author: Backes, Vice-Ordinary.

text:
    In the matter of the probate of the last will and testament of Catherine Morrisey, deceased.
    [Submitted February 17th, 1920.
    Decided June 8th, 1920.]
    1. Incompetence. Evidence held not to establish incompetence, although testatrix was aged and feeble and had at times been non compos mentis.

    2. Presumption of undue influence. An old lady of eighty, feeble in mind and body, made her will in favor of one in confidential and dominant relations, who had opportunities to exercise undue influence in its procurement — Held, “with other slight circumstances,” to raise a presumption of undue influence.
    3. Overcoming presumption. The presumption may be overcome by the denial of those implicated, but to have that weight the testimony must be impeccable and convincing.
    4. Credibility of denial. The denial of the beneficiary is insufficient to overcome the presumption where it appears to be untrustworthy and undependable from other testimony by the beneficiary which is improbable and incredible.
    On appeal from the Union county orphans court.

      Mr. William 8. WolfsKeil and Mr. Edward Maxson, for the proponents.

      Mr. Herbert Olarh Gilson and Mr. William G. Geblm’dt, for the caveators.
   Backes, Vice-Ordinary.

This is a will contest. Catherine Morrisey executed her last will and testament in due statutory form February 9th, 1916. She was a widow and childless. Her next of kin were nephews and nieces. She gave her estate to. the children of a deceased nephew, Frank and Leonard O’Brien and Anna O’Brien Flemming. The nephews and nieces oppose probate on the ground of incompetence, undue influence and conspiracy.

Mrs. Morrisey was eighty and more when sire died in March, 1919. She was of sturdy Irish stock, and in her time was rugged of body and strong of mind, illiterate, but keenly intelligent. Mrs. Morrisey and her husband came to Summit some fifty years ago. He kept a hotel, and shei helped, and they accumulated considerable property. He died in the early nineties, and she continued the hotel business, and added to her possessions, leaving an estate valued at $40,000. After his death, the father of the beneficiaries was employed in. the management of the hotel, and lie and his family made their home with the widow until 1905, when another nephew and his family took their place. This nephew died three years later, and the hotel was given up. His famity, known in this litigation as the “Grace Kellej^s,” stayed on and kept house for Mrs. Morrisey until December, 1915, when they were dispossessed, and Anna O’Brien Flemming, one of the beneficiaries, was installed, with her family. Two months later the will was executed in her and her brothers’ favor. Mrs. Morrisey continued with the Flemmings until her death. The change from the Kelleys to the Flemmings came about in this manner: Mrs. Morrisey conceived, and not without cause, that her home had become the rendezvous of undesirables — low and dissolute Polacks, Italians and negroes — that drink was the order of the day, and that she had^een robbed; that her home had been debauched and that the surroundings had become repulsive, and that she had, in fact, been, robbed of $120 by one of the Kelley boys is believable from Grace Kellej^’s testimony, and from what she told others. On the witness-stand Grace blasély testified that the whiskey bottle was ever-present and that they all drank freely, including Mrs. Morrisey. In her dilemma Mrs. Morrisey appealed to a Miss Rooney — whose home and mother she had visited daily for years — to get Frank O’Brien to rid her of the Kelleys, and on an afternoon in November, 1915, Frank and Mrs. Flemming spirited the old lady from the Rooney house to tire home of their mother. Tt -took a fortnight to eject the Kelleys, and when this was accomplished, Mrs. Morrisey returned to- her home in the care of the Flemmings-. Mrs. Morrisey had not been apprised of the plan for getting rid of the Kelleys, and was undoubtedly taken by surprise when suddenly removed from the Rooney home; indeed, it is questionable whether, in her precarious condition, she comprehended at all the things that were being done, for it appears that then, and for some time afterwards, her mental faculties were seriously impaired.

1. Counsel characterized the incident of Mrs. Morrisey’s removal to the O’Brien home as kidnapping, and as the initial step in a conspiracy to reach the old lady’s fortune. The charge of ulterior motive and evil design upon her estate is completely refuted by this single outstanding fact: When Mrs. Morrisey -was taken to- the O’Brien home, Mary Ann Kelley, of Carbondale, Pennsylvania, the leading spirit of the contestants, and who claims to have been- her aunt’s favorite niece, was sent for by the O’Briens, and she and her brother responded with their mourning trappings, expecting to attend their aunt’s funeral. Mary Ann, being apprised of her aunt’s predicament, was asked by the O’Briens to make her home with Mrs. Morrisey and care for her. This she flatly refused to- do, saying she cared more “for a little corner in Carbondale than the whole of Summit.” Surely, if the O’Briens -had schemed to possess themselves of Mrs. Morrisey’s property, by gift or will, they would not have put Mary Ann in position to spoil the opportunity at the very inception.

2. In July, 1917, a commission de lunático inquirendo issued out of the court of chancery on the motion of the present contestants, or some of them, and Mrs. Morrisey was found to be of unsound mind as of July 3d, 1916, approximately five months after she had made her will. The issue of insanity was bitterly contested, and counsel agreed to use at this hearing the testimony there taken.

Mrs. Morrisey was a senile dement at the 'time of her death; she died of pneumonia. She had been a victim of this disease— mental degeneracy due to old age — for at least ten years.' Three months before the will was executed, and shortly after she had been taken to the O’Brien home, Dr. Thomas P. Prout, a specialist in mental diseases, examined her to determine whether she had testamentary capacity, and found her hopelessly incompetent. Later, Mr. McAdams, her attorney, who had meanwhile been pressed by Mm Morrisey to draw her will, observed improvement in her condition and asked Dr. Prout to again examine her. The doctor was skeptical, but, demurringly consented, and was amazed at the change. Two or three more visits, and careful tests at each, convinced him that Mrs. Morrisey had revived sufficiently to dispose of her property by will, and so informed Mr. McAdams. On the witness-stand he expressed confidence in his judgments and reiterated his unqualified opinion of Mrs. Morrisey’s fitness. On the other hand, the late Dr. Brit-ton D. Evans, of Morris Plains Asylum, who examined Mrs. Morrisey in August, 1917, with a view to testifying in the lunacy proceedings, and found her bereft, there and here stated that she was incompetent when she made her will. Drs. William J. Arlitz and George W. King, gentlemen distinguished in the treatment of mental disorders, basing their opinion upon the facts related by Dr. Evans of his examination, also gave as their judgment that the testatrix lacked testamentary capacity in February, 1916.

The four physicians were of one mind — that the disease had its incipieney at least ten years before the will was made, and that at the time of the lunacy proceedings, in the latter part of 1917, it was terminal in type. And upon this diagnosis Drs. Evans, Arlitz and King expressed the conviction that in view of the inexorable ravages of the disease the restoration of Mrs. Morrisey’s faculties, as described by Dr. Prout, was impossible. Dr. Evans went so far as to say that if it occurred it was a miracle. The truth, however, is that there was a recovery, abundantly sustained by the proofs, and the reason for it, in my opinion, is to be found in things mundane and not in the mysteries of the supernatural.

Up until the day that Mrs. Morrisey was -taken from the Rooney home she managed her own affairs, collected her rents and interest on- her mortgages, and knew when they were due and from whom; she paid her bills and knew the amounts and to whom due, and was exact in handling monejc She was able to attend to her personal wants, at the table, in her toilet, and in the bed chamber. She was religious, said her beads daity, was attended monthly by her father confessor, and received Holy Communion. She knew her friends and enjoyed their society. She was amiable and gracious, and altogether a charming old Irish lady. These traits of character, religious practices and power of .self-attention, survived the acute brain-cloud of 1915-1916, and continued until the early summer of 1917, when she began to decline, rapidly at first, then gradually to the end. The witnesses to the execution of the will, Dr. Prout, of whom I have already spoken, and Mr. Corb3r, a. neighbor, who was called in for the purpose, gave satisfying testimony that Mrs. Morrisey understood the nature of the document and its purpose and effect. Dr. Prout at the time made a final test to reassure himself and Mr. McAdams that she was qualified. Mr. McAdams, a reputable member of the bar, who drew the will and supervised the legal formalties of its execution, although satisfied from his own observation and intercourse with Mrs. Morrisey that -she was not lacking in testamentary capacity, resisted her importunities to draw the will until fortified by the scientific determination of Dr. Prout that she was fit. His circumspection and precaution were not born of doubt, as insinuated, but were the promptings of a careful lawyer conscientiously serving his client, in whom and in whose estate he had no interest other than as counsel. Such safeguarding inspires confidence, not distrust, in the integrity of wills. ' Dr. Prout’s interest in the case was strictly professional, and it impressed me as profoundly as it did counsel.

On the day of the execution of the will, Mr. Hicks, a notary public, who- had a personal acquaintance of many years’ standing with Mrs. Morrisey, called to- have her verify her signature to a power of attorney she had executed to Frank O’Brien December 16th, 1915. He found her lucid, entertaining and unchanged.

Dr. Feeder, her family physician, attended her from May, 1916, for two years without perceiving any mental delinquency, unnatural to one of her advanced jmrs, until the beginning of the final collapse in the late spring of 1917. To him she always gave a good account of her ailments, personally paid him for his services, and generally conducted herself becoming one of her great age.

On July 3d, 1916, Mrs. Morrisey drew from the First National Bank of Morristown over $2,000, and Mr. Abell, the assistant cashier, paid over the money unquestioningly, after an intelligent conversation with her in which she gave a reason for the withdrawal. He had no doubt of her lucidity.

Others, whose testimony will not be specially adverted to, bear witness to her recovery.

How, it seems to me, we find the solution of the phenomenon in this: Mrs. Morrisey had been living in squalid and sordid surroundings, ill-kept, undernourished and over-stimulated. Wholesome quarters, proper care and nourishing food, and liquor eliminated, worked the resuscitation. The three doubting physicians rejected the theory of cause and effect, asserting that the alcoholic taint was negative, or, if of any effect, beneficial to a subject of senility. If they mean that complications, such as alcoholism or devastating fevers, or the like, neither retard nor accelerate the progress of the disease, I can readily subscribe to their views,' but if their doctrine is that physical impoverishment and protracted alcoholism, plus tire disease, will not hasten the dethronement of reason, I must dissent, as being contrary to common experience. It is axiomatic that excessive use of alcohol perverts and deranges the mind, produces stupor and delirium, and that a comparative prenormal state usually follows a period of abstention. Obviously, the effect upon the physically and mentally weak is more precipitate than on the healthy and strong. We have such developments in the present ease. I am satisfied that Mrs. Morrisey had sufficient testamentary eapacit}-, and, consequently, the charge of incompetence is not sustained.

3. There is no direct evidence of undue influence. Alter the Flemmings were installed they took complete charge of Mrs. Morrisey’s household, her person, and her property. Blind in one eye and nearly sightless in the other, hard of hearing, and enfeebled by age and sickness, she was unable to- give her estate the attention it required, and they managed it for.her; and so with the household. Personally, Mrs. Morrisey was ever under the watchful eye and constant supervision of Mrs. Flemming. Comprehensively speaking, the Flemmings were in control; not of their own- choosing, perhaps, but because of the exigency; and agreeably so to Mrs. Morrisey, who- was happy and contented and appreciative. When the break with the “Grace Kelleys” came, Frank O’Brien took Mrs. Morrisey’s securities to his mother’s home, and for awhile collected her rents and interest, acting under a power of attorney drawn by Mr. -McAdams, whom he had in the meantime retained to advise in the trouble with the Kelleys. Mr. McAdams had been Mrs. Morrisey’s counsel in previous years, and it was during his then recent visits to the O’Brien house that she repeatedly asked him to draw her will. It was Mr. Flemming who called in Dr. Pro-ut to- make the first examination of Mrs. Morrisey; but whether he did so of his own initiative or at the direction of Mr. McAdams is not clear. Mr. Flemming also selected Mr. Corby as one of the witnesses to the will. Whether the requests of Mrs. Morrisey to Mr. McAdams for a will in favor of the O’Briens were spontaneous or unlawfully procured is conjectural. There was abundance of'opportunity and a susceptible and pliant and fruitful subject for exploitation, but that advantage was taken rests in surmise.

Mrs. Morrisey had- not been on friendly terms with Mrs. Flemming. and her mother for many years — not since the separation in 1915. Leonard and Frank O’Brien visited their grandaunt occasionally, about once a year, and for them she had little concern, it is said. Why this abrupt face-about in sentiment, and the selection of her custodians as the objects of her bounty, to toe exclusion of those nearer in kinship, and for whom she had affection? It may have been that toe reunion awakened a slumbering love she once bore the O’Brien children when they were members of her household, but this is mere- speculation.

Then, again, the nephews and nieces — the contestants — always had had free access to their aunt, and they were welcome. After the Flemmings became interested, though they were not exactly excluded from intercourse, private interview was not permitted, and, it would appear, Mrs. Flemming was at pains to make their visits uncomfortable and their return unlikely. She 'also failed to notify them of Mrs. Morrisey’s death and burial.

While the history of the case does not warrant a finding of actual imposition, the confidential relation of Mrs. Flemming to the testatrix, and the circumstances that have been related and the culpable incident to be adverted to presently, raise the presumption that undue influence had been exerted by her, which, unless countervailed by satisfactory evidence, controls as a conclusion of fact. Sparks' Case, 63 N. J. Eq. 242; Cooper’s Will, 75 N . J. Eq. 177; affirmed, 76 N. J. Eq. 614. The presumption may be overcome by the denial of those implicated (Sparks’ Case, supra; In re Anastasia Davis, 73 N. J. Eq. 617; Craft’s Estate, 85 N. J. Eq. 125), but to have that weight the testimony must be impeccable and convincing.

Mrs. Flemming denied the legal imputation, but her testimony does not measure up to the required standard, and for this reason: On February 2d, 1917, Mrs. Morrisey received $2,000 in cash, in payment of a mortgage, and on July 24th, 1917, after the lunacy proceedings were begun, she withdrew $3,000 from a bank. These iarge sums vanished before the guardian in’ the proceedings was appointed, November 9th, 1917. Mrs. Flemming professed to be ignorant of what became of the money. She was the old lady’s caretaker and knew her every move. Her story that Mrs. Mtarrisey carried these bundles of bills on her person — the $3,000 when she was admittedly non compos — and her intimations that she frittered them away, are improbable and incredible. I believe she knew more than she was willing to tell on the witness-stand, and that she either had the money or knew-what became of it. Her disingenuous disavowal of knowledge', concerning its disappearance impeached her testimony as a whole and renders her denial of unlawful complicity in the making of the will untrustworthy and undependable. The burden cast upon the proponents of neutralizing the presumption of undue influence by believable evidence has not been met, and probate must therefore be denied.


source: Caselaw Access Project

author: Foster, Vice-Ordinary.

license: Public Domain

text:
    In the matter of the guardianship of Albert E. Jennings et al.
    [Submitted March. 2d, 1920.
    Decided March 29th , 1920.]
    Where a fund was left by Will tire income therefrom1 to be .p-aiid to each of testator’s three 'dMlclren, until ¡each lof isaid children stall reiach the age of itwemtyoue, respectively, thie said money® to be paid, nevertheless, not to ithe said .children tout to1 itlhie widow 'of A, or such other legal guardian as -they may have for .their benefit — Held, that 'the direction of payment to 'the widow of A is not indicative of the capacity in which she was to receive tibie -inaoime, hut 6s merely descriptive iof one of the persons to whom the income was to -be paid, as guardian of the children, the bequest being -to the children.
    On appeal from the orphans court of Essex county.

      Mr. William 1j. Bmnyale, for the appellant-guardian.

      Mr. Jeremiah Hoover, for the respondent-petitioner.
   Foster, Vice-Ordinary.

This appeal brings up for review an order of Judge Stickel requiring the appellant as- guardian of her son Albert E. JenT nings and her two other children, to account for the income received by her from the Fidelity Trust Company as trustee under the will of Marion A. Jennings, deceased.

Marion A. Jennings was tire mother of William II. Jennings, who enjoyed the income of a trust fund created by her will, until his death in 19If. The appellant, Ellen A. Jennings, is the widow'of William II. Jennings and the mother of the three minor children,

Clause 12 (/.) of the will of Marion A. Jennings reads as follows:

“(f.) At the cleait-b of my said son William H. Jennings to' pay all the rest a-nd remainder of the Income from the .tenth clause 'of this my wfffi, in equal shares to each of the three children of my said son William H. Jennings, to wi't, Albert E. Jennings1, William. H. Jennings third and Marion A. Jennings, ran,til eacBx of tibe said oJidldren. sbaül iieacib tibe age of twemltyone (21) years respectively, tibe said moneys to be ¡paid1, orev'ertbeiess, noit to tibe «Said dhdldren font to, tibe widow of tibe said WSMaim H. J enndngs, or sucib oitiber legal guiardiian, as tihey may 'have, for ttibeir benefit.”

On the death of William H. Jennings his widow applied to the trustee for the payment of the income directly to her as his widow, hnt the trustee, because of the words “other legal guardian” in the clause quoted, considered it advisable for the widow to be appointed guardian of the children, and this was done, and petitioner, a surety company, became the surety on her bond and began these proceedings as such surety to compel her to account for the annual income, amounting to- between $3,000 and $4,000, which she has received since her appointment.

Appellant insists she is not obliged to account, as she claims under this clause of the will to be entitled to the income as widow and not as guardian, and she further claims that although the income was paid to her as guardian a receipt therefor from herself as widow to herself as guardian is all the accounting she is obliged to malee.

Appellant contends her position is supported by the case of Macknet v. Macknet, 27 N. J. Eq. 594, and later cases in which that case has been followed. In the Macknet Case there was, as Mr. Justice Reed, in delivering the opinion of the court of errors and appeals, stated, a direct gift of the income to the mother for the support, maintenance and education of her child, and, after a review of the cases, he stated that the facts of that case were within a line of eases which establish the doctrine that where property is given to a parent, or one standing in laca parentis, with direction, to educate or maintain their children upon the fulfillment of toe trust, no account can he demanded, and he added that whatever the origin of the doctrine;, it has resulted' in placing such dispositions of property among a class of bequests which are considered as gifts to the first taker, coupled with a duty.

The facts in the present case differ from the facts in all the cases cited on behalf of the appellant in several important particulars, notably, that the bequest is made to the children and that there is not a direct gift of toe income to appellant either personally or as the widow of William IT. Jennings, or as the mother of the infants, and in the further fact that the income is not given to her in any capacity coupled with any duty to the infants. The will directs the income to’be paid in equal -shares to each of the three children until each attains twenty-one years, respectively, and it further directs "the moneys to be paid, nevertheless, not to the said children hut to the widow of the said William H. Jennings* or such other legal guardian as they may have, for their benefit.”

These provisions do- not constitute a bequest to- Mrs. Jerinings of the income, with or1 with out a duty to the children, and there is not the slightest indication in any of the provisions of the will to- show tha-t testatrix intended that Mrs. Jennings should personally have any beneficial interest in this income.

The fact that having made a bequest of the income directly to the children, testatrix in connection therewith directed the payment of the income to their mother, or other legal guardian for their benefit, does not, as claimed, change the nature of the bequest or the beneficiaries of the gift, and does not take- from the children’their bequest and give it to their mother coupled with some undefined dutjr toward them.

The direction for the payment of the money to appellant as the widow of William H. Jennings is not indicative of the capacity in which .she was to- receive the income, hut is merely descriptive of one of the persons to who-m the income was to be paid, as guardian of the children, and in ease she- had not qualified as the legal guardian of the children, then, the wall in terms and effect directs that no part of the income is to be paid to her, but that it is to be paid to- such other legal guardian as the children may have.

I will advise that the order of the orphans court be affirmed.


author: Gummere, Chief-Justice.

text:
    Joseph G. Shannon, executor, v. John Ryan et al.
    [Decided June 14th, 1920.]
    1. The rule of construction of wills that if legacies are given generally, and the residue of the real and personal estate is afterward blended and given in one mass, the legacies are a charge on the residuary real as well as personal estate only prevails where the inference arising from the words used in the residuary clause, taken in their natural and reasonable sense, is not restrained or avoided by other words or provisions in the will, to which due effect must be given in collecting the intent from the instrument as a whole.
    2. Corwine v. Corwine, 24 N. J. Eq. 579, and Johnson v. Poulson, 32 N. J. Eq. 390, explained.

      3. Neither the relationship of the legatees to the testatrix, nor the depth of her affection for them, are elements to be considered in ascertaining whether or not she intended to. charge pecuniary legacies upon her real estate.
    On appeal from a decree of the court of chancery advised . by Vice-Chancellor Griffin, reported in 91 N. J. Eq. 46.

      Mr. Echmn F. Smith and Mr. Raymond Dawson, for the appellant.

      Mr. John Milton, for the respondents.
   The opinion of the court was delivered by

Gummere, Chief-Justice.

The bill in this case was filed by the executor of Ellen J. B. Shea, late of the city of Jersey City, to obtain a construction of her last will and testament. By that will Mrs. Shea, after providing for the pajunent of her debts, and making specific bequests to parties named, gave pecuniary legacies to certain relatives and to specified religious and charitable societies amounting altogether to $48,000. She then, by the thirteenth item of her will, provided that

“should my ¡personal estate .be insufficient to enable the foregoing pecuniary legadles to be .paid, 'then. I direct any exieoutoa.- to iseli either iall or so much of my land at Spuyten Deyvil, in the state of New York, as may be mecessaiw, in such maniaer .ais in Ms judgment is deemed best to. produce funds to supply the deficiency.”

Having made this provision she then disposed of her residuary estate in the following language:

“All the rest, residue and iramialiiiideir io.f my ©states wheresoever situate, and of whatsoever character, I give, devise and bequeath unto’ my three nephews, J. G. .S., J. H. S. and R. 'S., din equal shares to them, their heirs and assigns, absolutely and forever.”

The value of her personal estate available for the payment of the pecuniary legacies is $23,984. The Spuyten Duyvil property has been sold by the executor and produced $3,500. The question submitted for decision is whether, in this situation of tire testatrix’s estate, the pecuniary legatees are entitled to call upon the executor to sell what remains of her real estate for the purpose of paying the pecuniary legacies in full. The learned vice-chancellor before whom the cause was heard reached the conclusion that the legacies were chargeable upon the whole residuary estate, real as well as personal, and a decree was entered in accordance with this view. The executor appeals.

In the case of Corwine v. Corwine, 24 N. J. Eq. 579, it was declared by this court to be a general rule of construction that if the legacies are given generally, and the residue of the real and personal estáte is afterward blended and given in one mass, the legacies are a charge on the residuary real as well as personal estate. In the later case of Johnson v. Poulson, 32 N. J. Eq, 390, in commentipg on the rule of construction adopted by us in the Convine Case, we referred to the fundamental principle universally recognized that the real estate is not charged with the payment of legacies, unless the testator intended it should be, and that this intention must be either expressly declared or fairly and satisfactorily inferred from the language and dispositions of the will, and pointed out that these requirements were complied with in the cited case by giving the words “residue of real and personal estate” their natural and proper force and effect. In the earlier case the testator gave a pecuniary legacy to each of his three daughters, and then gave the entire residue of the estate, both real and personal, to- hisi son. There was nothing in the will, therefore, except the residuary clause from which, the intention of the testator with regard to making the legacies chargeable on the real estate could be ascertained; and we stated in Johnson v. Poulson that it was the absence of any inconsistent words or provisions in the will in the Convine Case which justified the conclusion reached by us and expressed therein, and we then went on to say that “from the nature and grounds of this rule of construction it cannot prevail except where the inference arising from the words used in the residuary clause, taken in their natural and .reasonable sense, is not restrained or avoided by other words or provisions in the will, to which due effect must he given in collecting the intent from the instrument as a whole.”

.Bearing in mind the limitations of the rule declared in the Gorwine Case, and that it is subservient to the cardinal and predominant principle which seeks the purpose of the testator from all parts and provisions of the instrument considered together, we turn to the will row before us to ascertain from an examination of such of its provisions as throw light upon the matter whether or not the testatrix, by blending her real and personal estate in the residuary clause, intended to make the pecuniary legacies a charge upon all the lands of which she died seized. It may be assumed that at the time she made her will she had some doubt whether her personal estate would be sufficient to satisfy all of the pecuniary legacies. That is apparent from the provision of the thirteenth item of the will. It may be conceded also that, except for the presence of this thirteenth item, the pecuniary legacies would be chargeable upon the whole of the real estate of the testatrix under the rule of the Corwine Case. The question remains, Wha.t was her purpose in having that item written in the will ? That she had some purpose cannot be doubted. That this court must give effect to that purpose if it can be ascertained from the language of the provision, and from the other parts of the instrument, cannot be denied; for it is a fundamental rule in the construction of wills that due effect must be given to every provision contained therein. To give to the residuary clause the force attributed to it by the court below results in the complete excision of this item of the will, for the Spuyten Duvvil property is a part of the residuary estate, and if it is subjected by the residuary clause to a charge for the payment of legacies, the item is mere surplusage.

It is suggested by counsel that, as this property is located in the State of New York, and as the New York courts have repudiated the rule of construction adopted by us in the Corwine Case,L it is to be presumed, in ascertaining the intent of the testatrix, that she was familiar with the doctrine of the courts of our sister state, and that her purpose in inserting this provision in her will was to subject that portion of her real estate to- the same charge in favor of legacies that her New Jersey land would be subjected ta by the general residuary clause by force of the doctrine of the Corwins Case. We cannot yield to this suggestion. To attribute to an elderly widow residing in blew Jersey knowledge of the decisions of the courts of a sister state upon an abstruse doctrine relating to the construction of wills, would be to assume a greater acquaintance with the subject upon her part than is probably possessed by a majority of the members of our own bar, to say nothing of the members of this court- before the argument of this canse. Such a presumption is against common experience and cannot be indulged in.

What, then, was- the purpose intended to be accomplished by the testatrix ? The language used by her, as it seems to us, decisivety answers that -question. Having bestowed pecuniary gifts amounting to $48,000 she says:

“•Stauld my peassamal estate be inisufficieinit ito -eauab'le Hie foregoing pecuniary legacies to be paid, then I direct miy executor to isel-1 either all or so nvaoh iof'my land at Spuyten Duyvil in the state of 'New York as may be necessary -to produce funds to supply the defidienjcy.”

She had in mind the possible insufficiency of her personal estate to satisfy legacies. She intended that they should he paid even if it was necessary to. appropriate some part of her real estate for the purpose; and, with this intention present in her mind, she expressly declared to- what extent her real estate should be chargeable — that is, by the appropriation of the Spuyten Duyvil property, or so much of it as may be necessary to- satisfy the deficiency; evidently, considering that this piece of land was of .sufficient value to provide for any deficiency that might he found to exist; and she then provides in, the following clause that what is left of her personal estate, if anything (after the payment of legacies), and what is left of her real estate after appropriating the Spuyten. Duyvil property in the manner already directed by her, shall go to. her residuary legatees and devisees. A contrary intention cannot he read in this will except by entirely disregarding the instruction contained in item 13, in face of the cardinal rule of construction already referred to which requires courts to give due effect to every provision contained in a will.

Counsel for the respondents has argued that the relationship of the legatees to the testatrix should be taken into account in ascertaining her intent; that it is shown that the religious and charitable societies which, were the objects of. her bounty were very close to her heart, and that this fact indicates an intent to make the legacies chargeable on the land. This argument does not appeal to ns. As a general proposition all the beneficiaries in the will of a testatrix are “close to her heart;” some closer than others, it is true, but none of them strangers in whom she has no interest by reason of blood ties, or otherwise. To undertake to determine whether or not a testatrix intended to make legacies chargeable upon her residuary real estate by measuring the depth of the affection which sire had for certain of her legatees would be like attempting to sail a ship without compass or rudder. How great must the affection be, and upon what percentage of the legatees is it to be bestowed, in order to create the charge ? . How slight must it be in order to exonerate the land ? How can courts measure degrees, of affection, or determine the percentage of the legatees upon whom it has been bestowed in full measure? The impossibility of creating a standard by which this can be done is, as it seems to us, a complete refutation of the argument.

For the reasons above set forth we reach the conclusion that the decree under review must be reversed.

For affirmanee — Trenohakd, Minturn, Black, Hepfenheimer, Williams, Ackerson — 6.

For reversal — The Ci-iiee-Justice, Sway.ee, Parker, Bergen, Kaliscit, White, Taylor, Gardner — 8.


author: Swayze, J.

text:
    Thompson's Express and Storage Company, body corporate, respondent, v. Norman Mount et al., appellants.
    [Decided June 14th, 1920.]
    1. A railroad eoarUpamy can. give «u. express campauy ®n exclusive right ’ to operate ¡hades aud oimjmbuses in a case wfliare it ils under no public duty to serve all who come, and iba® express statutory authority to exclude from its property 'all except travelers.

      2. Such privilege) is not mnouisffly disOTimHaia'tory within, .the p-roMbition of 'the Public Utilities act. Supp. Comp. Stat. p. 1280 pl. 17.

    On appeal from a decree of the court of chancery advised by Vice-Chancellor Foster and reported in 88 N. J. Eq. 535.

    The Central Eailroad Company of New Jersey made a written agreement with the .complainant giving it the privilege of soliciting on the platform of the Lakewood station orders for baggage delivery, hack, taxicab and omnibus service, from arriving passengers, and also the privilege of soliciting on westbound trains orders for like service to and from Lakewood station. These privileges were to he exclusive to such extent as the railroad company might lawfully so accord.
    The defendants solicited like orders upon the station platform. The present bill was filed to enjoin this interference with the complainant's exclusive rights under the agreement with the railroad. The injunction was granted and the defendants appealed.

      Mr. Wilfred H. Jayne, Jr., for the respondent.

      Mr. Charles E. Goolc, for the appellants.
   The opinion of the court was delivered by

Swayze, J.

The general question raised is not new. The great weight of authority sustains the complainants. It is enough to cite Barney v. Oyster Bay Steamboat Co., 67 N. Y. 301; Old Colony Railroad Co. v. Tripp, 147 Mass. 35; New York, New Haven and Hartford Railroad Co. v. Scovill, 71 Conn. 136; 41 Atl. Rep. 246; Donovan v. Pennsylvania Co., 199 U. S. 279. It would serve no useful purpose to repeat the reasons so well stated in these cases. All that is required of us is to pass upon the effect of our own statutes.

1. The first act to require consideration is the Railroad act of 1903. Section 22 (Comp. Stat. p.fJ/230) enacts that any railroad company may erect a fence or other enclosure around its stations so as to prevent any persons other than passengers from coming near its trains and may exclude from such enclosures all persons except travelers. The acft is in substance the same as the act of 1839 (P. L. p. 170; Rev. Stat. p. 594) and antedates bjr ten jreai's the charter of the Central railroad. That railroad has therefore always had the right to exclude from its stations all persons except travelers, and the agents of the company. The importance of the enactment to the present purpose is that it demonstrates, if demonstration were needed, that the legislature could not have meant to require railroads to transport passengers beyond their own stations, for such transportation would require the entrance of others — hackmen and the like— to the station grounds. As the railroad business developed and towns increased in size a demand arose for cab' and omnibus service. This was a kind of public service which the railroads might well provide for the better accommodation of the traveling public. Even if they were without authority to do so under their charters, the case would come within the ruling of the United States supreme court in Jacksonville Railway Co. v. Hooper, 160 U. S. 514 (at p. 523). The court said: “Although the contract power of railroad companies is to be restricted to the general purposes for which they are designed, yet there are many transactions which are incidental or auxiliary to its main business, or which may become useful in the care and management of the property which it is authorized to hold and in the safety and comfort of the passengers whom it is its duty to transport. Courts may be permitted, where there is no legislative prohibition shown, to put a favorable construction upon such exercise of power by a railroad company as is suitable to promote the success of the company within its chartered powers, and to contribute to the comfort of those who travel thereon.” It was held in that case that the railroad company might under the Florida statute even lease a summer hotel. The principle was approved by the same court in Union Pacific Railway Co. v. Chicago, &c., Railway Co., 163 U. S. 564, 592, and applied to an agreement by one railroad with another for the right and privilege to move and operate its trains over the tracks of the latter. We do not question the right of the Central Railroad Company to operate hacks and omnibuses in connection with its train service for the convenience of its passengers, and if it had undertaken to do so, perhaps a different question would now be presented. It has not done so but has merely contracted that no one but the complainant shall have access to its station and platform for the purpose of conducting business which the railroad itself has not undertaken. The question we have to decide is not, as counsel urges, whether the railroad in the performance of a public duty can discriminate between the complainant and other haekmen, but whether the railroad company can give the complainant an exclusive right in a case where neither the complainant nor any of the defendants have any right whatever, or, in other words, whether the railroad may select its own company in a case where it is under no public duty to serve all who come, and has express statutory authority to exclude all except travelers. Reason clearly answers in favor of the exclusion. The authorities above cited justify the exclusion on the ground that even where the public duty exists, the right of the railroad company to malee reasonable regulations involves the right to protect itself and its passengers from the turmoil and danger involved in a competition between haekmen on the platform of a railroad station and the consequent liability of the railroad company to respond in damages to a passenger in case of injury. Exton v. Central Railroad Co., 62 N. J. Law 7; affirmed, 63 N. J. Law 356. We are not dealing with visions of possible dangers but with dangers that have actually occurred and led to the regulations for protection of passengers reviewed in the cases cited. No case has arisen of complaint by passenger or traveler of such regulations. The defendants set up rights that do not exist. Their real complaint is not that they have been denied rights, but that a privilege which the railroad was free to refuse to all, has been granted to the complainant. The railroad may well say like the householder in the parable to the servant who demanded more wages than his contract called for because other servants had made a better bargain: “Friend, I do thee no wrong. Is it not lawful for me to do what I will with my own ?” A different case might arise if the railroad were under a legal duty to allow hackmen to do business and ply their calling on railroad propenHy. Our view has not onfy reason on its side but also the authority of the highest tribunal which can pass upon the question of the equal protection of the laws. In the Express Cases, 117 U. S. 1, the United States supreme court held that railroad companies are not required by usage or by the common law to transport the traffic of independent express companies over their lines in the manner in which such traffic is usually carriéd and handled, and need not, in the ab-sense of a statute, furnish to all independent express companies equal facilities for doing an express business upon their passenger trains. The result was that the right of an express company to the necessary transportation rested upon contract and was exclusive of companies having no contract. The reasons are well stated by Chief-Justice Waite on pages 23, 25. A similar question arose in Chicago, &c., Railroad Co. v. Pullman Car Co., 139 U. S. 79. The case is even stronger than the Express Cases, since the court held that the railroad company was under a duty arising from the public nature of its employment to furnish for the use of passengers on its lines such accommodations as were reasonably required by the existing conditions of passenger traffic, including sleeping and parlor cars. This duty, however, did not forbid the railroad company from employing the Pullman company to supply drawing room and sleeping cars, and from giving that company an exclusive right to furnish cars for that purpose. Under that ruling the grant of an exclusive right to the present complainants might be justified by the railroad company assuming to render cab and like services and employing the complainants as its agent. It stands, however, upon the ground that the service is outside of its public duty until voluntarily assumed. Of course, if the railroad company is under no legal compulsion, it may if it voluntarily permits haekmen to solicit business on its station grounds, do so to the extent it chooses and no more. In Santa Fe Railway v. Grant Brothers Construction Co., 228 U. S. 177, the construction company recovered judgment for the value of property destroyed by a fire said to be due to negligence of the railroad company. By the existing contract between the railroad company and the construction company, all risk of loss was to be borne by the latter. T'o this it was answered by the plaintiff that it' is the established doctrine that common carriers cannot secure immunity from liability for their negligence by any sort of stipulation. To this the court said: “Manifestly, this rule has no application when a railroad company is acting outside the performance of its duty as a common carrier. In such case, it is dealing with matters involving ordinary considerations of contractual relation; those who choose to enter into engagements with it are not at a disadvantage; and its stipulations even against liability for its own neglect are not repugnant to the requirements of its public service. The rule 'extends no further than the reason for it. It is apparent 'that there may be special engagements which áre not. embraced within its duty as a common carrier although their performance may incidentally involve the actual transportation of persons and things, whose carriage in other circumstances might be within its public obligation.”

■ The same result was reached by this court in Dodd v. Central Railroad Co., 82 N. J. Law 524; affirmed, on the opinion of our supreme court, 80 N. J. Law &6. The same view was reaffirmed by the United States supreme court in Robinson v. Baltimore and Ohio Railroad, 237 U. S. 84. The rule is applicable in the present ease and precludes the defendants from claiming that the railroad furnish them with facilities which it is not required to furnish anyone.

2. What we have already said probably suffices to dispose of the argument that the making of an exclusive contract with the complainant is unjustly discriminatory within the prohibition of section 18 of the Public Utilities act. Supp. Comp Stat. p. 1280 pl. 17. The act can only refer to what the public utility is under a legal obligation to do, and cannot refer to what it is under no legal obligation to do. Much less can it operate to impose upon the railroad company an obligation to throw open its station and grounds which it is expressly authorized by the Railroad act to close to all but passengers. No right is here infringed since it is entirely open to passengers to employ any cabmen they wish. The injunction only prohibits soliciting on the station platform. The prohibition of the Public Utilities act is directed against unjust discrimination. It is well settled that pi’ovisions of that kind are not infringed where the railroad has undertaken to render services if in fact it need not render them. Interstate Commerce Commission v. Baltimore and Ohio Railroad, 145 U. S. 263; Baltimore and Ohio, &c., Railway v. Voight, 176 U. S. 498. For example, under the Interstate Commerce act it is not unjust discrimination to deliver freight free in one town and not in another. Interstate Commerce Commission v. Detroit, &c., Railway Co., 167 U. S. 633.

These views lead to an affirmance of the decree. The complainant is entitled to costs.

For affirmance — Swayzb, Trenchakd, Parker, Bergen, Min-l'DRN, ¿ALISCH, BLACK, Wl-IITE, plEPPENHEIMER, AcKERSON— 10.

For reversal — Williams, Taylor, Gardner — 3.


author: Parker, J.

text:
    Villa Site Company et al., respondents. v. Henry C. Copeland, appellant.
    [Argued March 5th, 1920.
    Decided June 14th, 1920.]
    1. Uhe lieu- of a trustee for ,a<3iraniceis unlade -by ihiim fe limited to (a) •payments expressly.authorized by tobe oirrstoimemt ,of tost; (6) reasonable expenses in 'carrying lout the dilreictilonis of the tost; (o) in the •absence ¡of smdh dlreotionls, 'expenises reais'onlably mecessai-y .for the security, .protection and preservation -of the tost property, or for the prevention of ¡the failure Of itihe tnuist.
    2. On am .aceouxutimg iby a trustee, the burden is on him to establish items ¡of disdhiange 'by proper proof, especially by vouchers or other proof of a .eon.vin.cing dharaeter.
    On appeal from a decree advised by the late Vice-Chancellor Stevens.
    The litigation began in 1909 and arose out of a situation created in 1892 by deeds of the Villa, Site Compány and the Haworth Improvement Company, to the appellant, Copeland, and a contemporaneous trust agreement executed by him. The first step in the suit wasi a bill by the Villa Site Company praying an account by Copeland as trustee and his removal by the court. Later, Copeland filed a cross-bill praying a lien for his alleged advances under the trust, and a sale of the trust property to satisfy the same. The late Vice-Chancellor Stevens, who> heard the c'ase throughout, discovered that the aifairs of the Haworth Improvement Company were necessarily involved, and directed that as that company had been, adjudicated insolvent; and a receiver had bear appointed, such receiver he brought into, the suit, which was done. An account of the trust was talten before Oscar Keen, Esq., as special master, and on the coming in of Ms report complainant Villa Site Company excepted and the exceptions w.ere generally sustained. A further account was taken before another special master, who restated the first account as revised b}r tire court and dealt with other items accrued later. Copeland excepted to this account and by the decree now appealed from his exceptions were in effect overruled. They related to tire refusal of the master, under rulings of the court, to allow certain credits, claimed by Copeland, who, moreover, denied the existence of a trust and .set up a claim of absolute ownership.
    The foregoing indicates in a general way the dispute between tire parties and should facilitate an understanding of the details as set out in. the following opinion by the learned vice-chancellor, one of several delivered in the course of the suit:
    \ “This suit was commenced ou November 19tlr, 1909, and has been litigated with unusual acrimony ever since.
    “Stated in veiy general terms, it is a suit brought by a small land company in Bergen county to compel defendant, Copeland, who holds the legal title to its lands on an alleged trust, to convoy to a new trustee to be appointed by the court. The bill prays for an account and general relief.
    “In April, 1892, the Villa. Site Company, formed for the purpose of cutting up a farm property in Haworth, Bergen county, into- lots and selling them, was in financial straits. The defendant, Copeland, was a New York banker who had theretofore lent it money. He was applied to' for a further loan, and to secure him both, for what he had already advanced, or become responsible for, and for what he was about to advance, the Yilla Site Company, ou April 9th, 1892, conveyed to him by deed absolute in form all of its real estate. Within one month thereafter an agreement in writing was executed by it and by Copeland which provided that Copeland would ‘hold in trust for and convey to said Yilla Site Company, or to- any other person or company whom it might name by proper deeds of conveyance containing usual covenants against grantor’s acts,’ the premises described in the deed of April 9th, 1892, and in another deed made to him by the Haworth Improvement Company, according to the terms .•and conditions thereinafter mentioned. These conditions were, •.that he would make conveyance of such parcels as should be sold by the general agents of the company, and that he would apply the net amounts received ‘immediately upon its receipt by him in payment and satisfaction, or part payment and satisfaction pro- temió, of the debts and claims set forth’ in the schedule thereto annexed, and that upon payment of the last of such claims, he.would reconvey the residue then remaining to the company or to any other person or corporation it might name, provided ■ that prior to the conveyance there should be transferred to him one hundred shares of its stock, and that there should be transferred to Wilbur E. Herrick and Kate M. Holbrook ninety-eight shares each.
    “Schedule A, appended to this agreement, provided that the application of the moneys received by Copeland should ‘be made in the following order as nearly as practical
    “1. All commissions and expenses to the selling agents.
    “2. All taxes, all interests and other payments on mortgages now or hereafter on said property and sufficient sums to> procure releases of lots when sold from the lien of mortgages thereon.
    “3. All money loaned by Copeland to the company with interest and two notes for $1,800 and $1,000 specifically described.
    “4. Eour thousand dollars due to Wilbur E. Herrick from Kate M. Holbrook with interest.
    “5. Humorous notes specifically enumerated which seem to have been debts contracted by Mrs. Holbrook’s husband in promoting the company and improving its property.
    “Simultaneously with the making of the foregoing agreement the Villa Site Company entered into an agreement with Wilbur E. Herrick and Kate M. Holbrook, whereby they were employed as its sole and exclusive agents to sell the land referred to in the trust agreement. They were to receive commissions of thirty-three and one-third per cent, on gross sales. If these commissions should amount to more than enough to pay all commissions tó subagents and all other expenses of sale, ‘including advertising, office rent, printing, stationery, incidentals, &c., and in addition thereto' the sum of $150 per month to- each-of said Herrick and Holbrook, then the balance-of said commissions was to be paid and returned into the treasury of the Villa Site Company,’ not, it may be observed in passing, to Copeland. The selling agents’ contract was to continue in force for a term of two years, and should Herrick and Holbrook he unsuccessful in disposing of the lots, then it was to continue ‘until such time as all other property was sold and the liability canceled and the assets divided.’
    “Holbrook and Herrick appear to have. been, the promoters of the company and to have owned or controlled its stock. The scheme was to. secure first to Copeland and then creditors of Holbrook and his wife, and while the land was being disposed of, to keep down charges, such as taxes, &c., and to give to Herrick and Holbrook a salary of $150 a month, each, payable only out of the receipts from sales if large enough.
    “Herrick and Holbrook were unsuccessful. Pew lots were sold and little was done until 1906, thirteen j^ears later, when a new agency contract was concluded with one Smith. He, in the years 1906-1908, was able to malee sales aggregating, according to Copeland’s answer, $48,000.
    “Then the parties quarreled. The Villa Site Company, against Copeland’s protest, entered into a new agency contract with one May, and Copeland refusing to give deeds to those to whom May contracted to sell, this bill was hied.
    “On July 10th, 1893, i. e., a year after the conveyance, at a stockholders’ meeting of the Villa Site Company, Copeland was elected a director to serve with four other directors, viz., Wilbur P. Herrick, Kate M. Holbrook, George Holbrook and William W. Pendleton. Prom the minutes of this meeting, it appears that three hundred shares of stock were then outstanding and that Wilbur P. Herrick and Kate and George Holbrook represented two hundred and ninety-seven of them. On the same daj7, at a directors’ meeting, Copeland was elected president and treasurer. These offices he held until 1908. No meeting of either stockholders or directors was held between January, 1895, and July, 1906. In 1903, tire company’s charter was forfeited by proclamation of the governor for non-payment of taxes, hut was reinstated in JuL, 1906.
    “Mr. Copeland was in the progress of the litigation directed to account before Oscar Keen as master. According to the report, lie liad up to t-liat time received: From sales of land, $31,622.20 ; from other sources, $24,963.86.
    “He had disbursed: Eor taxes, $14,339.90; for principal and interest of mortgages, $18,952.23; for other expenses, $39,-327.92.
    “Copeland had on the hearing and before the reference resisted the application to account and denied the trust. He admitted that he had executed the agreement, but he insisted, notwithstanding, it imposed no legal obligation upon him. His position which was, and sti,ll is, unintelligible to me, is best expressed in the concluding paragraphs of his answer:
    “ ‘Defendant admits that since the conve3rance to him of said property in bill of complaint; he- has treated said premises as his own, and has regarded himself as owner thereof in fee-simple, and that he has stated, and he now avers, that he does not hold same as trustee, but, on the contraiy, says that he is the legal owner thereof, and that the conve3rance thereof by said Villa Site Company and Haworth Improvement Company was absolute and vested in him the legal title, and in accordance with the agreement entered into at that time with, complainant, he was to take said property as the owner thereof as security for the advances made and to be made by him and in full satisfaction thereof and was to sell the same when andi upon the terms he should deem just, and that out of the said proceeds of the same, he was to reimburse himself for his said advances and the expenses chargeable against said property and was to pay over’the balance, if any, to certain persons agreed upon, and who are named, and in the order named ih Schedule A of the agreement of 1892.’
    “The agreement which lie thus avers he made differs materially from the written agreement executed by him shortly afterwards which, of course, according to the settled rules of law, superseded it.
    “Acting on the idea that he was, to all intents and purposes, absolute owner, he kept no proper account; and his failure to do so has made it difficult, if not impossible, to state with any degree of accuracy the sum which the company now owes him.

      “To the account as .stated numerous exceptions have been filed by the Villa Site Company. They called in question the propriety of the allowance of many items of disbursements both on the ground that they are not supported by vouchers or proofs and on the ground that, if proved, they are not proper subjects of allowance.
    “This necessitates an inquiry into the character of the so-called trust agreement. There is absolutely no proof that it has ever been modified or rescinded. It seems plain that the conveyance and agreement taken together are nothing more than a mortgage security. Out of the moneys received from the sales of the land, Copeland is to pay, first, the commissions of the selling agents, then taxes and interest; 'then to reimburse himself for advances, and then to pay certain notes contained in a schedule. The land, or what remains of it, is to stand as security in his hands until all these payments are made; after which he is to reconvey what is left to the Villa Site Company. In other words, the land is charged with, certain debts and expenses, and is to be reconveyed when these debts and expenses are paid.
    “If this be so, it is obvious that the master in stating the account paid no regard to the dual character which Copeland occupied. As so-called trustee under the agreement, he held the land as security for the payment of debts; asi president and treasurer, he had those powers of management and disbursements which fire company’s by-laws gave him. If, as president or treasurer, he did acts o>r made payments justifiable in themselves, it does not follow that the land is to stand as security for them. Copeland must be able to show that they are covered by the mortgage agreement.
    “For instance, he cut off valuable timber and admits that he incurred a loss in so doing. This loss he seeks to charge to the land. It is evident that it is not covered by the mortgage, yet the master allows him for it. Again, the master allows him compensation to the amount of $13,250. This he could only do on the theory that he was practically manager of the company'from 1893 to 1910, and that he should have compensation as such. If this be so, the compensation is not secured by the agreement.

      “No doubt Copeland -when he advanced money insisted upon being put in a position to control expenditure, and so he was made president and treasurer. But the conveyance made and the agreements' signed do not warrant the inference that the company intended to do the ultra vires act of substituting Copeland for itself and for imposing upon him the obligations and duties which the law imposed upon it. This appears not only from the limited character of the powers conferred by the agreement itself, but by the significant fact that at the very time it was executed the company itself, not Copeland, made an agency contract with Herrick and Holbrook vesting them with large selling powers and giving them a commission intended to cover not only the usual agent’s commission for selling, but office rent, advertising, and, it is claimed, grading, &c. One of the provisions of this agreement was, that if the commission thirty-three and one-third per cent, should be more than sufficient to pay commissions of subagents, &c., and, in addition, $150 per month to Herrick and Holbrook, the balance should be'returned and paid, not to Copeland, but to the treasury of the company. This agreement was assented to by Copeland in writing. The plan was that the company should sell ‘at prices equaling or exceeding two cents per square foot for lots lying east of Herrick road and one cent for lots tying west.’ If thus sold Copeland wasi bound to make a deed just as any mortgagee is bound to make a release of parts of the mortgaged premises if -the ihortgage so provides.
    “The various writings taken together make up a scheme harmonious in itself and within the powers of the company, at least to a certain extent, and the scheme was apparently pursued up to the time of the quarrel. The company improved the land and sold lots whenever sales could be effected. Copeland’s duties as mbrtgagee in trust were performed by his making conveyances when deeds were presented for hisi signature, paying out of the price commission, taxes and interest, and keeping the balance to reimburse himself and to pay the designated creditors. For this service the agreement provided that he was to have one hundred shares of the company’s stock, which have in fact been transferred to him. This compensation, adequate or inadequate in the final outcome, was the compensation agreed upon. If for performing the duties of president and treasurer he should receive more the allowance must be made by the receiver appointed in a winding-up- .proceeding.
    “I have already stated that the master’s report shows that from January 5th, 1894, to November 1st, 1910, Mr. Copeland received from salesi of land $31,622.20.
    “And that he paid for taxes, assessments, interest on mortgages and releases, $33,292.13.
    “This is an overpayment of $1,669.93.
    “Mr. Copeland says further that he lent, in addition, $10,-326.20. The master has allowed it. Its correctness was attested by both Herrick and Holbrook as far back as October, 1893. As these gentlemen knew more about it at the time¿ and had a greater interest in verifying the amount than anyone else, I see no reason to disagree with the master’s Ending. This money appears to have been lent before, or contemporaneously with, the making of the deed and agreement. Mr. Copeland has no account of the items that go to make it up, but the lack of them is, I think, fairly sup-plied bjr Herrick’s and Ho-lbrook’s written admission that it is correct.
    “The master’s report shows that Mr. Copeland received from rents, $2,270.16; from sales of wood, $3,557.57; from sources other than sales of land, $19,136.13.
    “I do not think he should be charged with these receipts in this account. The only moneys which, by the terms of the agreement he was authorized to- apply to the- payment of taxes, interest and other items mentioned axe the moneys derived from the sales of lots. He received the other money not as trustee- but as treasurer. Consequently, he cannot in this proceeding be charged with, them as mortgagee- in trust, nor can he, per contra, he credited with payments in Schedule H, amounting to $39,327.92, excepting the item $10,326.20 already referred to. They were not made by him under the trust agreement. Whether all the items in -this schedule should he allowed to- him as treasurer, notably the items, ninety-one checks-, $3,391.84; s-ixty-four checks, $1,-480.42, cannot now be- decided. Whether the receiver should allow them unless more satisfactorily explained, may require consideration on. the part of that officer
    "It may be that in the greatness of figures presented I have overlooked items which ought to be included in the present account on the principle here laid down. If so, counsel may call my attention to them.
    “I think that no interest should be charged against Mr. Copeland for money received from sales. It was proper to hold it for the purpose of disbursements, and a sum equivalent to the receipts up to the year 1903 was actually paid out for taxes, interest and releases that had accrued or been given by that time. He should he allowed interest on any balance due him after he began to advance his own money. He should also receive interest on $10,326.20 from the time when interest ceased to be paid to or taken by him.
    "It is self-evident that the company’s affairs cannot he settled unless a receiver he appointed, but the bill is not drawn with that relief in view. It asks for the appointment of a new trustee in place of Mr. Copeland. If I have correctly apprehended the principle on which this case turns, such: an appointment would not he proper. With the limited powers conferred upon the mortgagee in trust, it would fail to meet the situation. Besides Mr. Copeland is entitled to’ hold his security until payment. If a stockholder will apply for the appointment of a, receiver, the whole controversy can he finally determined.
    “To avoid misapprehension, I may sajr that I have not overlooked the fact that on the face of the agreement there appears to he an attempt to apply the land of both the Villa Site and the Haworth companies to the payment of the debts of the Villa Site Company and of individuals; and there appears to be a direction that any surplus remaining, whether it be surplus derived from the Haworth company’s lands or the Villa Site Company’s lairds, be transferred to the Villa Site Company. How far the agreement may in these respects he ultra vires and incapable of enforcement, must he left to future determination. This emphasizes the necessity for a receiver of the Villa Site Company. A receiver of the Haworth company has already been appointed.”

      Mr. Julian G. I-Iarrison, for the appellant.

      Mr. Wendell J. Wright, for the respondent Villa Site Company.
   The opinion of the court was delivered by

Parker, J.

The attack on the decree covers items and classes of items claimed by appellant as credits in his account and disallowed below, and the general theory of the cáse as formulated by the vice-chancellor. We may say at this point that we concur in his theory as the correct one, and as dispositive of practically all the points urged on this appeal. At the same time we deem it best to consider them specifically as presented.

The first point stated is' that appellant “is entitled to credit for all payments to Herrick enumerated in Schedule H of the Keen report.” •

An examination of the schedule shows that the payments claimed are not within the terms of the trust agreement; and it is not seriously claimed that they are. They would fall, if anywhere,' under section 1 of the Schedule A attached to that agreement, and which in the opinion set out above is paraphrased rather than quotéd. It reads: “All commissions and expense according to contract this day made between the Villa Site Company, of Haworth, New Jersey, and Wilbur R. Herrick and Kate Minor Holbrook.” This agreement, as noted by the vice-chancellor, provides a definite commission of thirty-three and one-third per cent., with certain qualifications not now material, except a limit of $150 per month over specified disbursements. The payments specified in Schedule H seem to have no logical relation to any such scheme. It is now suggested that they are a fair substitute for it; and that payments made to Herrick and. not authorized by the trust should be charged against his equitable interest under the trust agreement. As to the first suggestion, we agree with the vice-chancellor that the payments were made not as a trustee, but personally or as an officer of the Villa Site Company, and while in the latter case no doubt recoverable from that company, they were not chargeable as liens in favor of Copeland under the trust agreement. As to the second suggestion, we do' not find that the claim of Copeland against Herrick’s interest was raised by the pleadings. Certainly it is not adjudicated, the questions determined relating to what credits Copeland is to have as against the land of the Villa Site Company for expenditures under the trust agreement.

The second and third points relate to items for which credit is claimed, and which appear in Schedule H as, “sixty-four checks, $1,480.42; ninety-one checks, $3,391.84.” As to these, there seems to be no evidence whatever except that in Copeland’s passbook these totals are entered as of checks paid out of the trust account. The checks themselves were not produced and there is nothing to show their respective dates, amounts, name or payee, or for what given. The duty of a trustee to keep proper accounts and submit proper vouchers is too well settled to need discussion; and while in some cases he may be excused from producing vouchers, the burden of proof of all items of discharge is on him. The subject was recently discussed by the present chancellor in Smith v. Robinson, 83 N. J. Eq. 384. On these claims there was no proof worthy of the name.

The fourth point is a similar- claim for allowance of what is called the “Gray National Bank” note, also' in Schedule H. An examination of this instrument shows it to be signed by “T. W. Holbrook, Vice-Prest.” (of the Haworth Improvement Company as Copeland testified) to the order of H. C. Copeland. Nowhere does the name of Villa Site Company appear thereon; and why it should be fastened on the assets of that company is not made plain.

The fifth point is a repetition of the claim relating to sundry disbursements in Schedule H, and is covered by what has been said under the first point.

. The sixth point is, that even if the moneys disbursed by Copeland were paid without regard to the terms of the trust agreement, the company should not be allowed to lift the trust deed (tantamount to a mortgage) unless on repayment of all moneys advanced for its benefit. There are authorities which hold that a trustee is entitled to a lien on the trust property for outlays properly incurred and paid for its care and preservation, in connection with the performance of the trust. The rule, as laid down by Professor Pomeroy, is this:

“Dh& trastea As enibittad 'to be allowed * * * foi* all Ms .proper expenses owt of pocfeet, which inidudie ial'1 paymiemibs expressly authorized by the instrument of trast; all reasonable 'expenses in carrying out the directions .of the trust, 'ain'd, dm the absence of any such direefóioms, all expenses reasonably necessary for (the .security, protection, and preservation of ibhe trast property, or for the prevention, of a. failure of the trust. * * * Wlhere a trustee .properly advances money for any of the above1memtioned obgteebs, so that he As anitiitiled to reimb.ursem'emt, he also has a lien as security for the claim, either upon the corpus of the trust property or upon, the income, as 'the case may b'e; but for moneys improperly paid there is mo lien.” Pom. Bq. Jur. § 1085.

This was the rule adopted by this court in Turton v. Grant, 86 N. J. Eq. 191. Applying it to the present case, we agree with the vice-chancellor that the moneys disallowed, so far as shownj to have been actually paid, are not shown to have been paid for purposes that bring them within the scope of the rule; and hence are not proper either for allowance in the account or for a basis of lien. Thisi result disposes also of the eighth and last point.

The seventh point is, that the Haworth Improvement Company had no equitable interest in the subject-matter of the suit, and that consequently there should have been no adjudication in the decree recognizing the receiver of that company. In answer to this it is sufficient to say that a reading of the deeds made contemporaneously by the Haworth Improvement Company and its sister concern, the Villa Site Company, to Copeland, and the trust agreement reciting such deeds and describing in detail the properties and setting out the terms of the trust, makes it quite obvious that the Haworth company became a cestui que trust on terms substantially identical with those affecting the Villa Site Company.

These considerations lead to an affirmance of the decree in all respects.

For affirmance — The Chiee-Justioe, Swayze, Trenoi-iard, Parker, Bergen, Minturn, ICalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner, Aokerson — 14.

For reversal — None. ' ‘


author: Bergen, J.

text:
    Clarence B. Story, petitioner-appellant, v. Emma V. Story, defendant-respondent.
    [Submitted March 2d, 1920.
    Decided June 14th, 1920.]
    Where, on the trial :of a isuit for divorce based cun -the adultery of a wife, thie proofs Show a desire to commit the crime, and opportunity to gratify it, coupled with some evidence tending to .show the actual commission of the offence, it is sufficient to sustain the charge, and its preponderance i's not destroyed by proof that the desire wlould probably mot, but possibly might, exist, if the wife was suffering from the ordinary consequence ’of an abortion performed on her two months prior to the adultery charged.
    On appeal from a decree by tbe chancellor dismissing a petition for divorce advised by Advisory Master Grey.

      Mr. Patríele H. Harding, for tbe appellant.

      Mr. William G. French and Mr. Samuel T. French, for tbe respondent.
   Tbe opinion of tbe court was delivered by

Bergen, J.

Tbe appellant filed a petition against his wife for divorce upon tbe ground of adultery, and the chancellor, upon the advice of an advisory master, made a decree dismissing the petition, from which petitioner appeals. The case rests entirely upon the proper inferences to be drawn from the testimony exhibited in the record laid before us, much of which is of a character not proper to be given further circulation, nor is it necessary in giving our reasons for the conclusion we have reached. The testimony shows that the parties disagreed as to the conduct of the wife in receiving men, during the husband’s absence, at the house where they resided, and particularly about her intimacy with a married man named Ross, resulting in their separation and a division of the furniture, the wife taking her portion to a warehouse and the husband subsequently disposing of his. After the separation the wife took employment in a shop, but continued her intimacy 'with Ross, meeting him on the street, late in the evening, and together frequenting a saloon, or place where intoxicants were sold, from which, on at least two occasions, they went about eleven thirty at night, to a base ball ground where they were seen, by a detective who was watching them, in what seemed to be a compromising position on one of the benches there. So we have this situation, a married woman separates from her husband -because he complains of her associates and especially of the man, Ross, am-d notwithstanding the husband’s protest continues her association with him after the separation, meeting him on the street, under circumstances sustaining an inference that it was by appointment, going with him to drinking saloons and from there to an unfrequented base ball ground at midnight, where they were found lying on a bench. This is convincing proof of opportunity, desire and accomplishment. The fact of meeting on the street, visiting saloons, and the presence of both respondent and her paramour in the ball ground is admitted by respondent. Her defence is a denial of desire, or, if that existed, that she availed herself of the opportunity. Her excuse for going to the ball ground with Ross, in the dark and at the late hour is that, she had procured some purchasers for piano players, sold by Ross, for which he was to pay her commissions, and that they went there to have him pay her money due for commissions. This is an incredible story. They had just left a saloon where the business could have been transacted where it was light, and went to- an open lot where the darkness, according to the proof, was so intense that it is doubtful. if money could have been counted. We do not credit this testimony. The only other defence, is that her physical condition, produced by an abortion, was such that it is to be presumed that she would not commit adultery. The testimony of her physician does not support that contention. He testifies that after an abortion a woman would usually become absolutely normal in six weeks, and that sexual intercourse during that period would not be probable, but possible. The abortion happened April 5th, 1919, the adultery charged occurred June 4th next, or two months thereafter. We are of opinion that where the proofs show a desire to commit adultery with an opportunity to gratify it, coupled with some evidence tending to show its actual commission, as in this case, it is sufficient to sustain the charge, nor is the preponderance of such proof destroyed by proof that the desire would probably not, but possibly might, exist, if the wife charged was suffering from the ordinary consequences of an abortion performed on her two months prior to the offence charged. We think that under the evidence in this case the adultery of the wife was proven, and that the appellant is entitled to a divorce from his wife for that reason. The decree appealed from will be reversed and the prayer of the petition granted.

For affirmance — Garrison, Black, Taylor — 3.

For reversal — The Chief-Justice, Swayze, Tkenchakd, Parker, Bergen, Minturn, Heppbnheimer, Williams, Gardner, Ackbrson — 10.


author: Minturn, J.

text:
    Robert A. Welch, respondent, v. International High Speed Steel Company, appellant.
    [Argued March term, 1920.
    Decided June term, 1920.]
    On appeal from a decree of the court of chancery advised by AHce-Chancellor Stevens.
    The question at issue was one of fact — i. whether the parties intended by an oral agreement, pending the execution of 'a .written agreement, to pay to complainant a weekly salary and expenses, plus a royalty of thirty-three and one-third per centum, on the sales of a patented article. The special master and the vice-chancellor having found such to be the fact, our review of the testimony confirms their conclusion.

      Messrs. King & Yogi, for the respondent.

      Mr. Arlhur Lowell, for the appellant.
   The opinion of the court was delivered by

Minturn, J.

Pending determination by defendant as to whether it would enter into a final written contract with complainant for the making and selling under a license of complainant’s patented “Champion H. Bit,” intended for use in drilling operations, the complainant alleges that the defendant entered into an oral contract whereby the defendant agreed that it would manufacture the bits and appliances under complainant’s device, and would engage him as a salesman, at the weekly compensation of $25 and expenses, and would pay him a royalty of thirty-three and one-third per centum upon the net profits to be derived from such manufacture and sale; such royalty to be at the minimum figure of $1,200 per year; that the complainant performed the services for a period, and received a quarterly payment from defendant, based upon the minimum royalty; that the parties failed to agree upon the terms of the -final contract, and that complainant thereafter notified defendant to desist from further manufacture of the patented article. Failing to reach an adjustment of the amount due to him, under the terms of the oral agreement, the complainant filed this bill for an accounting, and also for an injunction to prevent it from further manufacturing and selling the appliance.

The learned vice-chancellor by agreement of the parties dealt only with the accounting feature of the bill, and referred that matter to a special master to state the account. The special master reported that there was due to complainant upon the royalty basis the sum of $666.66, and the report after argument was confirmed by the vice-chancellor, and from that decree this appeal has been taken.

The question is entirely one of fact. We tliink the privilege accorded to the defendant of manufacturing and vending the patented article during the interim preceding the proposed execution of the written contract, of which privilege it fully availed itself, was a sufficient consideration for the promise of payment made to the complainant as a basis for the oral agreement. The amount awarded to the- complainant was based upon the terms of the oral agreement, and that agreement having been vindicated by the finding of the special master, as well as by the approval of the vice-chancellor, our review of the facts has led us to conclude that the conclusion thus reached was correct.

The decree appealed from will be affirmed.

For affirmance — Tire Gluei'-Jostice, Sway,ze, Trehci-iaed, Parker, Bergeh, Mikturn-, Kalisci-i, Black, White, HepPENHEIMER, WILLIAMS, TAYLOR, GaRDKER, AcICERSOH-14.

For reversal — None.


author: Kalisch, J.

text:
    Robert N. Keely and George Pfeiffer, Jr., complainants-respondents, v. Henry M. Black, defendant-appellant, Farmers Telephone Company and New York Telephone Company, defendants-respondents.
    [Submitted March term, 1920.
    Decided June 14th, 1920.]
    Where .the president of a .company acquires stock in, that company hy purchase, ®nd, isMbsequemtly, sells the stack so acqiuired, together with the ebook Ihe ;ownled prior to suck purchase, 'to lanloither, he is mot acting in a fiduciary capacity as to the company of which he was president, and is not liable to account to the stockholders of that Company for his profits in the transaction.
    On appeal from a decree advised by Vice-Chancellor Backes, reported in 90 N. J. Eq. 439.

      Mr. Harold B. Wells, for the appellant.
    Jlfr. Man-tin V. Bergen and Mr. Thomas- F. Gurley, for the complainants-respondents.

      Mr. David A. Newton, for the New York Telephone Company.

      Messrs. Collins & Corbin, for the Fanners Telephone Ccmpany.
   The opinion of the court was delivered by

Kalisch, J.

The complainants, Eobert N. Keely and George Pfeiffer, Jr., .holders of eighty shares of stock of the Farmers Telephone Companj7, filed their bill of complaint on behalf of themselves and all other stockholders of that company who were desirous of joining hi the suit as parties complainants.

The bill is founded upon the theory that Henry M. Black, who was the president of the Farmers Telephone Company, violated the trust and confidence reposed in him as such officer and director of the company, in that he secured the transfer of certain property rights of the company, and the control of the company to the New York Telephone Company, whereby he secretly profited to the extent of $28,635; and, therefore, the complainants ask for relief that he be compelled to account to and pay over to the Farmers Telephone Company the sum alleged to have been received by him as secret profits, and any other profits which he may make by reason of a certain contract entered into between him and the New York Telephone Company.

The court of chancery decreed and ordered that Henry M. Black pay to the Farmers Telephone Company the sum above stated, with interest thereon from March 14th, 1919, and to pay a counsel fee of $500 to complainants'’ counsel. From that decree the appellant, Henry M. Black, appeals to this court.

The facts are these: The Farmers Telephone Company was the owner of a telephone system which covered an area of about four hundred and fifty square miles, and 'was operated in Burlington, Monmouth and Ocean counties, under an agreement with the Delaware and Atlantic Telegraph and Telephone Company and the New York and New Jersey Telephone Company, both of the latter companies being part of the Bell system, by which the Farmers Telephone Company received fifteen per cent, of toll messages in its territory. Under this arrangement the latter company obligated itself to install the telephones and appurtenant equipment. In June, 1917, the cantonment, known as Camp Dix, at Wriglitstown, was constructed by the federal government as a training camp. The cantonment was within the territory of the Farmers Telephone Company. While the cantonment was being put in order for the reception and accommodation of troops, the federal government desired telephonic service provided, and arranged for such service with the Farmers Telephone Company. It seems that the government was desirous of having the Bell system, which was under the control of the New York Telephone Company and the Delaware company, installed, and to accomplish this end those companies entered into an arrangement with the appellant, president of the Farmers Telephone Company, to take the work of installation and operation off the hands of the latter company, and this was done. The proofs show, and it is practically conceded by the complainant, that it was a financial benefit to the Farmers Telephone Company to be released from the obligation of installing and operating this service. The agreement further provided that the Farmers company should receive from the Bell companies five per cent, the first year of the toll messages within the released territory, and ten per cent, thereafter. It is conceded that at the time of the making of this agreement the Farmers company owed about $11,000, and that tire estimated cost to build a telephone system in the cantonment was $50,000. The agreement was signed by the appellant, president of the Farmers company, and was shortly thereafter ratified by the board of directors. In. consideration of the various undertakings by the companies, the agreement provided that Mr. Black should acquire and turn over to the Bell companies a controlling interest in the Fanners company, through the acquisition of its stock.. He was to acquire for the companies the whole of the outstanding stock, and if he could not accomplish this, then, to acquire all that he was able to over and above fifty-one per cent., and as an inducement to do this the companies agreed to pay him a bonus over the par value of the stock. The Farmers company was capitalized at $100,000, divided in two thousand shares1 of $50 par. Mr. Black owned in his own right about five hunderd shares which he transferred to the companies. Together with the stock he acquired from other stockholders he delivered to the companies one thousand nine hunderd and nine shares and received $28,635. Hone of the stockholders who sold his share to Mr. Black is here complaining. He acquired all shares except the eighty shares held by the complainants, bjr paying par value for each share. For the stock acquired by him from other stockholders, consisting of one thousand four hundred shares and transferred to the companies, he received a bonus from the companies of $21,000. The $28,635 decreed by the vice-chancellor to be paid to the Fanners company included the'bonus which Mr. Black received from the companies for the transfer of his own shares of stock he originally owned.

The dominating idea pervading the vice-chancellor’s conclusions is, that Mr. Black in acquiring the stock of the stockholders and selling the same, together with his own to the telephone companies acted in a fiduciary capacity. In this view we cannot acquiesce. It is true that in bringing about a transfer of the telephone business of the cantonment he was acting in a fiduciary capacity, and any profit he might have made out of that transaction he should account for to his cestui que trust. The proof fails to show that he received anything from the Bell companies or any other source on that account. The moneys paid to him were for his services in acquiring and transferring the stock, and in doing that he did not occupy a position of trust with relation -to the company of which he was president. It seems to us that he had a perfect right, as an individual, to purchase the stock from the holders thereof at such prices as he and they should agree on, and after buying it he was entitled to sell it again for such price as he and a purchaser should agree on. In these transactions he occupied no relation of trust either to the Farmers company or to> the various stockholders. For it is important to observe that he was not dealing with the property of the company, but with his own, the title to some of which he derived from other stockholders. That is the significant feature of the present case, which distinguishes it' from the cases relied on by the respondents.

Moreover, it is a fact not to be overlooked, that although the bill of complaint was filed for the benefit of all stockholders who may see fit to come in, that none of them has seen fit to do so, and the natural inference is that none has any complaint to malee.

It is further to be noted that to carry out the decree of the court below would lead to an anomalous situation. For, as it appears, the holder of all the stock of the Farmers Telephone Company, except the eighty shares of the two complainants, is the Bell company, and its holdings are some nineteen hundred and odd shares, out of the total issue of the two thousand. Wow, if the money received by Black above the par value of the shares is to be paid back to the Farmers company, the result is that the Bell company, after having made the contract regarding the purchase of the stock with Black, and having paid its money in performance of the contract, will get back nineteen-twentieths of the amount so paid. We- cannot conceive of a more unjust and inequitable result than to force the Bell company to take back this money- which it paid in good faith and for the return of which it does not ask.

The decree of the court below is reversed, with costs.

For affirmance — Wone.

For reversal — Ti-ib Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisoi-i, White, IIeppeni-ieimer, Williams, Tayloé, Gardner, Ackerson — 13.