author: Van Syckel, J.

text:
    Madeline E. Roe et al., appellants, v. Charles E. Meding, receiver of the Butler Silk Manufacturing Company, respondent.
    1. The fourth section of the Chattel Mortgage act of May 2d, 1885, applies ■not alone to “judgment creditors,” but to all creditors of the mortgagor.
    2. Under the said fourth section, unless the mortgagee takes possession or records his mortgage immediately, his mortgage is postponed as to all creditors, whether they became such before or after the mortgage is recorded or possession taken.
    3. Immediate possession or immediate recording means as soon as may be by reasonable diligence and dispatch under the circumstances of the case.
    4 The ninth section of the act of 1885-has a twofold purpose: First, it changed the previously-existing law requiring a mortgage to be refiled, by providing that when once recorded according to the act, it should be valid until canceled; second, it enables the mortgagee, who fails to record his mortgage immediately, to preserve his lien as against all persons who become ■creditors of the mortgagor after the mortgage is actually recorded, and in that respect puts him on the same footing with one who purchases or takes a mortgage after the prior mortgage is recorded.
    On appeal from a decree advised by Vice-Chancellor Pitney, in Meding v. Roe, who delivered the following opinion.
    Bill by Charles E. Meding, as receiver of the Butler Silk Manufacturing Company, an insolvent corporation, to declare void a chattel mortgage upon its plant held by Madeline A. Roe •and one Todd. Decree granted.
    This bill is filed by a receiver of an insolvent corporation, appointed by this court, against a party holding a mortgage •upon the chattels of the corporation.. Its object is to obtain a decree of this court declaring the mortgage void. The complainant bases his equity on four grounds — First, that the mortgage was not executed in pursuance of authority for that purpose given by the board of directors; second, that it was purposely withheld from the records for several months after it was executed, and, indeed, until the day before the application for the appointment of a receiver was made to a judge of this court; ■third, that such withholding from the records was done by virtue of an agreement between the parties for the purpose of defrauding creditors; and, fourth, that the affidavit was insufficient.
    There is no dispute as to the facts. They are as follows: 'The insolvent corporation, the Butler Silk Manufacturing Company, was organized under the General Corporation act on the 14th of February, 1889, by Richard V. Butler, Abram Fardon •and James Huntoon, all of Paterson. Its object was the manufacturing of silk, and its place of business was Paterson. Huntoon was merely a nominal stockholder, and never took any part •in the affairs of the company. They were managed, as long as it existed, by Butler and Fardon. Butler was president, and •■attended to the manufacturing department, and Fardon was secretary and treasurer, and attended to the financial department. He was also teller in a national bank at Paterson. In the latter part of the year 1892 the corporation was largely in debt, and in fact insolvent. Its financial condition in this respect was concealed from its creditors, and statements made and exhibited to them •showing that it had a large surplus. About that time the •defendant Miss Madeline Roe and her brother, Augustus C. Roe, who were cousins of both Butler and Fardon, became •entitled to a considerable sum of money — nearly $10,000 — by the death of their mother; and Augustus, who seemed to be •somewhat helpless, was thrown out of a home and employment. .In this situation of affairs the defendant Madeline Roe applied to her cousin, Butler, to give a position to her brother, as employe,, in the Butler silk mill. He agreed to do so provided she and' her brother would loan the corporation the small fortune which: they were about to receive, to enable it to increase its machinery and plant, and thereby create a need of an additional man in the-works, and proposed to give them a chattel mortgage to secure them. Under this arrangement, Miss Roe. began paying the money that she received from her mother’s estate over to the corporation as fast as it came in to her, and also borrowed from her brother’s trustee his share, and paid that over to it, upon theunderstandiug that she was to have a chattel mortgage upon the plant for the whole. In fact, that mortgage was prepared in December, but was not executed until after the last payment was made, which was some time in April, 1893, when Miss Roe, by adding her own savings from her labor for years to the money she received from her mother’s estate on her own and her brother’s-account, made up the sum to an even $10,000. To secure this-sum the chattel mortgage in question was executed. It bears date on the 9th of May, 1893, and was executed on that day by Butler, as president of the company. Miss Roe made the necessary affidavit on the 18th of May, 1893. The mortgage was-prepared and the business transacted by Mr. J. II. B., a real estate agent and conveyancer in Paterson, who occupied confidential relations towards Mr. Butler. Neither Butler nor Fardonwas present when Miss Roe made the affidavit. After it was-made, Miss Roe said to J. H. B.: “ You understand, Mr. B., that this mortgage is not to be recorded until I send you word myself? And she says that he (B.) answered : “ I think so, Miss Roe.” And she says that she gave this direction to Mr. B. because Mr. Butler had said to her, when the mortgage was ready for execution, that he would prefer, for business reasons, that she would not record it; but that, as she was a woman, if at any time she grew nervous she might record it without any further conversation with either Butler or Fardon. Mr. J. H. B. placed the mortgage in his safe, and kept it there until Monday, the 31st day of July, 1893. On Saturday, the 29 th of July, Mr. Fardon was'arrested for a> criminal breach of the federal banking laws, and lodged in jail.. Miss Eoe saw him on Sunday, and, at his suggestion, immediately sent word to Mr. J. H. B. to put her mortgage on record; and he swears, and he is probably right, that he lodged it for record on Monday morning, July 31st, but the clerk’s certificate is that it was so lodged at four o’clock in the afternoon. In the meantime, during the business hours of July 31st, counsel for Mr. J. H. B. was engaged in preparing a bill for him, asking for the appointment of a receiver of the corporation, and Mr. J. H. B. made an affidavit to it on the 31st of July. Counsel presented it to a vice-chancellor on the next day, August 1st, and it resulted a few days later in the appointment of the complainant receiver. The property subject to the mortgage was sold free and clear of it by order of the court, and the proceeds are in court, subject to its disposition. Between the time of the giving of the mortgage and its filing for record, the corporation continued its business, and incurred large liabilities for materials purchased of divers dealers in raw silk in New York city. Several of these parties or their agents were sworn, and declared that they had no suspicion of any mortgage or lien, and, further, that they had, before selling the goods, made special inquiries of Mr. Butler as to whether there were any liens of any kind upon the plant of the corporation, and were assured by him that there were none. One other creditor examined the records for such liens. The proofs show that the giving of a chattel mortgage by a manufacturer tends to seriously injure his credit, and that if, in this case, the mortgage had been filed as soon as given, it is probable that none of the credits which were extended by the various dealers to this corporation after that date would have been given. The proofs further show Miss Eoe to have been entirely inexperienced in business, and innocent of any intention to defraud, and quite ignorant that such might be the effect of her holding her mortgage off the record. She had no notion what the “ business reason ” was that Mr. Butler referred to when he asked her not to record the mortgage. In December, 1892, Miss Eoe had endorsed a' note made by the company, for its accommodation, to the defendant Todd, its landlord. That note was renewed when due, with a like endorsement, and Miss Eoe became charged as endorser, and after her mortgage was recorded she assigned a half interest in it to Mr. Todd, to secure him for her endorsement, and he was made a party defendant by reason of such assignment.
    Pitney, V. C. (after stating the facts).
    The ground principally relied upon by the complainant is the withholding the mortgage from record from May 18th until July 31st, 1893, during which period the corporation had the benefit of the credit of owning this silk plant free and clear of encumbrance, and thereby acquired a mercantile credit to which it was not entitled, resulting in the incurring of very considerable indebtedness to persons who are now the creditors of the corporation, and are represented by the receiver. The right of the receiver to attack this mortgage, as a representative of creditors, cannot be disputed since the decision of the case of Button Company v. Speilmann, 5 Dick. Ch. Rep. 120, which was affirmed by the court of errors and appeals, 5 Dick. Ch. Rep. 796. The question to be decided depends upon the true construction of the Chattel Mortgage act of May 2d, 1885. Rev. Sup. p. 491. The fourth section of that act provides—
    “ That every mortgage or conveyance intended to operate as a mortgage of goods and chattels hereafter made, which shall not be accompanied by an immediate delivery, and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, having annexed thereto an affidavit or affirmation made and subscribed by the holder or holders of said mortgage, his, her or their agent or attorney, stating the consideration of said mortgage and as nearly as possible the amount due and to grow due thereon, be recorded as directed in the succeeding section of this act.”
    This section had its origin in the act of March 24th, 1864. P. L. of 1864 P- 4-93; Nix. Dig. of 1868 p. 613. That act provided for the filing of a mortgage, instead of its record, and did not require an affidavit. The words requiring an affidavit were inserted by the act of March 19th, 1878. P. L. of 1878 p. 139. The act of March 12th, 1880 (P. L. of 1880 p. 266), provided merely for the recording of chattel mortgages. It seems to have left it optional with the mortgagee whether he would record or file, making either sufficient. The act of March 25th, 1881 (P. L. of 1881 p. 226), was a revision of all the legislation on that •subject. So held by Vice-Chancellor Van Fleet in Bracket' v. Smith, 8 N. J. L. J. 16. That act omitted the clause requiring •an affidavit, but required the instrument to be recorded. That was followed by the act of 1885, in which the requisition of an ■affidavit was again inserted.
    The verbiage of the section under consideration is precisely the same as that of the original act of 1864, with the addition of 4he provision for an affidavit, except that “ record ” is substituted for “ filing.” Previous to any legislation on this subject, this branch of the law was in an unsatisfactory condition. The result of the opinion of this court in Runyon v. Groshon, 1 Beas. 86, and of that of the supreme court in Miller v. Shreve, 5 Dutch. 250, was to hold chattel mortgages, where the possession of the chattels remained in the mortgagor, prima facie void •as against creditors, but capable of being validated by proof to “the satisfaction of the trial court that the leaving them in the possession of the mortgagor was not intended for any fraudulent purpose, but was justified by the circumstances of the •case. The defect of this state of the law was twofold: On the one hand, the absence of any legalized provision for recording such mortgages, and thereby giving notice to the world of the rights of the honest mortgagee, cast upon him the burden, in ■each case, of proving his honesty and the reasonableness of his conduct in leaving the chattels in the possession of the raort.gagor, to the satisfaction of a jury, with the risk attending the uncertainty of a verdict. On the other hand, the entire honesty and good faith of the parties, and reasonableness of leaving the mortgaged chattels in the possession 'of the mortgagor, did not alter the intrinsic character of the situation as to third persons •dealing with the mortgagor. They were still liable to be misled. It followed that two classes of persons besides the immediate parties were liable to be affected by this situation — -first, the persons who dealt generally with the mortgagor, and had occasion •to give him mercantile credit, and thereby become his creditors-at-large; second, persons desiring to purchase the very property-subject to the secret mortgage. Being ignorant of the existence of the encumbrance, and seeing the mortgagor clothed with the-possession and apparent ownership of the property, the first class-would naturally give him the mercantile credit due to sucli apparent ownership; and the second class might buy and pay for chattels, the title to which would not be thereby acquired. Experience has shown that the danger to this latter class was mitigated by the beneficial intervention of the doctrine of estoppel,, as pointed out by Chief-Justice Whelpley in Miller v. Shreve, 5 Dutch. 250 (at p. 255), where he says: “Although the mortgage may not be invalid against creditors or subsequent purchasers for want of possession in the mortgagee, it by no means follows that it may not be void against subsequent purchasers by reason of the mortgagee’s suffering the mortgagor to use and manage the mortgaged chattels in such a way as to deceive bona;• fide purchasers as to the right of the mortgagor to sell and dispose of the chattels. * * * Or, as suggested by Lord Mansfield, the property subsequently sold might be held discharged from the lien of the mortgage, as sold by the assent of the mortgagee by the mortgagor, as his agent authorized to do so, and, receive the purchase-money for his benefit.” But, as to persons becoming creditors as the result of general mercantile dealing with the mortgagor, the practical result was more mischievous,, and called for and received legislative consideration and treatment, resulting in the Chattel Mortgage act of March 24th, 1864. That it was intended by this act to protect creditors-at-large is manifest by comparing its verbiage with that of the section providing for registry of mortgages of land. This last act declares that such mortgages “ shall be void and of no effect against a subsequent judgment creditor, bona fide purchaser or-mortgagee for a valuable consideration not having notice thereof, unless ” &c., while the Chattel Mortgage act provided that “ such mortgage unaccompanied by immediate delivery ” &c. “ shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless” &c. The words “good faith,” used here, have been-held to mean “ without notice.” Bank v. Sprague, 6 C. E. Gr. 536. So that, with regard to subsequent purchasers and mortgagees, chattel mortgages are put on precisely the same footing as those of real estate. But it is impossible to escape the •conviction that the legislature intended to give creditors-at-large an advantage, as against unrecorded chattel mortgages, not accorded to such creditors as to mortgages of land. As to these latter, it was held in Bank v. Jones, 5 Dick. Ch. Rep. 244; S. C. on appeal, 5 Dick. Ch. Rep. 486, that the mere withholding •a mortgage of lands from the records for a long period of time was not sufficient to render it fraudulent and void against a subsequent mortgage to secure a prior indebtedness, which, however, was recorded subsequent to the record of the older mortgage, and I think it worth while to say of this case that its particular facts must be borne in mind in applying what was there said and the cases cited. But, with regard to the Chattel Mortgage act, the use of the words “subsequent judgment creditors,” and the separating those words from “ subsequent purchasers and mortgagees ” by inserting the words “ and as against,” leaves no room for doubt as to the intention of the legislature to protect creditors-at-large. Such has been the construction put upon it by the •courts. Chancellor Zabriskie, in De Courcey v. Little, 4 C. E. Gr. 115 (at p. 119), says: “ The complainants are mortgagees, not merely negligent, but in bad faith. They made an agreement with the mortgagors not to file the mortgage [intending thereby] to preserve a false credit to the mortgagors, and to impose upon subsequent creditors and mortgagees, contrary to the provisions and spirit of the act.” He then points out the difference, alluded to above, between the Chattel Mortgage act and the Real Estate Mortgage act in this respect. In the same case, upon appeal (De Courcey v. Collins, 6 C. E. Gr. 357), Clxief-Justice Beasley (at p. 359) said: “This is a remedial statute, its object being to discourage the placing of secret liens upon personal property; and this object is obviously promoted by re•quiring that these mortgages must be recorded at the places of the residence of all such of the mortgagors as reside in this state, and in the case of others, being non-residents, that there then must be likewise a registration in the county in which the chattels are situate. I have no doubt, therefore, that in this case the-mortgage of the appellees would have been invalid as against any creditor of the mortgagors obtaining, bona fide, a subsequent lien on the articles mortgaged.” In Bank v. Sprague, 6 C. E. Gr. 530, Mr. Justice Van Syckel, speaking for the court of errors and appeals, says (at p. 537) of this act: “ The object of the-enactment was to give publicity to such transactions, and to sweep away those secret arrangements by which creditors were embarrassed and defeated and purchasers defrauded.” He holds that as between successive mortgagees the prior mortgage in date is secure against a subsequent mortgage, if it is either filed, or-possession taken under it, prior to the filing of the subsequent mortgage, and puts it upon the ground that, as between such successive encumbrances, there is no difference between the Chattel-Mortgage act and that of lands. But this decision does not cover the case of creditors-at-large who have given credit on the strength of apparent ownership. “Whatever was said by him-looking in that direction was subsequently overruled by the same-court, as will hereafter appear. And see, in this connection, the-language of Chancellor Runyon, in Williamson v. Railroad Co., 1 Stew. Eq. 277 (at p. 286), and of Vice-Chancellor Van Fleet,, in Bracher v. Smith, 8 N. J. L. J. 16, where he says: “It should be said at the outset that one of the principal purposes of all legislation on this subject has been to prevent secret pledges-of chattels being made as security for debt.”
    In view of these judicial expressions, and the evident intention, shown by the legislature to give ereditors-at-large protection-against secret liens upon chattels, let us turn again to the language of the act itself. Now, notwithstanding w'hat was said-by the learned judge in the court of errors and appeals, in Bank v. Sprague, 6 C. E. Gr. 537, it seems impossible to hold that by “ immediate delivery,” in the Chattel Mortgage act, the legislature did not mean just what it said. Of course, the words must have a reasonable construction, as applied to the subject-matter, and “immediate delivery” must be held to mean a delivery consummated as quickly as the circumstances of ;fhe case* and the character of the chattels will permit. Unless this is done the law declares that the mortgage is absolutely void as to creditors. Such a mortgage is put by the statute upon the same footing, as to creditors, as conveyances of land made without consideration, for the purpose of defrauding creditors, at the common law and under the statute of Elizabeth. This was so declared and decided in Williamson v. Railroad Co., 2 Stew. Eq. 311, head-note 9. The subject was dealt with by the learned judge, Depue, speaking for the court of errors and appeals (at p. 336), where he says: “ There is a distinction made in the statute between the creditors of the mortgagor and subsequent purchasers or mortgagees, with respect to the avoidance of the mortgage for neglect to file the same or to take immediate possession. Purchasers or mortgagees, in order to take advantage of the failure of another mortgagee of chattels to comply with the statute, must be subsequent purchasers or mortgagees, taking their title under the mortgagor in good faith. A purchaser or mortgagee acquiring his rights with notice of the existence of the antecedent mortgage does not obtain his title in good faith. Consequently, possession taken of the mortgaged property under a prior chattel mortgage, however long postponed, will give it priority over a subsequent purchase or mortgage, if possession be taken in fact before such subsequent sale or mortgage was made. But no such qualifications apply as against the creditors of the mortgagor. Their rights may have accrued prior or subsequent to the mortgage, and yet they will be entitled to the benefit of the statute. Knowledge of the existence of a chattel mortgage executed by the debtor will not preclude a creditor from availing himself of the objection that the mortgage is void because it was not accompanied by immediate delivery of the things mortgaged, followed by an actual and continued change of possession. * * * The distinction between creditors and subsequent purchasers or mortgagees, in this respect, was recognized in the opinion of this court in Bank v. Sprague, 6 C. E. Gr. 530. The chancellor’s construction [in this case 1 Stew. Eq. &185 hot. 886 top] of the statute holding that possession of the chattels mortgaged, taken before judgment recovered, will not give validity to the mortgage, as against the execution creditor, if the mortgage was not filed according to the provisions of the act, and there was not an immediate delivery and continued change of possession of the things mortgaged, was correct.” This language removes whatever doubt there may have been thrown on the subject by what was said about immediate delivery by the same court in the former case of Bank v. Sprague. The court, in Williamson v. Railroad Co., followed the case of Thompson v. Van Vechten, 27 N. Y. 568, considering the Yew York statute, which is precisely similar to ours. The same doctrine was reiterated in Button Company v. Spielmann, 5 Dick. Ch. Rep. 120; affirmed on appeal, 5 Dick. Ch. Rep. 796. In 5 Dick. Ch. Rep. 128, the learned vice-chancellor says: “ The statute of frauds makes a deed executed in fraud of creditors absolutely void as against the creditors of the grantor, and the statute under consideration makes a chattel mortgage executed in disregard of its requirements absolutely void as against the creditors of the mortgagor. To invalidate the first, fraud must be shown, and to invalidate the second it must appear that the statutory requirements have not been observed in its execution; but when the first has been shown to be fraudulent, and when it appears that the second was not executed in compliance with the requirements of the statute, then both are placed, by positive law, in precisely the same category; both are then without the least legal force as against creditors, and must be so treated by the courts. To invalidate a chattel mortgage executed in disregard of the requirements of the statute, the person assailing its validity is not required to show, in addition to such fact, that it was executed to defraud creditors. The statute requires nothing of that kind, but, on the contrary, expressly declares that, if the statutory requirements have not been observed in its execution, it shall for that reason, and that reason alone, be treated as void as against creditors. The fault which renders it void as against creditors is not fraud, but the failure of the mortgagee to perform a duty which the statute imposes upon him.” And see Martin v. Bowen, 6 Dick. Ch. Rep. 452 (at p. 460). This doctrine does not give creditors the right to come into court and dispute the chattel mortgage before they have obtained a judgment, or otherwise established their position in court. They must still do what they must do in the case of a fraudulent conveyance of land — establish their right to come into court as creditors. Button Company v. Speilmann holds that a receiver of an insolvent corporation represents the creditors, and gives them the standing of judgment creditors. We thus see that the statute has a dual aspect or character, being at once a statute protecting creditors against fraudulent encumbrances, and a statute providing notice by registry of honest encumbrances in order to establish priorities of liens according to merit.
    Now, with this judicial exposition, it seems to be impossible to hold that if the legislature intended that, in-order to give a chattel mortgage validity as against creditors, it must either be accompanied by immediate change of possession or filed for record, it did not mean that it should be so filed immediately. It would be absurd to hold that while a mortgagee could not save his mortgage from the ban of the statute by taking possession at a period long after it was executed, but prior to the ■recording of the judgment by the creditor, he might still save it by filing it for record at such late day. It would be self-stultification for the legislature to give creditors protection against a false credit due to the apparent ownership of chattels subject to ■secret liens by prescribing in one breath the remedy of the publicity due to an immediate change of possession, and take it ■away in the next breath by legalizing, as an alternative to such publicity, the very secret lien against which protection was needed. Looking again at the language of the act as it was ■originally enacted, before the insertion of the clause requiring •the affidavit, it seems to me that it is quite in accordance with ■sound rules of construction to hold that the force of the word '“immediate” extends throughout the sentence, and applies to the “filing or recording” as well as to the “delivery of possession.” Its classification as an adjective does not interfere with this construction. The sentence, in my judgment, should be construed as if it had been written thus:

      “ Every mortgage of chattels shall be absolutely void as against the creditors of the mortgagor and as against subsequent purchasers and mortgagees in good faith unless it be accompanied by an immediate delivery and followed by an actual and continued change of possession of the tilings mortgaged, or [a true copy thereof be filed] [be recorded] as directed in the succeeding section of this act.”
    Read in that way, there can be no doubt that the force of the word “ immediate ” would reach both members of the sentence. It is hardly necessary to say that the subsequent interjection of the clause requiring an affidavit, which still further separated the members of the sentence now. under consideration, did not have the effect of altering the construction. The construction which requires an immediate filing (recording) as well as an immediate delivery is that which has been put by the New York courts upon their statute, which is precisely like our original act. Thompson v. Van Vechten, 27 N. Y. 568. The issue there was between a. chattel mortgage, filed several months after its execution, and a judgment recovered after the filing of the mortgage, founded upon a debt incurred between the date of its execution and its-filing. Chief-Justice Denio (at p. 581) says: “When the debt was contracted, Shaw’s mortgage was in existence, having been-executed the preceding February, but it was not filed until more-than a month afterwards. Furthermore, Shaw was in default for not refiling his mortgage from the 7th of July, 1855, inclusive,, down to the time of the marshal’s sale. I am of opinion that each of these omissions have operated to give the executions the preference over the mortgage. The statute of 1833 declares that a mortgage not filed (where there is no delivery of possession) shall be absolutely void as against the creditors of the obligor. P. L. of 1833 oh. 279 § 1. It is argued that this embraces only creditors-who have obtained judgments and executions during the time when the omission to file existed. If this were so the act would not, in many cases, accomplish any beneficial purpose. One proposing to part with money or property to another, under a contract to be repaid at a future time, could obtain, no information for his-guidance, by a search at the proper office. But it was the apparent, and I think the real, object of the act to prevent the setting up of secret mortgages against persons who might deal with the-mortgagor on the faith that his property was not thus encumbered! It is true the mortgage cannot be legally questioned until the creditor clothes himself with a judgment and execution, or with some legal process against his property, for creditors cannot interfere with the property of their debtors without process. But, when they present themselves with their process, they may,
    I think, go back to the origin of their debt, and show, if' they can, that when it was contracted the encumbrance with which they are now confronted existed, and was kept secret by being withheld from the proper office. I observe that it is insisted that the bank or its assignee cannot object to the default in filing the mortgage before the debt was contracted, because it is not shown that the notes were negotiated to them during that time. But I think the right to a preference over the unfiled mortgage attaches to the debt, and accompanies it when transferred to another in the course of the negotiation of commercial paper P This doctrine has never been questioned, but always followed, in that state, the latest case being Karst v. Gane, 136 N. Y. 316. Numerous authorities in other slates were cited at the argument, but I deem it not worth while to refer to them here. The construction put upon this section of the statute by our sister State of New York is, in my judgment, founded in reason, and should be adopted. .
    It remains to consider whether this construction is discordant with the ninth section of the act, which provides—

      “ That every chattel mortgage hereafter recorded pursuant to the provisions of this act shall be valid against the creditors of the, mortgagor, and against subsequent purchasers and mortgagees from the time of the recording thereof until the same be canceled of record in the manner now provided by law for canceling of mortgages of real estate.”
    This section' was first introduced, in a slightly different shape, in the act of March 12th, 1880 (P. L. of 1880 p. 866), and in its present shape in the act of March 25th, 1881 (P. L. of 1881 p. 886). Its object seems to have been to give the same value and effect to the mere recording that by the original act was given to filing the instrument, and leaving it in the custody of the officer for inspection by interested parties. Reliance is, of course, placed! 'upon the words, “ shall be valid from the time of the recording thereof.” Does that expression mean valid as against all parties, •or only as against subsequent purchasers and mortgagees? If the former, then the dual aspect of the act established by the •cases above cited is at once destroyed, and it becomes no more than a mere act providing for notice to subsequent purchasers, •encumbrancers and judgment creditors, precisely like the Land Mortgage act, and all its value and force as an act against fradulent encumbrances for protecting unsuspecting creditors from the •effect of secret liens on personal property is destroyed. Such a ■construction should not be adopted unless no other reasonable one offers. I think the section should be construed distributively, -and the words “ from the time of the recording thereof” confined in their application to subsequent purchasers and mortgagees. Such construction preserves the symmetry and' dual aspect of the act, and makes all its parts accord with each other. The remedy against the false credit of apparent ownership of property subject to secret liens, provided by the fourth section,stands by the side of the provision for notice as against subsequent purchasers and mortgagees, undisturbed by this ninth section. Here, again, the arrangement of the verbiage throws some light on the question. The two members of the sentence are separated by a comma after the word “mortgagor,” the last word of the first member, and the second member is commenced by the words “ and against,” the word “ against” being repeated. Now, I can see no reason why the sentence should have been thus divided and that word “against” repeated, if the legislature intended to put creditors, purchasers, and mortgagees all on the same footing, and take away from creditors-at-large what was so plainly given them by the fourth section.. For these reasons, I am unable to see that the ninth section was intended in any wise to affect the construction of the fourth séction.
    It is next to be observed that the statute lays down a hard and fast rule governing these transactions which, so far as regards creditors-at-large, is not affected by the honesty and innocence •of the motives and intentions of the parties, or by the solid consideration paid. The rule which prevails in conveyances of land' not governed in this respect by statutory regulation, that when a full consideration is paid the fact that the motive of the grantor in making the conveyance was to defraud his creditors will not avail to render it void as to them unless the grantee had notice-of such intention, and participated in it, cannot apply here. Miss Roe must indeed be held, upon the proofs, to have been entirely innocent of any intention to mislead the company’s creditors, and quite ignorant that withholding her mortgage from record might have that effect. But such innocence and ignorance cannot help her in the face of the statute. The intrinsic and insuperable difficulty in her way is that she made use of certain machinery which the law permitted her to use with complete safety only upon certain conditions, and those conditions she has not fulfilled. She was misled into omitting to fulfill them by her misplaced confidence in her relative, and deliberately directed her agent to keep her mortgage in his safe, and not put it on record until she directed him to do so. That direction she withheld for ten weeks. That delay was fatal, and the decree must be against her. It is hardly necessary to say that Mr. Todd can have no better standing in this respect than his assignor had. This result renders it unnecessary to consider the other grounds relied upon by the complainant.

      Mr. John W. Qriggs, for Madeline E. Roe et al.

      Mr. Eugene Stevenson, for the receiver.
   The opinion of the court was delivered by

Van Syckel, J.

This bill is filed by the receiver of an insolvent corporation, appointed by the court of chancery, against Madeline A. Roe, who holds a mortgage upon the chattels of the corporation, to obtain a decree declaring the mortgage void as to creditors. Between the time of giving the mortgage and its filing for record, the corporation continued its business and incurred large liabilities, which were unpaid when the receiver was appointed.

This appeal is taken from the decree of the court of chancery -declaring the mortgage void as to the creditors represented by the receiver.

The case of Receiver v. Spielman, 5 Dick. Ch. Rep. 120, which was affirmed by this court, 5 Dick. Ch. Rep. 796, establishes the right of the receiver to challenge the validity of this mortgage.

The decision of the controversy involves the true construction of the Chattel Mortgage act of May 2d, 1885. Rev. Sup. p. 491.

The fourth section of that act provides— '

That every mortgage or conveyance intended to operate as a mortgage of goods and chattels hereafter made, which shall not he accompanied by an immediate delivery and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good iaith” &c.,

unless the mortgage has annexed an affidavit as specified in said fourth section and is recorded as required by the fifth section.

The language of this act is the same as that of the original act of 1864 (P. L. of 1864 P 493), with the addition of the provision for an affidavit, except that “ record ” is substituted for “filing.”

That these acts were intended to protect creditors-at-large is apparent from the fact that the draughtsman did not adopt the language of the act requiring the registry of mortgages of real estate.

That act provides that real estate mortgages

shall be void and of no effect against a subsequent judgment creditor, hona fide purchaser or mortgagee for a valuable consideration not having notice thereof unless recorded” &c.

The omission of the word “judgment” before “creditors” in the acts of 1864 and 1885 is an unmistakable indication that there is no limitation of the class of creditors to which they shall apply; not “judgment creditors” alone, as in the Real Estate Registry act, but all creditors without exception.

Our cases uniformly hold that the object of these enactments was to give publicity to liens upon personal property, and to sweep away secret arrangements, by which creditors were embarrassed and defeated. De Courcey v. Little, 4 C. E. Gr. 119; S. C., 6 C. E. Gr. 357; Bank v. Sprague, 6 C. E. Gr. 530.

And the effect as to creditors of the failure to take immediate ■possession or to record the chattel mortgage has been passed upon by this court.

In Williamson v. Railroad, 2 Stew. Eq. 336, Mr. Justice Depue, in delivering the opinion of the court, says: There is a distinction made in the statute between the creditors of the mortgagor and subsequent purchasers and mortgagees, with respect to the avoidance of the mortgage for neglect to file the same, or to take immediate possession. Purchasers or mortgagees, in order to take advantage of the failure of another mortgagee of chattels to comply with the statute, must be subsequent purchasers or mortgagees, taking their title under the mortgagor in good faith. A purchaser or mortgagee acquiring his rights with notice of the existence of the antecedent mortgage, does not obtain his title in good faith. Consequently, possession taken of the mortgaged property under a prior chattel mortgage, however long postponed, will give it priority over a subsequent purchase or mortgage, if possession be taken, in fact, before such subsequent sale or mortgage was made. But no such qualifications apply as against the creditors of the mortgagor. Their rights may have accrued prior or subsequent to the mortgage, and yet they will be entitled to the benefit of the statute. Knowledge of the existence of a chattel mortgage executed by the debtor, will not preclude a creditor from availing himself of the objection that the mortgage is void, because it was not accompanied by immediate delivery of the things mortgaged, followed by an actual and continued change of possession. The distinction between creditors and subsequent purchasers or mortgagees in this respect, was recognized in the opinion of this court in National Bank of Metropolis v. Sprague, 6 C. E. Gr. 530.”

The opinion further declares that “ the chancellor’s construction of the statute, holding that possession of the chattels mortgaged taken before judgment recovered, will not give validity to* the mortgage as against the execution creditor, if the mortgage-was not filed according to the provisions of the act, and there was not an immediate delivery and continued change of possession of the things mortgaged, was correct.”

It must therefore be conceded that the correct interpretation of the fourth section of the act of 1885 is, that if the mortgage-is unrecorded, the failure to take immediate possession postpones-the mortgage to all creditors of the mortgagor, as well those who become creditors before possession is taken, as those who-become creditors after there has been a failure to take immediate-possession the mortgage by the terms of the act is invalidated by such delay as to creditors.

I agree with the vice-chancellor, that the force of the word “ immediate ” extends throughout the sentence, and applies to the “filing or recording,” as well as to “the delivery of possession.”

The protection to creditors would be slight if the mortgagee could retain his priority over creditors by filing his mortgage-long after it was taken by him, instead of taking possession of the goods mortgaged. The policy of the statute cannot be so-easily defeated. Immediate possession or immediate recording means as soon as may be by reasonable .dispatch under the circumstances of the case.

The effect of the ninth section of the act of 1885 remains to-be considered. It is as follows:

That every chattel mortgage hereafter recorded pursuant to the provisions of this act shall be valid against the creditors of the mortgagor, and against subsequent purchasers and mortgagees from the time of the recording thereof until the same be canceled of record, in the manner now provided by law for canceling of mortgages of real estate.”

This section had, manifestly, two objects in view.

One was to change the law requiring a mortgage to be refiled,. and to provide that, after it was recorded according to law, it should be a valid encumbrance until it was satisfied or canceled , of record.

The other purpose was to modify the rule which had prevailed under the interpretation previously given to the language of the fourth section of the act of 1885.

As before stated, if the mortgagee fails to record his mortgage immediately, he cannot, according to the fourth section, regain his position as against creditors of the mortgagor by after-wards recording it, whether they become creditors before or after such recording.

In my judgment, the purpose of the ninth section was to enable the mortgagee who failed to record his mortgage immediately, to preserve his lien as against all persons who become creditors of the mortgagor after he records his mortgage, and in that respect to put him on the same footing with one who purchases or takes a mortgage after the prior mortgage is recorded.

This interpretation is in harmony with the policy of the registry law, which is directed against secret liens and not against known encumbrances, and it gives full effect to the words “ from the time of the recording thereof until the same be canceled of record.” It is also just in its operation, as there is no good reason why the law should favor a general creditor, who has notice from the record, more highly than it does a purchaser or mortgagee with like notice.

Unless so construed, it must be held either that these words in the ninth section have no effect whatever, so far as credito'rsat-large are concerned, which is not permissible if reasonable effect can be given to them, or that a filing at any time, however long, after the credit is given, entitles the mortgage to priority over the creditor.

The latter construction would nullify the fourth section of the act, so far as it applies to general creditors, and sweep away the guard against secret liens.

The mortgage of the appellants was not recorded as prescribed by the act of 1885, and it is, therefore, subsequent and subject to the claims of all persons who became creditors of the mortgagor before the mortgage was recorded, but is prior to the claims of all those who became creditors after it was recorded. In this case it appears that all the credits were given before the mortgage was recorded, and the decree should therefore be affirmed.

For affirmance — The Chief-Justice, Garrison, Gum-mere, Lippincott, Magie, Van Syckel, Bogert, Brown, Krueger, Sims — 10.

For reversal — None.


source: Caselaw Access Project

license: Public Domain

text:
    Charles Feder, appellant, v. John A. Van Winkle, receiver, respondent.
    1. Chattels must, to constitute them fixtures, be actually annexed to the real estate or something appurtenant thereto. They need not necessarily be attached to the building; that is one way of annexing them to the soil, but not the only way.
    2. To satisfy this test, it is not material whether the substructure is brick or wood, or whether the machinery is annexed to the building or rests upon a foundation securely laid for it in the soil, and to which it is fastened.
    3. The fact that the chattels in controversy may be removed and sold for other uses, or that they were not made for special adaptation to the buildings in which they are placed, is not decisive of their character. Those qualities are mere circumstances to be considered.

      4. There must be actual annexation with an intention to make a permanent accession to the freehold, but it is not necessary that there be an intention to make the annexation perpetual. The intention must exist to incorporate the chattels with the real estate for the uses to which the real estate is appropriated, and there must be the presence of such facts and circumstances as do not lead to but repel the inference that it is intended to be a temporary annexation.
    5. The chattels in this case were actually annexed to the freehold; they were fitted for and applied to the use to which the real estate was appropriated, all being designed for and necessary to the prosecution of a common purpose. Thus the machinery and land became unified and incorporated together as a whole, subject to the lien of the real estate mortgage.

      On appeal and cross-appeal from a decree of the chancellor, •dated February 11th, 1895, in Brown v. Riverside Bridge and Iron Works, an insolvent corporation, on the application of the receiver of said corporation.

      Mr. John W. Griggs, for Feder.

      Mr. Eugene Stevenson, for the receiver.
    The opinion of the court was delivered by
   Van Syckel, J.

The controversy in this case is between the appellant, who has :a real estate mortgage, and John A. Van "Winkle, receiver of the Riverside Bridge and Iron Works, an insolvent corporation, and relates to certain machinery which was used in its business of manufacturing structural and bridge iron. The said company "had been engaged for fourteen or fifteen years in carrying on its business prior to its insolvency.

It occupied a tract of about two acres of land, on which the buildings in which the business was carried on were erected.

The buildings were—

1. The main shop, sixty by one hundred and sixty feet. It was a mere shed, having no floor except the natural earth.

2. The office building.

3. The blacksmith shop, which also had no floor.

4. The storehouse.

5. The foundry, which had no floor.

6. The machine shop, which was part of the main shop and ■had a wooden floor.

7. The templet shop on the second floor over a part of the main shop.

8. The engine-room, from which power was supplied to the •different machines.

All the buildings were frame, and were practically joined together as one enclosure, the pipes, shafting and other appliances running from one into the other. The appellant held a mortgage, given May 15th, 1889, which covered the real estate by its description, and also contained the following clause:

“Also all steam engines, boilers, shafting, belting, pulleys, hoisting apparatus and all other machinery whatsoever, with all connections, fixtures and appurtenances thereto belonging upon said premises or'in the buildings erected thereon or any of them.”

This, mortgage was duly recorded as a real estate mortgage on the day it bears date.

In order to establish the claim of the mortgagee to the machinery as against the receiver, it must appear:

First. That the chattels were actually annexed to the real estate or something appurtenant thereto.

Second. That they were applied to the use or purpose to which that part of the realty with which they were connected was-appropriated.

Third. That they were annexed with the intention to make a permanent accession to the freehold.

This case must be adjudged by the law as propounded in the following cases in this court: Blancke v. Rogers, 11 C. E. Gr. 563; Penn Insurance Co. v. Semple, 11 Stew. Eq. 575; Speiden v. Parker, 1 Dick. Ch. Rep. 292.

The difficulty arises in applying the rule; each case must be determined according to its particular facts and circumstances.

The chattels must, to constitute them fixtures, be actually annexed to the real estate or something appurtenant thereto.

They need not necessarily be attached to the building; that is one way of annexing them to the soil,.but not the only way.

A steam engine set upon a brick foundation laid in the earth without any attachment to the building is unquestionably a fixture.

In Speiden v. Parker, supra, a derrick set in the ground to hoist stone, and a track laid on ties in the ground on which cars were run, were held to be fixtures.

So that to satisfy this test, it is not material whether the substructure is brick or wood, or whether the machinery is annexed to the building, or rests upon a foundation securely laid for it in the soil, and to which it is fastened.

Neither is the fact that the things in question may be removed and sold for other uses, or that they were not made for special •adaptation to the buildings in which they are placed, decisive of their character. Those qualities are mere circumstances to be considered, but the presence of them does not necessarily withdraw machinery from the real estate mortgage. A steam engine, to take on the qualities of a fixture, need not be made specially for the building in which it is planted. It may, like any other piece of mechanism, be removed and used with equal advantage in any other establishment for which it will furnish sufficient power.

The same observation will apply to other articles which, in the court below, were properly adjudged, in accordance with almost •all cases on this subject, to be fixtures.

There must be actual annexation with an intention to make a permanent accession to the freehold, but it is not necessary that there be an intention to make the annexation perpetual. A test ■so severe would be impracticable in its application.

The intention must exist to incorporate the chattels with the real estate for the uses to which the real estate is appropriated, and there must be the presence of such facts and circumstances as do not lead to but repel the inference that it is intended to be a temporary annexation.

In Blancke v. Rogers two machines were the subject of con-troversy—a “number one, four-sided, inside moulding machine” and a “number one clipper, planer and matcher.”

The opinion says that no adjustment was made of* them to fit, in anywise, to the place where they were put for use. They were placed in the building, upon the floor of a room, without support. One was not attached in any way to the soil or building ; the other was partially bolted to the floor with screw-bolts. 'They were movable in the building and were moved about at the convenience of the owner, and run from different parts of the shafting. Blancke v. Rogers, 11 C. E. Gr. 565, 568.

The learned justice who delivered the opinion of the court was clearly right in saying that, while such chattels may be •so annexed to and incorporated into the realty as to become, through the manner of annexation and the purpose of the owner,, a part of the freehold, yet there was an absence in that case of evidence to show such annexation and intention.

•In Penn Insurance Co. v. Semple the machines were fastened to the floor by small screws, to steady them, and in their use-some were moved from one place in the building to another.

This court said: There was no evidence in any act of the owners, or in any circumstance growing out of the organization or manner of conducting the manufacturing establishment,, showing a design on the part of the owners to make a permanent addition of the property in dispute to the realty.”

The later case of Speiden v. Parker was a controversy respecting the character of certain appliances used in connection with a stone quarry and dock in Essex county.

They consisted of three' boilers, two engines, two hoisting gears, three derricks and a steam-pump, with connecting pipes,, valves and pulleys, all located in or near the quarry, and a railroad track laid from the quarry to the dock on Passaic river, to-transport stone, and two derricks at the dock, to transport the-stone to boats.

The stationary machinery was fastened in the ground and was-used for the only purposes to which the real estate was put. Upon these facts this court rested its conclusion that these appliances were attached to the freehold with the intention of making-them part thereof. The opinion of this court was unanimous and was concurred in by Mr. Justice Knapp, who delivered the opinion of the court in the two cases last cited.

Not one of the implements involved appeared to have been specially adapted to the place in which it was used — some were-set in the earth — and all could have been removed and applied to.the prosecution of a like business elsewhere.

The decision must rest upon the facts that the appliances were-actually annexed; that they were adapted to and used in the-business.for which the realty was held by the owner; that a-common purpose was to be promoted by attaching -the chattels-to the freehold; that the just inference was that the annexation! was intended to continue so long as the business was prosecuted on those premises, and that the enterprise was intended to be permanent in the sense in which that term is used in business transactions — permanent as contradistinguished from temporary.

It will be necessary, therefore, to look at the controlling facts of this ease before us to determine whether there was an absence of intention to incorporate the machinery with the real estate, as in the Blancke Case, or the presence of such intention, as in the Speiden Case.

The following is a brief statement of the machines included in the petition of appeal, and the manner of their annexation:

Numbers 1, 2, 4, 5, 8, 10, 12, 13, 20, 21,' 25, 26 and 52 are heavy machines, most of them weighing from two thousand pounds to six thousand pounds. They rest upon large timbers laid in the earth to their full depth, and they are fastened to them by bolts running down through the timbers.

Numbers 49, 50 and 51, in addition to the heavy timbers to which they are fastened at the base, are also fastened down into a subfoundation of concrete, and for them the building was adaptéd by cutting holes, and running pipes from the boilers in the boiler-house, one hundred feet away.

Numbers 15,16,17 and 30 are fastened to columns of the shop by bolts, and other fastenings in some cases.

Numbers 5, 14 and 46 are fastened by iron or wooden rods, or both, let down from the beams or rafters above.

Numbers 28, 29, 40, 41, 42 and 45 are fastened to the floor by lag screws, which are heavy bolts with a screw. The lightest in weight is four hundred pounds, and the heaviest is eight thousand pounds.

Numbers 1 and 2 have power applied by a belt coming through a hole in the roof.

Numbers 45 and 46 were adapted for use by the adjustment of timbers and braces in the building, and the cutting of holes through the floor for running the belt.

In view of these facts, I am of the opinion that these chattels did not retain the character of personalty, as in the Blancke Case, but were transmuted into realty, and passed to the mortgagee as in the Speiden Case. In no respect was that case stronger for the mortgagee than is this. If all the tests necessary to constitute the chattels fixtures were satisfied in that case, they surely are in this case.

The various appliances were actually annexed to the freehold. They were fitted for and applied to the use to which the real estate was appropriated, all being designed for and necessary to the prosecution of a common purpose. Thus the machinery and laud became unified and incorporated together as a whole.

The business had been carried on for fourteen years, and save for business disaster might, and probably would, have been prosecuted indefinitely. The machinery employed, the mode of its annexation and manner of its use, in connection with the realty as an entirety, indicated not a temporary but a permanent accession.

The fact that the machines might be removed and utilized elsewhere will not, under the circumstances of this case, serve to sever them in legal contemplation from the freehold.

The decree below should be reversed as to all the articles above specified, and a decree rendered in accordance with the views herein expressed.

For reversal — Garrison, Gummere, Magie, Van Syokel, Bogert, Brown, Krueger, Talman — 8.

For affirmance — Ludlow, Smith — 2.


author: Mague, J.

text:
    Caroline M. Babcock, appellant, v. William P. Standish, respondent.
    Money paid by one partner to Ms individual creditor in satisfaction of a just debt, and received by the creditor without knowledge or notice that it is partnership money, may be retained by such creditor against the claims of the partnership or the other partners, although it was, in fact, money derived from the sale of partnership property — cditer as to partnership property transferred •in payment of an individual debt.
    'On appeal and cross-appeal from a decree advised by Vice-"Chancellor Van Fleet, whose opinion is reported in Standish v. Babcock, 7 Dick. Ch. Rep. 628.

      Mr. Cortlandt Parker, for Standish.

      Mr. Frank Bergen, for Babcock.
    'The opinion of the court was delivered by
   Mague, J.

The decree appealed from charged upon lands of Caroline M. Babcock the sum of $921.50, with interest from January 10th, 1889, in favor of William P. Standish, and directed that, unless !tliat sum with costs should be paid within a stated time, said lands should be sold to raise what was thus charged thereon.

Caroline M. Babcock, who was one of the defendants below, •appeals from the decree, on the ground that it was erroneous to ■charge her lands with any part of that sum.

William P. Standish, who was complainant below, appeals from the decree and contends that it was erroneous in not -charging on said lands a larger sum.

These appeals have been argued together.

To make intelligible the conclusions I have reached upon the •case presented, a brief statement of the pleadings, showing the ■issues between the parties, is necessary.

The bill was filed by Standish against Caroline M. Babcock •and Frederick A., her husband. It charged that Frederick A. Babcock, Joseph W. Moyer and Standish, in 1884, entered into -a written agreement of partnership in the business of purchasing ■and selling coal lands in Schuylkill county, Pennsylvania; that under that agreement lands were purchased and sold at a profit, and the proceeds of the sale were received by Frederick A. Bab-coek; that in 1890 Standish filed a bill in our court of chancery against Babcock and Moyer for an accounting and settlement of' the partnership affairs, and it was thereon decreed, on October 10th, 1892, that Babcock was indebted to Standish in $4,941.73,. said sum being Standish’s share of said profits; that said profits-arose from the purchase and sale of lands in said county which were bought in 1884, and sold to one Frisbie on January 8th,. 1889, for $15,000, which sum was then paid to said Babcock j. that on January 10th, 1889, said Babcoeck, out of said sum so-received, paid off a mortgage which then encumbered lands of his wife amounting to $3,500 of principal and the interest then due thereon.

The bill also charged that the decree remained unsatisfied, and that Frederick A. Babcock had property which could not be-reached by execution, and there was a prayer for discovery against him.

As to Caroline M. Babcock, the prayer was that the sum paid: by her husband in satisfaction of the mortgage on her lands should be made a charge and lien on said lands in favor of Standish, aud that they might be sold to raise and pay him that amount.

The bill did not call for answers without oath. .

Caroline M. Babcock, by her answer, denied knowledge, or-information justifying belief, whether the agreement of partnership set out in the bill was ever entered into, or whether, under-it, lands were purchased and sold at a profit, or whether the proceeds of any such sale were collected and received by her husband.. She admitted that Standish had filed a bill in the court of chancery, against Moyer and her husband, for an account and settlement of the affairs of the alleged partnership, but averred that it was also filed against her and one Edward M. Babcock, and,, after having been duly tried, had been dismissed upon the merits-as to her. She admitted, on information and belief, that such a-decree as was set out in the bill had been made in that cause. She denied knowledge or information in respect to the purchase-of land and the subsequent sale to Frisbie, or the receipt by-her husband of $15,000 as the proceeds of that sale, and she left complainant to make proof thereof. She admitted that the mortgage on her lands had been paid off, but denied that it was. paid! by her husband, averring that, being under foreclosure, it was-paid by her son, Edward M. Babcock.

By the answer she further averred that the previous bill of Standisb had charged that her husband had applied part of the-money received by him from the sale to Frisbie to the satisfaction of the mortgage on her lands, and had prayed relief by charging as a lien upon her said lands the amount so paid, and by selling said lands to discharge such lien. She averred that by her answer to that bill an issue was presented upon those-charges which was duly tried, and a decree made thereon that the bill should be dismissed as against her,' with costs. She-thereupon claimed that the matter thus established by that decree was conclusively established as against Standisb, and prayed to have the same benefit of this defence as if she had pleaded the decree in bar.

To this answer was appended an affidavit containing the customary averments of affidavits to answers, and the further averments that the proceedings and decree in the former suit were-correctly set forth in the answer,.and that a copy of the decree-annexed to the answer was true and correct.

There was no affidavit or certificate of counsel such as is-required to be annexed to a plea or demurrer. Rev. p. 109 § 87. But the complainant below filed a general replication and the-cause went to hearing upon those pleadings.

The evident purpose was to interpose'the defence of res adjudieata. If the answer in that respect stood for a plea, the burden of proving its truth devolved upon the party pleading, for if is. plainly an affirmative plea. 1 Dan. Ch. Pr. 718; Swayze v. Swayze, 10 Stew. Eq. 180. If it is to be deemed a defence set up by answer, it must be sustained by proof. For if this answer-was called for and putin under oath, it will not be evidence of new matter set up in defence. In either aspect proof of the former-suit-, including the pleadings, which would show what issues were there tried or triable, and the decree thereon, was necessary to-support the defence. The case before us discloses no proof whatever of this sort. The learned vice-chancellor who tried this-•case indicates by his opinion that he conceived that he had before him the proceedings in the former cause, and that they showed that the dismissal therefrom of Caroline M. Babcock was ordered by the court ex mero motu, and without considering the issue presented by her answer, because she was not a proper party. If the record disclosed such a dismissal it would probably fail to establish the truth of the plea or answer. If the record did not disclose the ground of dismissal, extrinsic evidence could make it clear. Russell v. Place, 94 U. S. 606. But here we •have not the record of the former cause, and in its absence there is nothing to support the defence of res adjudícala.

Although this defence was not made out by proof, it is also true that the proof which appears to have been made in this cause was insufficient to justify a decree in favor of Standish. By his bill, he asserted that, in equity, the lands of Caroline M. Babcock should be recharged with the burden from which they had been gratuitously relieved by her husband’s use of partnership funds for that purpose, and made to satisfy Standish for his share as one of the partners. Under the answer he was required to prove the partnership, the resulting profit, and particularly that the $15,000 received by Frederick A. Babcock were the result of the sale of partnership property. Without such proof, the equity here asserted was not established.

But the case before us is barren of proof upon these points. While the decree in the former cause was not put in evidence, yet, as Caroline M. Babcock had set it out in her answer and appended a copy thereto, Standish had a right to rely upon it-as evidence against her if it possessed evidential force in that regard. But it was not competent proof against her of the facts essential to his case. For although she was originally made party to that suit, she was dismissed therefrom. She was not bound by the •decree, and its adjudications on- the essential facts do not estop her from contesting them and requiring other proof. If she was a proper party in that cause, Standish could have appealed from the order dismissing her therefrom, and by- its reversal would have bound her by the decree. But after dismissal, the decree was as ineffective against her as if she had not been originally a party to the suit.

As the decree is thus unavailable as proof, the case is left without proof on these essential points. Indeed, the only evidence-upon the subject is that of Frederick A. Babcock, who, when called as a witness by Standish, repeatedly declared that the $15,000 which he received from Frisbie were the proceeds of the sale of railroad bonds and stock, and not of the coal lands. While it is true that he is estopped from this defence by the decree in the former cause, yet he is admissible to testify in defenceof his wife, who is not estopped thereby.

The result is that there is no evidence to support the decree-appealed from.

But this result is by no means satisfactory. The learned vice-chancellor who advised the decree evidently deemed that he had before him evidence that raised the legal questions which he-decided. Indeed, his opinion indicates that he believed that he had before him not only the pleadings and decree but also the evidence taken in the former cause, for he states facts that nowhere appear in proof of this cause.

If we assume, as he did, that it appeared that the $15,000 paid by Frisbie to Frederick A. Babcock was the price of lands belonging to the partnership, a question is presented decisive of the case.

Although the charge of the bill was that Frederick A. Babcock had paid off the mortgage on his wife’s lands out of the-$15,000 received by him, the facts proven in this cause do not support this charge. The truth was, that shortly after the receipt of that sum Frederick A. Babcock paid $6,000 of it to his son, Edward B. Babcock, and the latter, almost immediately, applied enough of that sum to discharge the mortgage on his mother’s lands. It is suggested by Standish’s counsel that these-circumstances point to fraud and justify the inference of collusion to invest the discharge of the mortgage with an appearance of filial generosity, while in reality it was a scheme to divert partnership funds to an unlawful purpose. But the vice-chancellor failed to draw any such deduction from any evidence before him, and our review of the evidence before us convinces us that in so doing he was not in error. The evidence that the payment of $6,000 to Edward was a payment upon a just debt honestly due is uncontradicted. The circumstances supposed to be suspicious are explainable by the near relationship of the parties, and will not justify an inference "of fraud. There is ample corroboration of the ability of the son to make the advances to his father out of which arose the indebtedness upon which the $6,000 were paid. It must be considered as established that the payment wras made upon a debt honestly due.

We also think that the evidence before us plainly shows that the son received that payment without any knowledge that the money paid was or was claimed to be partnership funds. Nor is there anything discoverable in the evidence which shows that he was put upon inquiry on that subject. His evidence is uncontradicted that he supposed the money thus paid him was from the proceeds of the sale of some railroad bonds and stock made by his father.

The question, then, is whether Edward B. Babcock can retain money paid to him by his father upon an honest debt, and received by him without knowledge or notice that the money belonged to a partnership of which his father was one.

The solution of this question is not affected by the subsequent application of part of this money by way of a gift to his mother. For if Edward had acquired a right thereto he could dispose of it at his pleasure.

The question was solved by the court below by the application of the well-settled doctrine of the law of partnership that each partner has a lien on partnership property for the payment of partnership debts, and upon the surplus after such payment for his share. 1 Lind. Part. *85®. It was considered that it followed from this doctrine that one partner might follow money belonging to the partnership into the hands of a creditor of an individual partner who had received it in payment of his debt without knowing that it was partnership money, and ‘ might require such creditor to restore the money so received to the partnership, or at least to account for his share thereof. And this decree, if made upon the facts deemed to have been before the vice-chancellor, can only be supported upon that proposition.

There can be no donbt that one partner cannot give away partnership property, or things procured by partnership money, :and that the donee will be deemed to be a trustee for the partnership and required to account for such gifts. Shaler v. Trowbridge, 1 Stew. Eq. 595; Partridge v. Wells, 3 Stew. Eq. 176; S. C., 4 Stew. Eq. 362. Nor can one partner give a partnership obligation in payment of his individual debt without the consent of the other partners, and it has been held in this state that the creditor who thus accepts partnership obligations from one partner has the burden cast on him to prove the consent of the other partners. Mecutchen v. Kennady, 3 Dutch. 230; Dob v. Halsey, 16 Johns. 34. Nor can a partner transfer or create a lien upon partnership property for the payment of his individual debt to a creditor who has knowledge that the property so transferred or pledged is partnership property. Matlack v. James, 2 Peas. 126; Clements v. Jessup, 9 Stew. Eq. 569. And this doctrine will apply to partnership money paid by one partner to his individual creditor if the latter knows that the money belongs to the partnership. Piercy v. Fynney, L. R. 12 Eq. Cas. 69; Kendal v. Wood, L. R. 6 Exch. 243; 17 Am. & Eng. Encycl. L. 1250; Davis v. Smith, 27 Minn. 390; Dob v. Halsey, ubi supra.

In the opinion delivered in the supreme court in Mecutchen v. Kennady, ubi supra, Chief-Justice Green indicated his approval of the doctrine declared by the supreme court of the United States in Rogers v. Batchelor, 12 Pet. 221. That doctrine was that a partner could not apply partnership property to the payment of his individual debt so that the title of the partnership thereto would be divested, even if the individual creditor was ignorant that the property received by him belonged to the partnership. Mr. Justice Story, who delivered the opinion in that •case, put the doctrine upon the ground that the true question -was whether the title to the property had passed from the partnership to the individual creditor. The reasoning is that the implied agency of one partner to dispose of partnership property extends only to its disposition for partnership purposes, and not to its-application to the purposes of one of the partners. An individual creditor receiving property upon his debt may, by inquiry, discover the title of his debtor who thus applies such property, and may in this mode be chargeable with the knowledge which would be acquired upon such inquiry.

But if this doctrine, supported by such authority, be admitted to be correct (as to which no opinion need be expressed), the-question remains whether it applies when a partner uses, not property, but money, of the partnership in the discharge of his individual debt.

In my judgment there is a marked distinction between the two cases. This results, not from the. old notion that money has no “ear-mark,” but because money has the quality of currency, passing from hand to hand in all bona fide transactions without the necessity of inquiry on the part of him who receives it as to the title of the party who pays it. When property thus passes-the recipient may be put upon inquiry as to its title; when money thus passes no inquiry is required. In the former case the knowledge which inquiry would produce would charge the recipient; in the latter case nothing but actual knowledge will charge him. It was forcibly said by Lord-Justice Fry, in Northern Counties &c. v. Whipp, L. R. 26 Ch. Div. 482, that “ the proposition that money obtained by fraud can be followed into the hands of persons who take it in satisfaction of a bonafide debt without notice is, in our judgment, devoid of support-from principle or authority.” Perry Trusts § 837 ; Lew. Trusts *892.

The result is that if this case appeared before us as it seems to have appeared to the vice-chancellor, in my judgment his conclusion was erroneous and the decree made thereon cannot be-supported.

It has been deemed best to state this conclusion, as the contrary view expressed in the court below will tend- to greatly limit dealings with persons who are copartners. If a creditor - of any individual partner cannot retain money paid upon his-debt, if the money so paid was in fact partnership money,. although not known to be so by the creditor receiving it, dealings with individual partners will be seriously affected.

For the reasons above set forth, the decree must be reversed, with costs.

For reversal — Garrison, Gummere, Lippincott, Ludlow, Magie, Van Syckel, Bogert, Brown, Krueger, Sims, Smith, Talman — 12.

For affirmance — None.


author: Garrison, J.

text:
    Margaret H. Rowan v. Minerva Congdon.
    1. Gross inadequacy of price, coupled with proof that owing to a misapprehension as to the time of sale a purchaser who was willing to give a greatly enhanced price for the property could have been had, are sufficient reasons for ordering a resale of mortgaged premises which had been bought in by the mortgagee.
    2. In this case, the court directed that the order of the chancellor confirming the sale be affirmed unless a prospective purchaser should enter into bond to bid the enhanced price in the event of a resale.
    On appeal from an order of the chancellor confirming a sale of mortgaged premises.

      Messrs. Collins & Corbin, for the appellant.

      Mr. William I. Lewis, for the respondent.
   The opinion of the court was delivered by

Garrison, J.

This appeal is from the decree of the chancellor confirming a sale under proceedings to foreclose a mortgage. The mortgaged premises were bought iu by the mortgagee for the sum of $10,041.06, the balance due on her decree. The attention of this court is arrested by two circumstances — -first, that the mortgagor actually paid in cash the sum of $4,698 in fruitless endeavors to save her property; and second, that some proof is offered that but for a misapprehension as to the time of sale a purchaser who was willing to give $25,000 for the property could have been had. In view of these circumstances, our order is that the decree of the chancellor be' affirmed, unless within thirty days after the remission of this record to the court of chancery a prospective purchaser enter into bond with security satisfactory to the chancellor that in the event of a resale the sum of $25,000 will be bid for the mortgaged premises, in which case a resale of the premises shall be directed by the chancellor.

This order is made without costs.

For affirmance — The Chief-Justice, Garrison, Gummere, Ludlow, Mague, Van Syokel, Bogert, Brown — 8.

For reversed — -Lippincott, Sims, Talman — 3.


author: The Chancellor.

text:
    J. Pierson Vreeland v. J. Beach Vreeland, Elizabeth V. D. Gould, Adelia Vreeland et al.
    1. Where a farmer, seventy years of age, residing on a farm about five miles from the city of Paterson, with an invalid wife and daughter, and another daughter who was about to marry and leave home, proposed to his eldest son, who was engaged in business in Paterson, that if that son and his wife would take up their residence at the farm and there make a home for the parents for the parents’ lives, that he would give the son the farm under specified limitations, and the son accepted the proposition, and thereafter, with his wife, moved to the farm, and, to the detriment of his business and by the labor of his wife and himself, fully,, performed upon his part the agreement made by the proposition and its acceptance — Held, that at the instance of the son, equity will compel the performance of the agreement upon the part .of the father.
    2. It is essential to the validity of such an agreement that it shall be mutual and, as well, definite and certain both as to its terms and subject-matter.
    3. Such an agreement must be clearly proved and it must also be plainly established that the performance relied upon was referable to and consequent upon the agreement, for the purpose of carrying it into effect.
    On bill for specific performance, answer, replication and proofs.

      Mr. John W. Griggs, for the complainant.

      Mv. John 8. Barhalow, for the answering defendants.
   The Chancellor.

The complainant alleges that, in the month of- April, 1883, his father, Cornelius D. Vreeland, was seized of a farm in the county of Passaic upon which he then resided with his wife, Rachel, and his two daughters, Elizabeth and Adelia; that his parents were advanced in age, the father being over seventy and his mother sixty-five years old; that the mother was feeble and nearly blind, because of cataracts in her eyes; that his sister Adelia was subject to epileptic fits and fainting spells which affected her mind and incapacitated her for domestic responsibility, and his sister Elizabeth had married Joseph P. Gould and had determined to leave her parents and establish a new home with her husband; that the complainant then resided in the city of Paterson, some five miles from his father’s farm, with his wife and only child, Cornelius D. Vreeland, named after the grandfather, where he conducted a horse feed business; that the father besought him to move to the farm with his wife and child so that his wife might superintend the household and he might advise and assist the father, as the father grew older, in the management of the farm ; that it was verbally agreed, between him and his father, that he should move to the farm and help in its care, and make a home for his father and mother as long as they might desire to live there, and that in consideration of his doing so his father would give him a deed of the farm which should convey to him an estate for life with the remainder in fee to his son in case his son should survive him, and a fee to him at the death of the son if he should survive the son, and should clothe him with power to sell the farm after the death of the father and mother, the proceeds of such a sale to be so invested that the income would go to him during his life, and the principal to his son after his death if the son should survive him; that in pursuance of the agreement, at personal inconvenience to himself and his wife, and in detriment to his business, on the 18th of May, 1883, after Mrs. Gould had left her parents, with his wife and son he moved to the farm and there fully performed the agreement upon his part until the death of his mother in March, 1887, and the death of his father on the 6th of July, 1890; and that the father died intestate, leaving him surviving, as his heirs-at-law, the complainant, a son named J. Beach Vreeland and the daughters before mentioned, having first prepared and executed a deed to carry out the agreement alleged, but having failed to legally effectuate its delivery to the complainant.

Upon the case thus stated he seeks a decree which will secure the specific performance of the agreement referred to¡

That equity will specifically enforce such a parol agreement, . at the instance of a complainant who shall have completely performed it upon his part, is now established, in this state, beyond controversy. The remedy is afforded upon the ground that it will work a fraud upon him who, induced by the agreement, has in good faith so performed it as to irretrievably change the situation of the parties to his disadvantage, to permit the other party to refuse fulfillment upon his part. It has had frequent recognition and application, in adjudged cases in our courts. Casler v. Thompson, 3 Gr. Ch. 59; France v. France, 4 Halst. Ch. 650; Johnson v. Hubbel, 2 Stock. 332; Van Dyne v. Vreeland, 3 Stock. 370; S. C., 1 Beas. 142; Davison v. Davison, 3 Beas. 246; Cooper v. Carlisle, 2 C. E. Gr. 529; Brewer v. Wilson, 2 C. E. Gr. 180; Eyre v. Eyre, 4 C. E. Gr. 102; Brown v. Brown, 6 Stew. Eq. 657; Larison v. Polhemus,9 Stew. Eq. 506; Schutt v. Missionary Society &c., 14 Stew. Eq. 115; Pflugar v. Pultz, 16 Stew. Eq. 440; Young v. Young, 18 Stew. Eq. 27; S. C., 6 Pick. Ch. Rep. 491; Nibert v. Baghurst, 2 Dick. Ch. Rep. 207; Drake v. Banning, 4 Dick. Ch. Rep. 452.

But a parol agreement of this character, because of the situation and relations of the parties to it and the consequent opportunity for the perpetration of fraud, is regarded with suspicion, and, when its enforcement is sought, is subjected to close scrutiny. It must not only be mutual, but also definite and certain, both in its terms and as to its subject-matter, and it must be clearly proved. Cooper v. Carlisle and Brown v. Brown, supra. So, also, it must plainly appear that that which is alleged as part performance is referable to and was consequent upon the contracts alone, for the purpose of carrying it into effect. Eyre v. Eyre, supra; Pom. Spec. Perf. §§ 108, 109.

The proofs establish that the complainant broke up his home in Paterson on the 18th day of May, 1883, and went with his wife and son to live with his father, and that the wife undertook the supervision and control of the father’s household and the complainant from time to time assisted in the care and management of the farm, and that they lived together in this way until both the father.and mother died. During the same time the complainant continued his business in Paterson, but at such disadvantage, because of his inability to give it his undivided attention, that it gradually lost its value.

The complainant testified that he gave up his home in Paterson, went upon the farm to live and sacrificed his business, in the execution of an agreement between him and his father, and also to the terms of that agreement.

That he was a competent witness touching those matters, in this suit, where the defendants are not sued in a representative capacity but for property to which they hold title descended to them from their father, is settled. Hodge v. Coriell, 15 Vr. 456; Palmateer v. Tilton, 13 Stew. Eq. 555; Crimmins v. Crimmins, 16 Stew. Eq. 86; Smith v. Smith, 23 Vr. 210.

His testimony is that his father came to him in Paterson in Eebruary, 1883, and told him that Mrs. Gould was about to marry, when she would go away with her husband, and then there would be no one to take care of the house, and proposed that the complainant should go to the farm and make his home there, and promised that if he would do so he would give him a deed for the farm as soon as he could have it prepared, and also would give him the stock and utensils that were upon the farm. The complainant did not reply to the proposition until May, when he said to his father:

“Well, I Lave talked it over with my family, and if you will give me all the farm and a deed for it, and the utensils and stock, I will go up there and make a home for you and do the best I can.”

He further says:

“It was agreed between he and I that the deed — or he asked me if I had any objections — entail to myself, and I said no, for I did not expect to sell it. He said, ‘ Well, I would like to have Corny to have it after you are through, and if you don’t mind I’ll give it to him after you’re through with it; I will make a provision so that if anything should occur and you wish to sell, you would have the right to sell it; but the principal of the money that you receive for it I want to go to your son.’ ”

He further testified that it was agreed that the father was to pay all expenses at the farm both in its maintenance and in support of the family there.

After he went upon the farm, he says that the deed was not forthcoming as he expected, and he demanded it from his father .and threatened to return to Paterson if he did not get it. Matters continued in this attitude until the fall of 1884, when, he says, his father brought a deed to his store in Paterson and exhibited it to him, saying, “Here is the deed of the farm which I promised you. It is all right. You can now go on and do as you like. It is yours.” And then he examined the deed and handing it back to his father told him to take it home and put it away with the father’s papers.

That deed has been offered in evidence. It is a quit-claim ■deed from the father to him, dated on the 14th day of June, 1884, purporting, in consideration of $1 and the natural love and affection which the father bore to him, to remise, release and forever quit-claim to him the lands described in the bill, with a habendum, to him and his heirs and assigns forever. After the description of the property in. the deed, and immediately preceding the habendum, is this clause:

“ It is distinctly understood and agreed, by and between the parties hereto, that the lands above described are conveyed to the said Josiah P. Vreeland, as follows, to wit: The said Cornelius D. Vreeland and Bachel, his wife, reserve the right to remain upon said farm and make the same their home as long as they or either of them shall live, if they should so desire; and, further, that the said Josiah P. Vreeland is not to sell or dispose of said premises before the death of both said Cornelius I). Vreeland and Bachel Vreeland, his wife, without the consent of each of them or the survivor of them in writing first had and obtained; and that said lands and premises are conveyed to the said Josiah P. Vreeland, to be used and enjoyed by him for and during his natural life, and at his death the same shall vest in and go in fee-simple to Cornelius D. Vreeland, the son of said Josiah P. Vreeland, but in case the said Cornelius D. Vreeland, his son, shall die before the said Josiah P. Vreeland, then the lands above described shall vest in fee-simple to the said Josiah P. Vreeland forever, and the said Josiah P. Vreeland is to have the right to sell and dispose of said lands and premises, or any part thereof, at any time he may see fit, and the proceeds derived therefrom is to be invested in some safe and good securities which shall be for the benefit of the said Cornelius D. Vreeland, Jr., provided he shall survive the said Josiah P. Vreeland. Said lands and premises not to be sold, however, until after the decease of both the said Cornelius D. Vreeland and his wife, Bachel Vreeland, and in case of sale after their death the said Josiah P. Vreeland is to make and execute a good and sufficient deed or deeds to the purchaser or purchasers thereof.”

The witness further states that, in January, 1888, his father made a more formal delivery of the deed, together with other papers, to him, and he then put all the papers back in a box in which his father kept his valuable papers, and, putting the box in the father’s trunk, locked it in his father’s closet, saying that it would be as safe there as anywhere.

It appears that the papers thus claimed to have been delivered to him consisted of fifteen deeds, seven of which were in his favor, the one now in question being dated as stated, in June, 1884, and the other six, together with the remaining eight deeds, bearing date in 1887.

Unfortunately for the complainant’s credit in this suit, his contention that this deed was delivered to him with' the other papers mentioned, has been the subject of litigation between the parties here concerned in another cause in this court, which was decided against the complainant in 1891 (Vreeland v. Vreeland, 3 Dich. Ch. Rep. 56), and in the court of errors and appeals, in 1892 (4 Dick. Ch. Rep. 322), by deliverances which throw serious doubt upon his veracity and stigmatize his attitude towards his brother and sisters, in the matter of his father’s estate, as rapacious and unjust. Viewing his testimony in the light of that adjudication, and as well in the light of the influence of his interest in the event of this suit, the necessity for strong corroborative proof of his assertions to justify the decree sought, is apparent. And, in addition to this, the terms of the agreement charging the father, as they do, with all expenditures in the maintenance of the farm and household for the remainder of his life, and the transfer of the farm, together with its implements and stock, import a hard bargain and an improbable one, which should have credence in nothing less .than the most convincing proofs. "We naturally, then, depend upon the evidence which has been offered in corroboration of the complainant’s statements.

Nine witnesses have been produced and have testified to statements by the father. The first is John O. Cruikshank, who is a clergyman, eighty-two years old, and the father of the complainant’s wife. He knew the senior Vreeland for nearly forty years prior to his death and at one time was his pastor. For a quarter of a century he was the superintendent of the public schools in Passaic county. He gives evidence which, save for his relationship to the complainant, appears to be beyond criticism. It is that, in March, 1883, Mr. Vreeland expressed a desire to him that he would encourage the complainant’s wife to move to the farm and undertake the care of the household there; that he objected that such a course would increase the complainant’s expenses of living, and thereupon Mr. Vreeland declared that he, Vreeland, would bear all the expenses, and added:

Now, understand, I propose to give him the farm at Summer Hill, with its stock and farming utensils, independent of any other property which he may inherit from my estate. I give him a deed of the Summer Hill farm, that it may pass through him as a legacy to my grandson, O. D. Vreeland. Should circumstances occur that Pierson might think it advantageous to sell, I wish that the amount that the farm may bring be held in trust for my grandson as a legacy.”

The witness further says that he communicated this proposition to his daughter, and that in the month of June in the same year, at the farm, Mr. Vreeland told him that the proposition had been accepted, and that the complainant and his wife were there.

Still further he testifies that in June, 1890, the month before Mr. Vreeland died, at the farm, Mr. Vreeland spoke of the time when his grandson Cornelius would be in possession of 'the farm and,among other things said:

“ It is my pride, my pleasure, that the name of O. D. Vreeland, after I am gone and Pierson has gone, will be owner and possessor of the Summer Hill farm. I want that name kept over the farm. He is my grandson, born in this house, and, Dominie, I am"proud of him.”

■ Another witness is Ellen Vreeland, the widow of a cousin of Cornelius Vreeland. She testifies that in the fall of 1884, as she was driving to Caldwell with Mr. Vreeland, he told her how h'e wanted the complainant to make his home on the farm after Mrs. Gould married, and that he had made an agreement with the complainant that if he would come and take charge of the place and make a home for him, Vreeland, and his wife, he would give him the farm and make him a deed for it; that it would be his then to deal with as he pleased. He said that he had not yet given the deed; that the complainant wanted it, but had his word, and he would do what he promised, and the complainant should have the deed when he got ready to give it.

Another witness was Garret V. Snyder, a cousin of Cornelius D. Vreeland, some forty years his junior in age, employed in a grocery store in Paterson. This witness states that in April, 1883, Mr. Vreeland came to the store in which he was engaged to make some purchases, and in course of conversation was asked by him if the complainant was going to move into the country, and replied in the affirmative, adding:

“I,have always promised him the place and I have told him if he would move hack up there and take care of me and the old lady I will give him a deed for the property.”

Isaac H. Voorhees, of Paterson, who knew Mr. Vreeland intimately for some eighteen years, testifies that before the complainant went to live upon the farm, Mr. Vreeland said that he had offered to give him the farm and everything that was on it if he would come to it, and later, that Mr. Vreeland told him that the complainant was coming to the farm to live, and that he, Vreeland, had agreed to give him the farm just as it was.

George W. Colfax says that he was tax collector of the township in which the farm was located and that Mr. Vreeland told him once that he had made an arrangement with the complainant to come home and had given him the farm, but that he, Vreeland, was to pay the taxes upon it as long as he lived.

William H. Van Houten and his brother Henry, who were neighbors of Mr. Vreeland, speak of an occasion in the spring of 1883, when they went to Mr. Vreeland’s farm to purchase a cow, and he told them that he had made a proposition to the complainant that if he would move to the farm and there take care of him and his wife the place should be the complainant’s, but the complainant had not yet made a decided answer to his offer.

Grandine V. Zeliff, a neighboring farmer, testifies that, in 1889, Mr. Vreeland told him that he had given the farm to the complainant for making a home there for Vreeland and his wife.

William H. Gray, formerly a hired man of the complainant, testifies that in the spring of 1883, some four or six weeks, he thinks, before the complainant moved to the farm, at the complainant’s store in Paterson, he was hitching up Mr. Vreeland’s horse, when Mr. Vreeland asked him whether the complainant had said anything to him about the complainant’s going back to the farm, and, upon the witness replying in the negative and inquiring why the question was asked, answered:

“Because I have promised t& give him a deed if he comes back on the farm to make a home for me and my wife, and he is a little bit dilatory about coming back, and I thought I would ask you if he had said anything about it.”

In addition to this testimony is the deed referred to, which, though not delivered, was unquestionably signed and acknowledged by Mr. Vreeland and, according to the complainant, was prepared entirely under his direction, and after its preparation was exhibited to and acquiesced in by the complainant.

I think that this testimony and the deed sufficiently corroborate the complainant to entitle him to the relief he seeks. I am satisfied that Cornelius Vreeland, impressed with the helplessness of his household, after the marriage of Mrs. Gould, because of the advancing age of his wife and himself and the afflictions of his wife and unmarried daughter, deemed it best to secure the watchful care of his son and daughter-in-law for the price suggested in the agreement. Besides this, the agreement enabled him to gratify his pride in his name by limiting the principal part of the consideration he was to give to the grandson who bore that name. The price he paid appears to have been a large one, but it is impossible to say that it was in any respect unconscionable. It may be that as remuneration for the depreciation in the value of the complainant’s business, the complainant’s attention to his father’s affairs and his wife’s unremitting care of the household matters, it did not exceed that which was just. It is difficult to precisely fix the value of such services.

It has been suggested that the promise of the farm may have been intended by way of advancement, but I think that suggestion is answered by the testimony of Mr. Cruikshank to the effect that the conveyance of the farm was to be independent of the complainant’s inheritance from his father.

I think, also, that all doubt as to what.was intended to be included within- the term Summer Hill Farm ” is settled by the description contained in the deed.

I will decree that the agreement shall be specifically performed.