that if it had been heard on the trial it would probably have altered -the judgment. Watkinson v. Watkinson, 68 N. J. Eq. 632; Richardson v. Hatch, 68 N. J. Eq. 788.

The affidavits supporting the petition for a rehearing setting forth the alleged admissions of the husband are in 'no way forceful to show even a probable subornation of the witness Bertha Sehindle. Those of Myers and his wife attempting to. prove an alibi for Myers are in no proper sense newly-discovered evidence, and so far as that of Myers is concerned cannot be accepted, because the evidence at the hearing entirely satisfied me that his denials were unworthy of belief.

In my view, the defendant has had her day and full opportunity to present her defence. The supposed new evidence set forth in the affidavits annexed to her petition for a rehearing, had it been offered at the trial of the cause, would not have changed the result.

The petition for a rehearing should be dismissed.


author: Gutsy, V. C. (orally).

text:
    Elizabeth Lloyd v. Helen Turner et al.
    [Argued December 11th, 1905.
    Decided January 12th, 1906.]
    1. A widow under her right of quarantine is entitled, until her dower is set off, either to occupy or rent the homestead at her election, without any obligation on her part to pay rent.
    2. Where the use, of a dwelling-house by a tenant in common does not amount to a denial of the rights of her co-tenants, and she does nothing to prevent them from equally enjoying the property, she is not bound to pay rent for the part occupied by her in the absence of an express agreement.
    3. Where one tenant in common collects the rents from a portion of the property, which is rented by her, she is bound to account to her co-tenants for the amount so received less reasonable expenditures for repairs, restorations, taxes, interest on mortgages, if any, insurance and the like.

      On bill, answer, cross-bill, &c.

      Mr. Howard Garrow, for the complainant.

      Mr. John 8. Westcott, for the defendant.
   Gutsy, V. C. (orally).

The bill in this case is filed for the partition of a house and lot at Fourth and Berkley streets, Camden, N. J. The property was derived from one Edward Augustus, who, at the time of his death, was seized of it in fee. He left a widow and four children him surviving, to whom, at the time of his death intestate, the fee-simple of the property descended, subject to the dower right of the widow, Mrs. Edward Augustus. At the time of the death of Mr. Augustus it is undisputed that the property consisted of a dwelling, part of which was used separately as a store, and rented out by Mr. Augustus, and of a small shop in the rear of the lot, the lower story of which he rented out and the upper story of which he used for his own convenience and business.

Mrs. Edward Augustus survived her husband, and, with, the family, then occupied the dwelling-house as their home. The law is that the homestead property of the intestate husband, in which the husband and wife resided at the time of the husband’s death, may be thereafter occupied by the widow without any obligation on her part to pay rent. It has been further held, in exposition of the status of the widow in the privilege of her quarantine, that the statute which gives her the right to enjoy “the homestead” gives her the right either to rent it to others or to occupy it for her own use, as she may choose.

I think, therefore, that as her dower estate was never admeasured to her, there should be no accounting for any portion of the home property at Fourth and Berkley streets for any occupation or renting of that property by Mrs. Augustus, the widow of the' ancestor, during her life, which lasted up to January, 1900.

It is quite plain that what her daughter, Mrs. Lloyd, did during that period was really done in behalf of Mrs. Edward Augustus, the widow of the decedent owner, for which, having; received the authority and approval of Mrs. Edward Augustus, widow enjoying her quarantine in the property, Mrs. Lloyd cannot be called upon to answer to anybody else.

This is not the only ground upon which the cross-bill rests, for the cross-bill complainant insists that Mrs. Lloyd, the complainant in the original bill, should, since the time of the death of the widow, account for the use and occupation of the dwelling-house during the period that she has occupied it for her own use. It is not shown that Mrs. Lloyd has, in occupying the dwelling-house, done anything which was in the nature of a denial of the-rights of her co-tenants in common, or that she did anything that amounted to an exclusion of the other tenants from enjoying the property with her, according to their several 'rights; nor has there been any sufficient showing that she obligated herself by express agreement to pay rent for the portion of the property which she occupied. There has been some mention made here ■that she did agree to pay rent to the other tenants for her occupation of the premises. She says she did not. The testimony that she did is not sufficient to justify any decree that Mrs. Lloyd shall pay rent for the dwelling portion which she occupied.

A claim is made that Mrs. Lloyd did not object, or that she was at least willing, to make the payment of $15 a month for rent. Testimony on this point was given by Mr. Turner. The alleged leasing was wholly by parol, .and was in its essential incidents quite uncertain. Mr. Turner, in narrating the conversation, did not say that Mrs. Lloyd' agreed that she would rent the property, and would pay $15 as rent, but only that she agreed that $15 per month was not an unreasonable rent. The alleged agreement did not specify the term for which Mrs. Lloyd was to occupy the premises; nor, as stated, does it show that there was in fact any demise thereof.

The testimony does not satisfy me that there was any agreement which either at law or in equity charged Mrs. Lloyd with an obligation to pay rent, since her mother’s death' in January, 1900, for that portion of the premises which she occupied as a dwelling-house, by herself and her family.

It is quite evident to me that the use made of the other portions of the premises stands on. an entirely different basis. Mrs. Lloyd ought to account for those rents and profits which she collected after her mother’s death in January, 1900, for the occupation by various lessees of the store part of the dwelling-house, and also for the rents and profits which she received and collected for the use of the shop in the rear of the lot. The rentals thus collected by Mrs. Lloyd should constitute the left side of the account, showing what should be charged against her. On the other hand, she is entitled to be credited for any expenditures by her made for repairs and restorations, or for the payment of taxes, interest on any mortgages • (if any there were), insurances, and such other lawful expenditures as she may have made in the care of any of the property. These should make up the right side of the account and constitute the credits to which she is entitled.

It is quite possible that, as I have settled the basis upon which Mrs. Lloyd must account, the parties may come to an agreement on that branch of the case. If they can, it would be a happy thing. If the clients will let counsel alone, it is probable that they will arrange this accounting without further contest or expense.

I will hold the matter for a week. If the parties are unable to agree, I will refer it to a master to state an account in accordance with the conclusions above expressed.


author: Stevenson, V. C. .

text:
    Felix Fittichauer v. Metropolitan Fire Proofing Company and Elmer H. Geran, auditor, &c.
    [Decided August 31st, 1905.]
    1. Nature of the statutory action for quieting titles and proper procedure therein considered.
    2. Under the act for quieting titles to real estate, it is unnecessary for the complainant to set forth the particular character of the defendant’s claim in the bill of complaint.
    3. If, in such a suit, the defendant affirmatively pleads a legal title, either party has an absolute right to have an issue at law for the settlement of the legal controversy, and, subject to the power to order a new trial, the court of chancery is bound by the result of such issue.
    4. If the defendant denies the jurisdictional facts of peaceable pos- . session by the complainant, non-pendency of any test suit, and incapacity of complainant to bring a test suit at law or in equity, the court will first try the issue of jurisdiction, on which the question of the respective titles of the parties will not be considered.
    5. In a suit to quiet title, the complainant alleged that his grantor, acting for himself and his co-owner, prior to August 11th, 1902, entered into a written contract for an exchange of the property in question, which was partly carried out by the delivery of a deed to the property to be exchanged, and that on August 11th, 1904, four days before the attachment, under which the defendant claimed, was issued, the conveyance of the property in question was made and delivered to complainant, but that, because it had not been properly acknowledged, it was taken away by one of the grantors to be' acknowledged, and was not returned until August 15th, 1904, on which date the attachment was issued, but there was nothing to show whether the attachment preceded or succeeded such delivery.—Sold, that the bill is not demurrable as(showing a valid legal title in defendant.
    On. demurrer to bill.

      Mr. Robert PL. McCarter, for the demurrant.

      Mr. Frank P. McDermott, contra.

   Stevenson, V. C. .

My conclusion is that the demurrer should be overruled.

1. It will probably be a useful preliminary to the present investigation if we consider the nature of the statutory action provided by the act of March 2d, 1870, commonly referred to as the act for quieting titles, under which the complainant’s bill is filed.

The purpose of the statute is not only to quiet titles, but “to compel the determination of claims to real estate in certain •eases.” The object of the statute has frequently been pointed out in the decisions of this court and of the court of errors and appeals. The legislature did not provide a new statutory action in favor of a complainant who had already an available action at law .or suit in equity in which he could obtain adequate relief. Jersey City v. Lembeck, 31 N. J. Eq. (4 Stew.) 255; Van Houten v. Van Houten, 68 N. J. Eq. 358. It may be that the statute embraces within its scope and regulates suits in equity under the ancient jurisdiction of the court of chancery classified as bills quia timet, or bills of peace. A complainant may have an election to proceed to have a cloud removed from his title either in the old form, according to the rules of practice and pleading which govern ordinary equity suits, or he may proceed in the very different form prescribed by this statute. This is •one of several matters which I do not pause to consider.

The point to be kept in mind in examining this peculiar statute is that its main object is expressed in the first clause of its title, viz., to compel the determination of claims to real estate in certain cases. The “certain cases” are those cases of hardship where the defendant out of possession makes a claim while the complainant in possession has no means of compelling the defendant, eithgr at law or in equity, to submit his claim for determination, and thus have it either established as valid or finally declared void. The great object of the statute is not to afford the complainant a new means of asserting and establishing his title, but to afford the complainant a means of compelling the defendant to either abandon or establish his title, or have it decreed invalid.

The procedure prescribed by this statute in this peculiar suit, in my opinion, has almost uniformly been disregarded in the suits brought under its provisions since its enactment during the last thirty-live years. What the bill of complaint shall contain is expressly prescribed in the act, and why, in all these reported cases, it appears that the bill has gone far beyond the statutory requirements I am entirely unable to perceive. The act reads as follows:

“The bill of complaint in such suit shall describe the lands with certainty and shall name the person who claims or is claimed, or reputed to have such title or interest in or encumbrance on said lands, and shall call upon such person to set forth and specify his title, claim or encumbrance and how and by what instrument the same is derived or created.”

This prescribed demand in the bill that the defendant shall set forth his title in the light of the other phraseology of the act shows plainly that the bill is not required or expected to enter into the details of the defendant’s claim. Any allegation in the bill-of the particular character of the defendant’s claim is practically surplusage. The defendant undoubtedly has a right to disregard all such allegations, and in his answer “set forth and specify” any title, claim or encumbrance which he may wish to endeavor to sustain. The bill may say that the defendant claims under a mortgage or a judgment, but the defendant may in his answer set up an entirely different title by a deed of conveyance.

I think that great confusion has been made by this persistent effort of the complainant to state unnecessarily in his bill the claim which the defendant has made or is “reputed” to have in respect of the land in question. If the complainant proves the jurisdictional facts the result is that the defendant is called upon affirmatively to set forth and maintain by proofs any adverse title or claim which he holds. The pleading of the defendant, if it sets forth a legal title, may be in effect a declaration in ejectment, and if it sets forth an equitable title, it may be in effect a bill in chancery. The complainant is under no obligation even to exhibit his own title until after the defendant has shown title. All that the complainant is obliged to show in the first instance is that he is in peaceable possession, and that no suit is pending in which the defendant’s claim, whatever it may be, may be tested, and also, that he, the complainant, is unable to bring an action at law in which the test can be applied, Jersey Gity v. Lembeck, supra, and also, I think, that he, the complainant, is unable, except under the statute, to bring any suit in equity in which such test can be applied. Van Houten v. Van Houten, supra. When the complainant has shown these jurisdictional facts he awaits the presentation by a proper plead-' ing of the defendant’s claim or title before making any disclosure of his own title. Ward v. Tallman, 65 N. J. Eq. (20 Dick.) 310. Any defendant may avoid all expense if he sees fit to abandon his claim, and in such ease a decree pro confesso goes against him without costs. Any defendant, also, who wishes to resent being unnecessarily brought into court may file an answer denying that he has ever made any claim to the land in question, and thereupon he becomes entitled to costs, the complainant not being allowed to contest the truth of such denial in order to obtain costs.

Coming how to the case where litigation occurs in this statutory action we find that the statute also prescribes somé things which the litigating defendant must allege in his answer. He is required in his answer to “specify and set forth” his estate or interest, &c., and also set forth “the manner in which and the sources through which such title or encumbrance is claimed to be derived.”

If the defendant in this affirmative pleading sets forth a legal title, either party has the absolute right to have an issue at law for the settlement of this legal controversy, and, subject to the power to order a new trial, the court of chancery is “bound by the result of such issue.” Where the complainant sets forth an equitable claim, i. e,, a claim which ho can only assert and have established by a suit in equity, then, in my opinion, neither party can compel the court of chancery to submit finally to the decision of an equitable cause of action by the verdict of a jury in a court of law. Van Houten v. Van Houten, supra.

If the affirmative pleading of the defendant which the statute prescribes sets forth a legal claim, and neither party applies for an issue at law, or if such affirmative pleading sets forth an equitable claim, then the court of chancery is to proceed with the suit on the part of the defendant which is thus brought. The statute leaves no doubt as to the course of procedure. It provides that

“when such issue is not requested or as to the facts for which the same is not requested, the court of chancery shall proceed to inquire into and determine such claims, interest and estate according to the course and practice of that court.”

What is the “course and practice” of a court of equity where a party comes forward as the actor asserting affirmatively his title or interest in real estate for. the purpose of having such title or interest determined ? The complainant, as we have seen, is not obliged to exhibit his own title in his bill, and ought not, in my opinion, notwithstanding the practice which has prevailed, to unnecessarily undertake to set. forth in detail the defendant’s claim. A court of equity, “according to the course and practice” which courts of equity have uniformly followed, ought to require the complainant to file a pleading joining issue with the1-defendant. It is immaterial whether this pleading be called a special replication, a statement (see rule 2.21 regulating inter-pleader suits) or a bill of particulars. Where the defendant sets forth an equitable claim, in large numbers of cases the pleading of the complainant in. reply thereto would be in effect an answer to a bill in chancery.

Where the defendant denies the jurisdictional facts of peace-; able possession. by the complainant, and non-pendency of any test suit and incapacity of complainant to bring a test suit at law or in equity, the practice is settled that the court will try, in the first instance, the issue of jurisdiction thus presented, and will not go into the question of the respective titles of the parties until the jurisdictional question has been -decided. Allaire v. Ketcham, 55 N. J. Eq. (10 Dick.) 169; Sheppard v. Nixon, 43 N. J. Eq. (13 Stew.) 627.

In Blakeman v. Bourgeois, 59 N. J. Eq. (14 Dick.) 473, although the answer of the defendant, after denying the plaintiff’s peaceable possession, set up the defendant’s title, Vice-Chancellor Grey confined the hearing to the question of possession, and having settled that question in favor of the complainant, advised a decree that the complainant had a right to bring the suit.

In Beale v. Blake, 45 N. J. Bq. (18 Stew.) 668, 670, Vice-Chancellor Pitney raises the question whether the defendant is under any obligation to disclose his title if he' denies the jurisdictional facts until the decision of the court on those facts has been rendered. It seems to me that where the defendant denies the jurisdictional facts, the better practice would be to require such denial to be presented by a plea or pleas.

If the “course and practice” in suits under our statute had not been marked out, in a long line of reported cases, inconsistently with the views which I have indicated, I am not sure whether or not the whole statement of the exact nature of the defendant’s claim which the complainant unnecessarily inserts in his bill ought not, on demurrer, to be rejected as surplusage. The defendant may make it surplusage by setting up an entirely different claim or title. The act also provides for a decree which “shall fix and settle the rights of the parties in said lands, and the same shall be binding and conclusive on all parties to the suit.” The main purpose, as we have seen, of the act is to afford the complainant a means of compelling “the determination of claims” to land of which he holds peaceable possession. If the claim is invalid, the decree will so declare. If the claim is valid, the decree will so declare. The statute seems to recognize the right in the complainant to have the hostile claim or reputed claim made valid and binding if the court finds it to be valid or binding, or to have it declared invalid if such is the decree of the court. There seems to be room for question whether, in case the complainant unnecessarily exhibits in his bill of complaint .a title, interest or claim held by the defendant which, according to the allegations of the bill, is valid at law or in equity, it is not the intention of the statute that the defendant should file his answer and then bring on the cause for final hearing on bill and answer and obtain the statutory decree determining exactly the extent and nature of his title or claim. This result may be precisely what the complainant desires to secure. On the other hand, if the statute is to be deemed to provide the complainant merely with a remedy where he can show that the defendant’s claim is invalid—merely the remedy of cutting off a false claim and not also the remedy of establishing and definitely settling the nature and extent of a valid claim—it would seem to follow that the setting forth in the complainant’s bill of a valid claim on the part of the defendant would be fatal to the bill on demurrer. If, however, such a demurrer should be sustained, I think it is quite plain that the only practical result would be that the complainant would amend his bill by striking out the description of the defendant’s valid claim, thus making the framework of his bill exactly comply with the statutory requirements.

I strongly incline to think that it is bad practice for the complainant to undertake to spiecify the character, nature or extent of the claims of any of the defendants. Such practice is inconsistent with the fundamental theory of this statute, which is that the complainant is to compel the defendant affirmatively to set forth and maintain his own claim and to allow the defendant to set up any title or claim which he sees fit to set up.

If the complainant files his bill and confines its allegations strictly to the statutory requirements, merely setting forth the names of the persons who deny or dispute his title, or claim to own the land or any interest therein, or hold any lien or encumbrance thereon, and calling upon the persons so named “to set forth and specify” their titles or claims, all difficulty about the practice, it seems to me, would be avoided, and several anomalous features of the practice which has so far prevailed would disappear. The defendant, if he desired to dispute the jurisdictional facts, could do so by an appropriate pleading. If the court decided the issue so presented in favor of the defendant, that would be the end of the controversy. If the court, however, found against the defendant on this issue, the order would be, as in the case of overruling a plea, that the defendant should answer over, and thereupon the defendant would file his affirmative pleading as prescribed by the statute, setting forth his title or claim, and thereafter the proceeding would follow as above indicated.

Under the practice which seems to have become established, and is sustained by the cases above cited, the defendant’s answer is split in two. The court first tries the jurisdictional question which the answer raises, and -if the result is 'not adverse to the complainant, the court holds a further final hearing, in which that part of the answer which sets out the claim or title of the defendant is for the first time noticed and disposed of. The irregularity and anomaly in our procedure under this statute have, I think, been brought about by confusing the ancient bill quia iimet to remove a cloud from a title in which the complainant sets' forth his own title and the defendant’s title, and starts, out affirmatively with the burden of proof upon him to demolish the defendant’s title or claim, with this peculiar statutory action in which the object of the bill is to compel the defendant to take the affirmative, to bring a suit at law or in equitjq to set forth any demand of any kind which he sees fit to set forth, and to give the complainant the benefit of a decree relieving the land of which he holds peaceable possession from all claims of the defendant, or establishing those claims and rendering them definite so as to inform the complainant precisely what their character and extent in fact are.

In passing, it may be observed that the practice in interpleader cases for a long time was involved in confusion quite similar to that which I think prevails now under our act to quiet titles. The complainant’s bill frequently set forth the contentions of defendants inter sese, and the answers of these defendants, like the answers in cases under the statute which we are considering, frequently denied the right of the 'complainant to the relief of a decree of interpleader, and also set up the claims of the answering defendants against their co-defendants. The result was confusion in the final hearing of interpleader cases, which has practically been removed by rule 221.'

2. I do not propose to act upon any of the views above set fortli so far as they are inconsistent with the precedents which apparently have been established without discussion in this state. The question here is whether the complainant- has set himself out of court by describing a valid claim on the part of the defendant—a claim which is enforceable at law or in equity against .the complainant, and which is so certain in character that this statutory action cannot be usefully employed by the complainant for the definition and “determination” thereof.

I shall not set forth the facts in detail. Upon the oral argument, and in the exhaustive and satisfactory briefs, most of the questions were very distinctly brought out and very thoroughly discussed. There are at least three grounds, I think, for holding 'that the claim on the part of the defendant, unnecessarily described in the complainant’s bill, is not therein exhibited as a definite, ascertained, valid claim affecting the title of the complainant and against which the complainant’s title cannot, through the statutory action, to any extent or for any purpose, be “quieted.” There may be other grounds which I do not now recall. Ko effort is made here to discuss exhaustively the merits of these two respective titles which the complainant has seen fit to set forth in his bill of complaint. ¿VII that is attempted is to show that the whole contest between the titles of the respective parties, improperly, as I think, disclosed in the bill, is one which calls for investigation, ascertainment and determination, and that the bill, therefore, should properly be retained in its present form, imperfect as it is for that purpose.

(1) The main question, perhaps, to which the greater part of the argument lias been devotee! is whether the deed of conveyance to’the complainant, assuming that it was not delivered and accepted until August 15th, 1904, is prior or subsequent to the attachment of the defendant the Metropolitan Eire Proofing Company, which was issued -on that day at an hour and minute not in any way disclosed. Counsel for complainant has expended a great deal of learning and ingenuity in seeking to maintain the proposition that the attachment must be presumed, in the absence of evidence, to have been issued at the earliest moment of the day at which it might have been issued. The clerk neglected to comply with the recent statute and endorse or record the hour and minute when the attachment was issued. P. L. -MlOJf p. SJ/S. The bill alleges that complainant does not know exactly when this attachment was issued, and calls upon the defendant to set forth and disclose this important fact, which may be conclusive of the entire controversy between the parties. It strikes my mind that a case presenting this situation is an ideal one for the use of this statutory action.

(2) The bill alleges distinctly that the deed of conveyance was delivered to the complainant on August 11th, 1904, four days before defendant’s attachment was issued. It is true that the bill alleges that, although the deed was delivered on August 11th, it was taken away by one of the grantors (Campbell) ’’ because it had not been properly acknowledged. Although the allegations of the bill on this subject are loosely drawn, and the pleader, while alleging delivery upon August 11th, seems to have considered some action on the part of the court necessary to make such delivery effective, yet, in the absence of specific objections in the demurrer, I think the pleading as a whole must be deemed to allege a complete delivery, so as to pass title on August 11th, which delivery includes acceptance by the grantee. On that day (August 11th), as a part of the whole somewhat complicated transaction, the complainant, as the bill alleges, delivered a deed to the defendant Campbell conveying property in the State of Massachusetts and took back a mortgage for $4,000, which sum he had agreed to lend. The money, however ($4,000), was retained, and I think the inference from all the allegations in the bill is that while the title of the Massachusetts property had passed to the defendant Campbell, and the title of the New Jersey property had passed to the complainant by the respective deeds which are alleged to have been delivered on August 11th, the $4,000 was retained as some security to the complainant that the title of the New Jersey property could be reported favorably by the Title Guaranty Company, and that the conveyance would be properly acknowledged so as to cut off dower rights and be capable of being recorded.

(3) The bill also alleges positively that Campbell, acting for himself and his co-owner of the property in question, on or about August 1st, 1904—certainly some time prior to August 11th, 1904—entered into an agreement with the complainant, the terms of which are set forth, which agreement involved an exchange of the above-mentioned properties, the making of the above-mentioned mortgage and loan, &c. The rule of pleading in New Jersey, however it may be elsewhere, does not require the complainant to specify that an agreement which must be in writing under the statute of frauds in order to be enforceable in fact was in writing. All that is necessary is to allege the agreement, and if the defendant denies the existence of the agreement and sets up the statute, then the complainant must prove a valid agreement, viz., one in writing. Upon the face of this bill it appears that prior to August 11th complainant became the equitable owner of this property by virtue of a contract to purchase the same, and it also appears that he partly carried out this contract by delivering a conveyance of Massachusetts property, which was a part of the consideration, and by entering-into possession. It is well-settled law that in such a situation an attachment against the vendor cannot affect the vendee’s rights.. The attachment seizes on]j what the vendor is entitled to, viz., any unpaid portion of the consideration.

The whole case, in my opinion, including both the complainant’s title and the defendant’s title, as exhibited by the bill of complaint, is one calling for determination and settlement in the statutory action in which the bill is filed. I shall advise, therefore, that the demurrer be overruled.