source: Caselaw Access Project

author: Grey, V. C.

license: Public Domain

text:
    People's Traction Company et al. v. Central Passenger Railway Company.
    [Filed July 1st, 1904.]
    A litigant, against whom a cause has been finally decided in the supreme court, who has in good faith promptly taken a writ of error to the court of errors and appeals, which he is diligently prosecuting, and who is unable to secure from any law court a restraint against such a change in the status of the subject-matter of the controversy as may make nugatory the judgment of the court of review when pronounced, has (if the matter in dispute is one worthy to be considered by a court of justice) an independent equity, which this court will recognize and protect, to prevent his successful opponent from radically altering the situation of the subject-matter in dispute pending the determination of the writ of error.
    On bill for injunction. On rule to show cause, &c.

      Mr. Eli II. Chandler, for the complainants.

      Mr. Clarence L. Cole, for the, defendant.
   Grey, V. C.

One of the complainants, the People’s Traction Company, is a trolley company, incorporated under the act of March 14th, 1893 (Gen. Stat. p. 3235), which claims that it has, by filing a description of the route on December 23d, 1903, acquired the exclusive right to build a line of street railway over certain streets in Atlantic City (among others over Virginia avenue) for a period of six months thereafter. The other complainant, Corson, is the owner of a lot of land lying on and in that avenue.

The complainants allege that the defendant company, which was incorporated under the Street Railway act of 1886, subsequently to the acquirement by the complainant company of its aforesaid exclusive right to lay a street railway in Virginia avenue, has secured an ordinance from the city of Atlantic City authorizing the defendant company to build and operate a line of street railway over the same streets (among others, in Virginia avenue) in which the complainant company contends it had already obtained its exclusive right.

That the validity of the defendant company’s ordinance has been challenged by the complainant company by a writ of certiorari, allowed by the supreme court, in the case entitled People’s Traction Co. v. Atlantic City et al. That a hearing has been had of that cause in that court, and judgment has been there rendered in favor of the defendant company and adverse to the complainants. That a writ of error has been promptly taken by the complainants, removing the judgment of the supreme court into the court of errors and appeals, where the cause now remains pending but undetermined.

It further appears that the defendant (the Central company), while the complainant (the People’s company) is -prosecuting its writ of error with diligence and in good faith, and before the cause can be heard, is about to construct its railway in and along Virginia avenue.

The complainant company prays that the defendant company may be enjoined from occupying Virginia avenue in derogation of the alleged exclusive right of the complainant company to construct a line of railway thereon, and the complainant Corson that the defendant may be restrained from tearing up said street and impeding and obstructing travel thereon, &c.

TJpon the filing of the bill, copies of proceedings and affidavits annexed, an order was allowed to show cause returnable to-day (June 14th) why the complainants should not have the relief prayed for in their bill of complaint, with' an ad interim stay, &e.

On the coming in of the order the defendant company filed an affidavit, showing that the supreme court, in the certiorari suit, in holding that the defendant company’s ordinance was-legal, had refused to allow a writ of supersedeas pending the hearing of the writ of error, taken to review its judgment, because that court doubted whether it had the power to allow such a writ after final judgment pronounced.

The defendant’s affidavit frankly admits that before the writ of error can he heard, which will, finally determine whether its occupancy of Virginia avenue is lawful, it is proceeding to construct its railway on that avenue.

The question argued is whether the complainants are entitled to a preliminary injunction, restraining the defendant company from proceeding with the occupation of Virginia avenue, and thereon actually constructing its railway while its right so to do is challenged by a pending suit at law, which is as yet not finally determined.

• The effect of the proposed action of the defendant company will be radically to-change the status of the subject of the litigation before the pending suit regarding it can he determined, so that if the court of errors and appeals shall sustain the complainant company’s contention that it has acquired the exclusive right under section 6 of the trolley statute to occupy Virginia avenue, the judgment of that court will bo of no benefit to the successful litigant, for its exclusive right will have been destroyed by the action of the defendant company in constructing its own railway in Virginia avenue while the question was awaiting determination.

The situation is such that if this court refuses to act, so as to maintain the status of the subject-matter of the controversy until the judgment of the court of errors and appeals can be obtained, the complainant company is without remedy and must suffer tire destruction of that element in its franchise which confers its greatest value.

The supreme court has delivered its final judgment, touching the exclusive right asserted by the complainant company, and, as the defendant’s affidavit admits, has refused to allow a supersedeas to prevent the. defendant company from proceeding with its occupation of the avenue in question. The court of errors and appeal's, which -undoubtedly has the power to protect the subject-matter of the litigation from a change which may defeat its judgment (Doughty v. Somerville Railroad Co., 7 N. J. Eq. (3 Halst.) 634), is not in session and cannot act.

Under these circumstances the complainant company, remediless at law, invokes the aid of this court to prevent a change in the subject of the litigation by one of the litigants, which, if suffered to be accomplished, may make nugatory the judgment of the court of review.

The merits of the litigation between the parties in the suit at law are not involved in the equity asserted in this court by the complainant company, except as they show that there is a pending case, presenting a claim of right worthy of the consideration of a court, which the complainant is diligently prosecuting, involving a subject-matter which will be destroyed if the proposed action of the defendant company is not restrained.

The matter in dispute in the law court is novel, having arisen under a statute passed in 1893, and presents a question of importance, involving the acquirement of the exclusive privilege to occupy a street by a trolley company organized under that statute.

That a court of equit}r may restrain a change of the subject-matter of a litigation pending an appeal was declared by Chancellor Walworth, in Hart v. Mayor of Albany, 3 Paige 380. In that case the learned chancellor had dissolved an injunction which restrained the removal of a floating storehouse, which it was claimed had been placed in Albany basin contrary to an ordinance of that city. An appeal was taken from his decree to the court of errors and appeals. The successful party before the chancellor, proceeded to remove the floating storehouse. The appellant applied to the chancellor for an order restraining the defendants from proceeding under the ordinance, pending an appeal. Chancellor Walworth held that although the appeal from his order dissolving the injunction did not suspend the operation of that order, nor continue the stay, yet in a proper case an injunction ought to go restraining a proceeding by the defendants out of court, the effect of which would be to destroy the subject-matter of the litigation. This decision was put upon the express ground that the granting of such an order would unquestionably be “an original exercise of judicial power over the parties in the cause” (at p. 386). This judgment is cited and commented upon with approval by Chief-Justice Green, delivering the opinion of the court of errors and appeals in the above-cited case of Doughty v. Somerville Railroad Co. (at p. 636).

It is suggested by the defendant that the complainant Corson, under Hinchman v. Paterson Railroad Co., 17 N. J. Eq. (2 C. E. Gr.) 75, has no status to challenge the right of the defendant company to occupy the street, and that his presence in this suit as a complainant is a misjoinder. No demurrer has been filed presenting this question. The defendant, in its affidavit showing cause, deals only with the merits of the complainant’s claim for the relief sought. In the Paterson Railroad Case, ubi supra, Chancellor Green, in terms, declared, regarding the objection that there was a misjoinder: “If this were the only objection, it would not be suffered to stand in the way of the order for an injunction.”

In my view, the complainant company has an independent equity which entitles it to the aid of this court to prevent the defendant company from changing the situation of the subject of the litigation pending the determination of the court of errors and appeals.

No serious loss will be inflicted, upon the defendant company by this restraint. It has not yet constructed its railway on Virginia avenue. It is not presently realizing anything from the use of its railway. There need be no prolonged delay. The court of errors and appeals will shortly be in session. The complainants will be put upon terms to prosecute their writ of error with diligence, bringing the, cause to hearing at this June Term, if the defendant company will join in waiving notice, &c.

• A decree will be advised for a preliminary injunction restraining the defendant company in accordance with the prayer of the bill of complaint, until the decision of the court of errors and appeals on the writ of error taken to review the judgment of the supreme court in the case of People’s Traction Co. et al. v. Atlantic City et al. shall be promulgated.


author: Gkey, Y. C.

text:
    Anna R. Fehling v. Everett C. Goings and C. B. Coles & Sons' Company et al.
    [Filed July 26th, 1904.]
    1. A written notice served upon the owrier by a materialman under section 3 of the Mechanics’ Lien act (P. L. of 1898 p. 538), if it complies with the statute in other respects, is not defective because it omits to state that a previous demand for payment of the sum claimed by the noticing party had been made upon the contractor; nor because served by an attorney or agent of the claimant arid not by the claimant in person; nor because the agent of the claimant who demanded payment from the contractor or gave notice to the owner, was not authorized to act by a written power from the claimant.
    2. Such notices may be efficiently served in any form or by any method which in effect gives the written notice prescribed by the statute.
    3. It is only creditors of the contractor named in the filed contract who are entitled to serve stop notices under section 3 of the Mechanics’ Lien act. Creditors of a sub-contractor have not that privilege.
    4. The United States Bankrupt law of 1898 does not invalidate the right which a claimant acquired by serving a stop notice under section 3 of the Mechanics’ Lien act of this state, although such service may be made within four months next preceding the filing of the petition in bankruptcy. The steps taken under said section 3 are not such assignments as are invalidated by the Bankrupt act, nor are they transfers by a bankrupt to hinder and defraud his creditors.
    On bill of interpleader and claims of interpleading defendants.
    This is an interpleader bill filed by Anna E. Fehling against Everett G. Goings and others.
    The complainant employed the defendant Goings under a written contract to alter and repair her property, known as “The Hotel Vallaire,” in Atlantic City.
    The contract was filed in the Atlantic county clerk’s office.

      The contractor failed to pay the persons who furnished material and did work for him under the contract, and stop notices under the Mechanics’ Lien act were served upon the complainant owner, claiming such large amounts that the sum remaining in the hands of the complainant, due or to become due to the defendant Goings, was insufficient to pay the lien claims in full.
    The complainant files her bill, professing herself to be disinterested between the parties and ready to pay the balance in her hands to whomsoever it should be paid, but declaring that she cannot with safety make the payments until the parties have by interpleading with each other, settled their respecting rights
    A decree of interpleader was allowed to the complainant, whereby she was ordered to deposit in this court the amount named in her bill, the sum of $5,249.75. The sum of $50 counsel fee and the taxed costs of her suit were ordered to be paid therefrom, and it was directed that the defendants should interplead and adjust their several claims in controversy between themselves.
    The cause has come to a hearing upon the respective inter-pleading statements of the defendants as claimants upon the fund.
    Many of the essentials necessary to be proven have been admitted to be true without formal proof by agreements of counsel made during the talcing of the testimony and to be found in the stenographer’s notes of the evidence, or in formal stipulations on file in the cause.
    The defendant Bolte, trustee in bankruptcy of Goings, the contractor, though conceding without proof some of the incidents necessary to sustain the stop notices, required that the claimants should show compliance with the statutory requirements regarding demand upon the contractor and notice to the owner, &c. He claims all of the contract price not. required to pay such claimants as are fully proven to have complied with the requirements of the statute.

      Mr. Willi am-I. Garrison, for Elcck Brothers, Billings, King & Company and Charles H. Blaine.

      Mr. Louis A. Repetto, for Sylvester Leeds.

      Messrs. Godfrey & Godfrey, for Daniel B. Ingersoll.

      Mr. Henry F. Stoclcwell and Mr. Fdivin G. C. Blealdy, for C. B. Coles & Sons’ Company.

      Messrs. Thompson & Cole, for Somers Lumber Company, Somers Brick Company, Gabriel Garrison and the Phoenix Iron Company.

      Mr. William, M. Clevenger, for G. Arthur Bolte, trustee in bankruptcy of E. G. Goings, bankrupt.
   Gkey, Y. C.

The rights of the several claimants will be considered and determined in the order of priority in point of time in which they became fixed.

The notice of Billings, King & Company was served on the owner on July 30th, 1901, claiming the sum of $322.60 under section 3 of the Mechanics’ Lien, statute. P. L. of 1898 p. 538. The sufficiency of this notice, is disputed upon two grounds— first, that the notice served was signed by Billings, King & Company by attorney, while the statute provides that it shall be the duty of the journeyman, laborer or materialman to give the notice. As to this criticism the statute provides that whenever a contractor (in case of contract filed) shall upon demand refuse to pay any person who has furnished material used in the building, or any journeyman, &c., “it shall be the duty of the journeyman and laborer or materialman to give notice in writing to the owner of such refusal.”

The statute does not prescribe that the notice served shall be signed by the journeyman, laborer or materialman who gives it, but only that he shall give notice in writing. The signature of the party noticing is proper to give the writing that verity which such a notice should have, but it is not so essential that its absence would destroy the legal effect of the notice if all the statutory requirements were contained in the writing served.

In fact, in this case, the notice served is thus signed, at the end, “Billings, King & Co., Wm. I. Garrison, Attorney.” The words “Billings, King & Co.” are in manuscript. The words “Wm. I. Garrison, Attorney,” are typewritten. It does not appear that the manuscript signature is not that of Billings, King & Company. The form in which the attorney’s name is appended does not show that he was the. actor. It does not say “Billings, King & Co., by Wm. I. Garrison, their attorney.” If it did, it seems to me that it would still be as it now is, a notice in writing given'by Billings, King & Company, as required by the statute. It appears without dispute that the claimants, Billings, King & Company, did in fact give to the owner the notice in writing above referred to.- This they did by their agent. Service of these notices by the agent of the claimant has always been recognized as a compliance with the terms of the statute. If the present objection is forceful and a “Chinese” performance of the statutory requirements must be rendered, then this service must be made by the claimant ; and if there be half a dozen members of a firm of claimants, by all of them acting at the same time in a body, for the same principle of law which enables one partner to act for the other partners enables an agent to act for his principal.

I am referred to the case of Foster v. Rudderow, 3 Atl. Rep. 694, as authority for the contention that the stop notice required by the statute (section 3) to be given to the owner must be signed by the journeyman, laborer or materialman who gives it. The decision referred to does declare, in its syllabus, that “a written demand made upon the owner by an agent, without any written authority from the principal, giving said agent power to receive the money due, may be properly disregarded by the owner.” The text o'f the report of the case, however, shows that the paper criticised was not the stop notice required' by section 3 to be served upon the owner, but a demand made upon the contractor that he should pay. The decision is therefore inapplicable on the present question whether the stop notice given to the owner is required by section 3 óf the statute to be signed by the noticing claimant.

That judgment is also made the basis of objection to the sufficiency of stop notices served on the owner where the previous demand for payment made upon the contractor was by some attorney-at-law or agent of the claimant, who was not shown to have been appointed agent or attorney of the claimant to demand payment for the contractor by some written authority. This does call up the very question which by the text of the report of the case of Foster v. Rudderow appears to have been decided — that decision was made under the Mechanics’ Lien law as found in Rev. Stat. 1877 p. 668 § 3. The provisions of that act regarding the demand for payment to be made upon the contractor are the same as those in the act presently in force (P. L. of 1898 p. 538 § 3), and are as follows:

“Sec. 3. That whenever any master workman or contractor shall, upon demand, refuse to pay any person who may have furnished materials used in the erection of any such house or other building, or any journeyman or laborer employed by him in the erecting or constructing any building, the money or wages due to him, it shall be the duty of such journeyman, laborer or materialman to give notice in writing to the owner or owners of such building of such refusal and of the amount due to him or them and so demanded, and the owner or owners of such building shall thereupon be authorized to retain,” &c.

It will be observed that the statute does not even specify that the demand upon the contractor for payment shall be made by the claimant, and makes no reference whatever to any requirement that if made by the claimant’s agent the latter’s authority shall be in writing. My impression of the case cited is that in the evidence taken, which does not appear in the report of Foster v. Rudderow, there was a challenge of the authority of the agent of the claimant to make the demand, and the testimony showed that he was not authorized.

On the essential question, it seems to me clear that the preliminary demand upon the contractor for payment may be made by the claimant in person, or by his duly-authorized agent or attorney, appointed either in writing or by parol. In this, case the claimants appear here in court and base their claim upon the demand for payment by their agent upon the contractor. It is therefore manifest that they authorized the demand made.

The notice served by Billings, King & Company was in writing, sufficiently verified by the name of the claimant appended thereto..

The second criticism of the Billings, King & Company notice is, that it does not mention that a demand had been made upon the contractor for the payment of the money claimed by them. The statute does not require notice in writing to be given to the owner that the claimant had demanded payment from the. contractor. It requires only a written notice that the contractor had refused to pay. The object of the statutory provisions is to notify the owners of the contractor's refusal to pay in order that the owner may be required to retain from the contract' price remaining in his hands a sufficient sum to pay the claim of the noticing party. A refusal to pay usually implies a previous demand made upon the party refusing.

The notice of Billings, King & Company sufficiently complies with the requirements of the statute and should be allowed for the sum of $322.60 as the first claim.

The notice of Charles Ii. Blaine was served upon the complainant on September 1st, 1901, to retain $230.

There is sufficient proof that the statutory requirements have been observed, and this notice of Charles H. Blaine is entitled to allowance as the second claim.

The stop notice of the defendant Charles B. Coles & Sons’ Company was twice served, the first time on September 5th, 1901, for the sum of $3,805.18.

The objection to this notice by the trustee in bankruptcy of Goings, the contractor, is that the notice served on Miss Eehling (the owner), though narrating the refusal of Goings (the contractor) to pay the debt, does not state that a demand was made upon him, the same point above overruled on the challenge of the Billings claim. A second notice was served by the Coles company upon Miss Eehling, the owner, on December 17th, 1901, for the same sum, which recites a previous demand upon Goings for payment. The latter notice was served because there was some question whether the previous notice served on September 5th was in the proper form.

The first notice served for Coles & Sons’ Company, on September 5th, 1901, complied with the terms of the statute, and the proof here made shows that the sum of $3,805.18 should be allowed that company as the third claim.

The next stop notice was served by Daniel B. Ingersoll, on November 13th, 1901, upon the owner*, to retain the sum of $153.

This notice conforms to the statutory requirements, and its supporting proofs entitle Mr. Ingersoll to the allowance of $153. as the fourth claim on the fund.

The Coles & Sons’ Company, for assurance of their claim, served their second notice upon the owner on December 13th, 1901. This notice specifically states that a demand had been made on the contractor. I have heretofore held that the statute does not require the notice to the owner to state that a demand had been made on the contractor in order to make the stop notice effective. If the first notice of Coles & Sons’ Company was for any reason ineffectual and failed to retain the money due them, this notice of December 13th, 1901, would entitle them to be paid as of the latter date.

The next stop notice was served on January 25th, 1902, by the Somers Lumber Company, for the sum of $375. By consent, this claim was proved by filing an affidavit, which has been marked Exhibit Somers No. 1, and sufficiently proves demand and refusal and legal notice to the owner to retain. This entitles the Somers Lumber Company to the fifth claim, to the amount of $375.

The Somers Brick Company, in like maimer, made proof of a notice served on the same day (January 25th, 1902), which entitles that company to the sixth claim, to the amount of $10.

A stop'notice is produced by the defendants Fleck Brothers, claiming the sum of $475. There is proof of the time (about July 1st, 1901) when demand for payment of this sum was made upon Goings, the contractor, and of his refusal to pay it, but no evidence is submitted to show that it was in fact served on the owner nor when any such service was made. The stop notice offered in evidence has no date.

It is not a sufficient compliance with section 3 of the statute to prove only that payment was demanded and refused to be made by the contractor, and then produce a stop notice addressed to the owner, without showing by evidence that such notice was ever served upon him. Eor want of proof that notice in writing was given to- the owner, this claim must be rejected.

Another objection which would prevent the allowance of this claim is that the evidence shows that the materials for the value of which Elect Brothers claim payment of the $475 were not furnished to Mr. Goings, the contractor, but to Messrs. Sheppard & Hackney, sub-contractors, who had been employed by Mr. Goings. The remedy provided by the third section extends only to creditors of the contractor named in the filed contracts. Carlisle v. Knapp, 51 N. J. Law (22 Vr.) 332 (Court of Errors and Appeals).

By special filed stipulation, the trustee defendant admits that the stop notices of the- defendants Gabriel Garrison and the Phoenix Iron Company were served on the owner on January 27th, 1902, subject to the objections raised by him regarding their legalitjc

These objections have been determined unfavorably to the contentions of the trustee in the previous discussions of the claim of Billings, King & Company. The other objections will be hereinafter considered, as the theory upon which they rest affects all stop notices served after September 27th, 1901- — that is, within a period of four months next preceding the filing of the petition in bankruptcy against Goings, the contractor.

The stop notice of Gabriel Garrison was served on January 25th, 1902, claiming $186.03. The effect of -all the proofs and admissions regarding this claim show compliance with the statutory requirements. It is allowed as the seventh claim entitled to payment from the fund, $186.03.

The stop notice of the Phoenix Iron Company, served on-January 27th, 1902, is in the same situation and is allowed as the eighth claim, of $93.10.

The stop notice of S}dvester Leeds is mentioned in the bill of complaint and is supported by a statement of claim filed in the cause. The testimony shows that a demand for payment of this claim was made upon Goings, the contractor, and that he refused to pay it, but no proof is made that any written notice of that refusal was given to Mrs. Fehling, requiring her to retain the amount. For this reason this claim is not allowed.

Sheppard & Hackney file a statement, claiming $897.55, as noticed on September 1st, 1901, to be retained by the owner. Ho proof whatever was made of compliance by the claimants with the requirements of the statute.

Other stop notices appear to have been served, and the claimants serving them have been made defendants in this suit, but they have not interpleaded by filing answer or statement of claim in this cause and have submitted no proofs in support of their claims. For want of presentation of statement and proofs in support of such claims they must be declared not to be entitled to any portion of the fund in court.

Objection is taken by the defendant Bolte, trustee in bankruptcy of the contractor, Goings, to the allowance of any claims which are based on stop notices served after September 27th, 1901, because it is claimed they are avoided by the operation of the United States Bankruptcy law.

This argument is based on the following theory: The stipulation of the parties admits that the building contracted to be built, the “Hotel Vallaire,” was agreed to be completed on August 1st, 1901. The contract juescribed in these words how' the last installment of the contract price shall be paid: “Balance in thirty days after the completion of this contract.” It is admitted that the building was' completed on August 1st, 1901. Thirty days after that time, namely, on August '31st, 1901, the balance of the contract price (which is the fund in court in this suit) became payable 'to the contractor. The defendant Bolte, trustee in bankruptcy of the contractor, Goings, while he admits that all claimants who served stop notices on the owner before August 31st, 1901, have perfected their liens (Slingerland v. Binns, 56 N. J. Eq. (11 Dick.) 415), insists that all the stop notices which were served after that date created no lien on the contract price (Kreulz v. Cramer, 64 N. J. Eq. (19 Dick.) 648) and operated merely as assignments pro tanto of the portion of that price remaining in the hands of the owner (Anderson v. Huff, 49 N. J. Eq. (4 Dick.) 349); that such assignments are voidable within the operation of section 67 of the United States Bankrupt law (U. S. Bankruptcy act, 1898) when made within four months prior to the filing of the petition against the bankrupt; that it is an admitted fact in this cause that Goings, the contractor, was adjudicated a bankrupt on January 27th, 1902, by the United States district court of the district of New Jersey. The defendant trustee in bankruptcy therefore insists that all claims depending on stop notices served-subsequently to September 27th, 1901 (which was four months prior to the filing of Goings’ petition in bankruptcy), must be declared void, and that the moneys which would have been paid to such noticing claimants if their claims had been valid, must be paid to the trustee in bankruptcy of Goings, the contractor, as part of the assets of the bankrupt’s estate.

It will be found, I think, upon examination that the assignments which are invalidated by the Bankrupt act are transfers of his property, “made or given by the person adjudged a bankrupt.” This appears in the express words of the Bankrupt act (section 67, paragraph 2). It plainly means to affect only such assignments or dispositions of his estate as the bankrupt himself may voluntarily make, for by the express words of the Bankrupt act it is applicable only to such assignments as the bankrupt may make “with intent and purpose on his part to hinder, delay or defraud his creditors,” &c. '

The stop noticing claimant, under section 3 of the Mechanics’ Lien law, acts without any procurement, permission or action of the contractor, the bankrupt. The right or opportunity to serve the stop notice on ihc owner and thus compel the retention of the contract price from the contractor (the bankrupt) is conferred not by the contractor but by the law. It may be, and generally is, exercised against the wishes and intent of the contractor. He is powerless to create, limit or control the right of the workman or materialman who serves a stop notice.

Although the word “assignment” is used in our decisions to define the effect of the service of the stop notice on the owner upon the contract price, the transaction is not in truth an “assignment” in the sense that the contractor, who is entitled to the contract price, transfers the portion of it affected by the stop notice. This plainly appears in the discussion of the operation of these stop notices in the case of Wightman v. Brennan; 26 N. J. Eq. (11 C. E. Gr.) 491, where Vice-Chancellor Van Eleet used the following language:

“It is insisted by the demurrants that the effect of the notice is limited to the creation or raising of a right of action, and does not transfer any right of the contractor or give the workman or materialman any right whatever to the debt due from the owner to the contractor. This view is manifestly unsound. It can only be supported on the theory that it was the legislative design to make one man pay another’s debts. Ho such purpose can be imputed to the law. On the contrary, I think the purpose most conspicuously expressed on its face is to work a -substitution or subrogation of creditor rights; in other words, to put the workman or materialman, whenever the condition of affairs contemplated by the statute exists, exactly in the position of the contractor, so that he can invoke not only the contractor’s remedy, but also his rights, against the owner. This is the effect imputed to the notice by the supreme court in Reeve v. Elmendorf. The chief-justice, speaking for the court, says: ‘Upon

notice given, the workman or materialman, to the extent of his demand, takes the place of the contractor.’ A payment by the owner to a workman or materialman, pursuant to notice, is a payment to the contractor. It has that effect in spite of the will of the contractor. My judgment, therefore, is that the notice, by force of the statute, works an assignment pro tanto of the debt due to the contractor. This is the effect given to it under the New York statute. Rudd v. Davis, 1 Hill 278; Collins v. Ellis, 21 Wend. 404.”

The right to have the transfer of the portion of the contract price noticed to be retained is given, not by the contractor, but by the law. In consideration of the existence of that right, the workmen and materialmen have accredited the contractor and enabled him to increase his assets by performing his contract. If he becomes a bankrupt after that right has been exercised, neither the letter nor the spirit of the Bankrupt act includes, among those preferences which may be vacated, as made within four months next before the filing of the petition, the interest which the stop-noticing claimant has acquired in the contract price by serving his stop notice under section 3 of the Mechanics5 Lien law. In re Emslie, 102 Fed. Rep. 292.

Neither is the service of a stop notice, under section 3 of our Lien act, a “legal proceeding,55 under the meaning of the Bankrupt act, in section 67, paragraph f, which makes voidable all liens obtained through “legal proceedings.55 In the Emslie Case, Judge Wallace defined “legal proceedings,55 referred to by the Bankrupt act, to be a “proceeding in a court of justice by which a party pursues a remedy which the law affords him.55

In my view, the objection that the United States Bankrupt law invalidates those claims which are based upon stop notices served after September 27th, 1901, on the ground that they are assignments within the operation of that law, cannot be sustained.

The fund in court should be paid out to the noticing claimants, as above indicated, with their costs of this suit to be allowed. If anything remains thereafter, it should be paid to the defendant Bolte, trustee in bankruptcy of Goings, the contractor.

A decree will be. advised accordingly.


text:
    Mahlon F. Ivins, administrator, &c., of R. C. Mason, deceased, v. C. Albert Jacob, trading as Jacob Brothers.
    [Filed September 20th, 1904.]
    1. Complainant, administrator of M., sued to enjoin defendant from collecting the rentals of pianos or interfering with complainant’s collection thereof. M. had rented the pianos and then assigned the leases to defendant, 'either as collateral for debts or because defendant owned the pianos. A certain percentage of the amount collected on the leases was to be allowed M. Defendant employed M. to collect the rentals, but no continuing contract obliging him to continue to employ M.’s administrator to make the collection was shown. Defendant was financially responsible. —Keld, that defendant’s right to make the collections was not taken away by the fact that M. had1, or that complainant as his administrator had, a right to a commission on the amount collected, so that a preliminary injunction, as a prerequisite to which complainant must show that his right was reasonably certain, and that if the restraint was not granted his injury would be irreparable, would be denied.
    2. The matter as to which complainant administrator sought redress being an alleged injury to him in the conduct of the business incident to settlement of intestate’s estate, and not an injury to intestate himself in his lifetime, costs* would be allowed against him, he being unsuccessful.'
    The complainant is the administrator, &c., of Eichard O. Mason. In his lifetime Mason was engaged in the business of selling or renting pianos, with a privilege, after a certain sum of rentals had been paid, to purchase the instrument. In each case a lease for the pianos in the name of Mason as lessor was given and accepted by the person who rented it, and this lease was immediately assigned by Mason to the defendant. Several hundred pianos were thus disposed of by Mason. A certain percentage of the total price paid was to be allowed him.
    The complainant insists that Mason, in his lifetime, was in fact the owner of the pianos and that he made the leases as such owner.
    The defendant, by very full affidavits and proofs, denies that the decedent owned the pianos; on the contrary, the defendant contends that the pianos were consigned to the decedent, Mason, for the purpose of sale only, the title thereto remaining in the defendant; that the decedent, Mason, was in respect to the pianos thus sent to him, a mere salesman for the defendant, assigning the leases given for pianos, as fast as they were rented, back to the defendant, who employed the decedent to collect the rentals, allowing him a commission on the sums collected.
    It is not denied that the leases have been assigned to the defendant, and that he has them in possession, but the complainant insists that the defendant’s holding is only as collateral security for certain debts owing by the decedent, Mason, to the defendant.
    The decedent, Mason, by defendant’s direction, was engaged in collecting these rentals at the time of his death. After that event the complainant, as administrator of Mason, for some little time assigned to the defendant leases for pianos rented and claimed the right to go on collecting the installments of rent as they came to be due on all the leases held by defendant. Disputes arose between the complainant and the defendant, and the latter forbade the complainant to collect any more rentals and notified the lessees of the pianos not to pay any further rentals to complainant.
    Upon this the complainant has filed this bill, seeking to restrain the defendant from collecting these rentals or interfering with the complainant’s collection of the same and for a receiver to take, receive and collect them if necessary.
    An order to show cause has been allowed, and on the coming in of that order the defendant has filed several affidavits. On these proofs annexed to the bill and one additional affidavit, and on these affidavits submitted by defendant, this matter has been heard.

      Mr. Henry F. Stockwell, Mr. J\ Willard Morgan and Mr. Edward A. Armstrong,'for the complainant.

      Messrs. Wilson, Carr & Stackhouse (with whom was Mr. Lovjensiein, of the New York, bar), for the defendant.
   Grey, V. C.

This is an application for a preliminary injunction upon proofs which are directly denied by the defendant’s affidavits. It is admitted that the defendant holds the leases in question by valid assignments, made to him either as owner of the pianos leased, as he claims, or as collateral security for debts owed to him, as the defendant claims. In either situation the defendant appears to have the right to collect the rentals himself, or to employ whom he may choose to collect them for him.

The bill and affidavits show that during the decedent’s, Mason’s, life the defendant employed Mason to collect the rentals, but there is ho showing of any continuing contract obliging the defendant to continue to employ the complainant, administrator of the decedent, Mason, to collect the rentals. Nor does-the fact that Mason, in his lifetime, had, or the complainant, as his administrator, after his death may have, a right to a commission on the amount of rents to be collected, take away from the defendant the right to make the collections, and this is true whether the defendant holds the leases either as absolute owner or as pledgee of them.

There is no allegation that the defendant is insolvent, but there is proof that he is amply able to respond for any moneys which may be found due from him to the complainant.

In an application for a preliminary injunction it is upon the complainant to show that his right is reasonably certain, and also that if the restraint sought be not granted his injury will be irreparable. Camden Horse Railroad Co. v. Citizens’ Coach Co., 29 N. J. Eq. (2 Stew.) 299; Hagerty v. Lee, 45 N. J. Eq. (18 Stew.) 255. There is in this case no exhibition of either of these conditions. The rule to show cause and restraint ad interim should be dismissed.

Some question is raised whether costs should be allowed to the defendant against the complainant, who brings this suit as an administrator.

The rule which saves an administrator from being obliged to pay costs, if unsuccessful, is limited to that class of cases in which the administrator brings suit to assert some right which belonged to his intestate in his lifetime, or to redress some wrong done to the intestate in his lifetime.

Nothing in the proofs shows that the decedent, Mason, had a right to collect the defendant’s rentals any longer than the defendant chose to employ him to do so.

No dispute appears to have arisen in the lifetime of the decedent, Mason, touching the collecting of these rentals. The alleged wrong is claimed to have been done only since the decedent, Mason’s, death by the defendant’s interference with the complainant’s collecting of the rentals.

The proofs show that for some time after the death of the intestate the complainant made some collections of the rentals with'the defendant’s assent, and assigned several of the leases to the defendant, but there is no showing of any contractual obligation upon the defendant to allow the complainant to make these collections. The dispute has arisen because the defendant has now himself undertaken the collection of the moneys coming due on the leases and has forbidden the complainant to make them.

The matter now under consideration for which the complainant seeks redress is thus shown to be an alleged injury to the complainant in the conduct of the business incident to the settlement of his intestate’s estate and not an injury done to the intestate himself in his lifetime.

Under such a showing the defendant is, I think, entitled to costs when he successfully resists the complainant’s attack. I will advise such an order.


author: Stevenson, V. C.

text:
    Mary F. Sullivan v. Frederick T. Browning et al.
    [Filed May 26th, 1904.]
    1. Though ordinarily an allegation in a bill that a roadway is a private right of way, and not a public street, would be deemed an allegation of fact and admitted by a demurrer, yet where a bill alleges facts which show that the roadway is a public highway subjected to a public easement of 'travel, an averment that it is not a public highway may be taken as' a mere statement ■ of an erroneous legal conclusion not admitted by demurrer.
    2. The construction by a landowner of structures causing the surface water to flow onto adjoining land, whereby the total volume of surface water flowing over such land is so increased as to cause damage, gives- the owner of such land no right of action.
    3. Under the facts — Held, that the complainant’s case rested upon an alleged legal right which has never been recognized in New Jersey, and which would be an exception to a well-settled rule of law, and that therefore the complainant must establish her doubtful legal right at law before the same can be enforced by an injunction in this court.
    On demurrer.

      Messrs. Howe & Dcwi's, for the demurrants.

      Mr. W. Bradford Smith, for the complainant.
   Stevenson, V. C.

The hill alleges that the complainant owns a tract of land in the town of West Orange, “extending from the easterly side of Glen avenue, in Llewellyn Park, in an -easterly direction to the westerly line of Eagle Rock road,” and in 1898

“laid out a street or road over and across her said lands extending-the entire length thereof from Glen avenue to said Eagle .Kock road, and caused the same to be worked and graded and a map to be made of said lands showing said street or road, whereon building lots were delineated fronting upon said street or road, which said street or road was designated upon said map and has since been known as Llewellyn avenue; and that since the making of said map the complainant has sold to various persons as many as twenty-two building lots upon either side of said Llewllyn avenue, having a frontage of twenty-five feet or more each upon said avenue, upon which lots a number of the owners thereof have constructed as many as sixteen dwelling-houses.”

The length, of Llewellyn avenue, from Glen avenue to said Eagle Rock road, is about one thousand four hundred feet. All of the lands fronting upon the northerly side of Llewellyn avenue are owned by the complainant and her grantees. The lands upon the southerly side of Llewellyn avenue, for a distance of five hundred and sixty feet from Eagle Rock road, are also' owned by the complainant and her grantees, and the rest of the frontage on the southerly side-of Llewellyn avenue, about eight hundred and fifty feet in length, is owned by the three defendants, devisees of Ross C. Browning, deceased, and was never owned by the complainant. The complainant is still the ownei of large portions of the lands on each side'of Llewellyn avenue.

The land over which Llewellyn-avenue is laid is about ninety-' two feet lower at Eagle Rock road than at Glen avenue, and the steepest grade is on the westerly portion, in front of the land of the defendants Browning. 'The general slope of the lands lying between Glen avenue and Eagle Rock road, through which Llewellyn avenue is laid out, and of the lands southerly therefrom, is in a southeasterly direction. The surface water from lands immediately south of Llewellyn avenue and from lands west of Glen avenue, if undiverted, flows in a southeasterly direction, and reaches Eagle Rock road or its continuation several hundred feet south of Llewellyn avenue. The complainant' has resided upon her lands for more than thirty years last past, and during all that period the surface water has followed the natural slope of the land in a southeasterly direction, over the land of the Brownings and away from the lands of the complainant. Since Llewellyn avenue was laid out it has not been until recently, and' from the slope of the lands cannot be "naturally, subject to the flow of .surface water from the lands of the defendants.

The said Ross C. Browning, now deceased, in or about 1896, conveyed to the defendant Thomas N. Foster a parcel of land fronting upon the easterly side of Glen avenue, the northerly line of which parcel “is about two hundred and eighty-four feet in length, and runs parallel, or nearly so, with the southerly line of Llewellyn avenue, and about fifty feet southerly therefrom.” Ross G. Browning and Foster made an agreement, November 26th, 1896, to the effect that the strip of land belonging to Ross C. Browning north of the parcel conveyed to Foster “was to be used for a roadway to- lands to the east thereof,” or if not used for such purpose should be offered to said Foster for purchase. This agreement was recorded in the Essex county register’s office. It will not be necessarj' to set forth in detail the. relations between the defendants, the three Brownings and the defendant Foster, inasmuch as the case will be disposed of without reference to the above-mentioned agreement, and in the same way as if the Brownings owned the entire Foster tract.

The injury complained of consists in the construction by the defendants on their -land of “bunkers,” which are described as “artificially constructed mounds of earth raised above the elevation' of the surrounding land at a sufficient height to divert the flow of surface water.” These bunkers run in a direction so that if continued to said Llewellyn avenue +he3r would strike the same at an angle of about fortj^-five degrees, so that the wrnter intercepted by them is turned from its natural flow, in a southeaster^ direction, over-lands of the said Browning- and of said Foster, and is diverted in a northeasterly direction, towards and upon said Llewellyn avenue.'

There are four of these bunkers located on the land of the defendants, which have the effect to divert the surface water, as above stated, and cause it to flow into Llewellyn avenue. The damage complained of arises wholly from the increase in the flowage of water in and along Llewellyn avenue in times of rain. While before the construction of these bunkers the “flow'- of surface water down said' Ll-ewre!lyn avenue vras never, in the times of heaviest rains, or at any other time, sufficient to v'ash out or.injure the surface of LlewAllyn avenue,, or the gutters or walks thereof, or the property” of the complainant fronting on Llewellyn avenue, since the construction of the bunkers “vast and unusual quantities of surface water diverted by said bunkers flow down the said Llewellyn avenue and undermine and wash away and injure Llewellyn avenue and the gutters and walks thereof, and wash over and injure the property” of the complainant “fronting thereon.”

The bill alleges that “said Llewellyn avenue is not a public street and has not been acquired by the said town of West Orange, and the title to the land within the lines of said avenue is vested” in the complainant and her grantees to the centre line of the avenue, subject to the easement of the complainant and her grantees “to use the same as a street for ingress and egress,” and that no’ person except the complainant and her grantees “has any right, interest, easement or control in or over the lands in said avenue.”

1. I think it is a serious question whether, upon this demurrer, Llewellyn avenue must not be considered as a public highway, unaccepted by the public authorities but subjected to the public easement of travel. The facts are abundantly stated at the commencement of the bill of complaint, from which the legal inference must be drawn that Llewellyn avenue is a public street in the sense above stated. Subsequently the bill alleges that Llewellyn avenue is not a public street, and has not been acquired'by the town of West Orange. Ho explanation is offered of the facts first set forth, which fix the character of this avenue as a public highway. In my opinion, there are strong grounds for holding that, taking this bill as a whole, the allegation that Llewellyn avenue is not a public street must be deemed a mere statement of a legal conclusion and an erroneous conclusion based upon the idea that before the street could be subjected to the public easement it must in some way have been “acquired by the said town of West Orange.” Ordinarily, an allegation in the bill of complaint that a roadway was merely a private right of way and not a public street, would be deemed an allegation of fact, and would be admitted to be true by a demurrer, but when a bill alleges facts which show that the roadway is a public highway in the sense of being subjected to the public easement of travel, a bald averment that the roadway is not a public highway may well be taken as a mere statement of an erroneous legal conclusion, and, therefore, is not under the old rule of equity pleading admitted to be true by a demurrer.

2. The bill does not show that the operations of the defendants on their own land have the eifect to divert into Llewellyn avenue any waters which do not naturally fall or collect on the defendants’ land. • It is true that the defendants, have constructed “a brick and stone culvert upon the easterly side of Glen avenue, a few feet south of said Llewellyn avenue, connected with, said culvert being a four-inch drain pipe through which to discharge the water from said culvert,” but it does not appear, nor can it properly, on this argument, be inferred that the culvert is employed to transmit the surface water from lands lying westerly of the land of the defendants Browning. If it might be inferred that this culvert probably extends under and through Glen avenue, so as to collect and lead water from the westerly side of Glen avenue onto the lands of the defendants, from which land it is then diverted by the bunkers into Llewellyn avenue, certain questions would be presented for discussion which now need not be considered. I have no right, in the consideration of this case, to assume that any surface water is diverted into Llewellyn avenue by the defendants which does not naturally fall upon or flow into the defendants’ land.

3. Eo claim is made that the defendants use their land as a reservoir to collect a large quantity of surface water which they subsequently, discharge in a body or in unreasonable amounts upon the land of the complainant. It is the surface water as it falls and as it flows which the defendants are charged with diverting.

4. Eo damage is complained of resulting from the immediate discharge of surface water upon and against the complainant’s land. It is not pretended that these bunkers condense the surface water which otherwise would flow in a wide .sheet into a narrow channel and thus cause the same to be spouted into the land of the complainant so as to wash away the gutters and walk? of Llewellyn avenue.

For all that appears in this bill precisely .the same damage of which the bill complains would be caused if instead of maintaining these bunkers the defendants should fill in their land and grade it toward Llewellyn avenue and thereby cause the entire surface water naturally falling upon or flowing into it to drain off into Llewellyn avenue; in such a case apparently the increased flowage in the gutters of Llewellyn avenue of which the complainant complains would produce the very damage described in the bill.

5. Taking the case as favorably for the complainant as it is possible to do upon this demurrer, even allowing that Llewellyn avenue must be deemed not to be a public street, I think the grievance of the complainant is shown to be a. clear case of damnum absque injuria.

The damage complained of is alleged to be caused by a diversion of surface water effected by the defendants on their own land, by which such water which formerly ran off in one direction is made to run off in another. It is unnecessary to discuss the large number of cases dealing with the right of the occupier of land to get rid of surface water hosiis communis as best as he can. The decisions are somewhat conflicting. No doubt the more recent decisions have tended to qualify the broader definitions of the earlier cases of the right of the landowner to deal, with surface water in any way he may see fit to adopt. Probably in the future further modifications of this right may be established. But in this case, in my judgment, there are no facts presented which bring it within any recognized exception to the well-settled general rule.

In Jessup v. Bamford Brothers’ Co., 66 N. J. Law (37 Vr.) 641, Chief-Justice Gummere quotes with approval the definition of the right of the landowner to deal with surface water-laid down in the leading case of Gannon v. Hargadon, 10 Allen 106. Part of this definition is as follows: “Nor is it at all material * * * whether a party obstructs or changes the direction and flow of surface water by preventing it from coming within the limits of his land or by erecting barriers, or changing the level of the soil so as to turn it off .in a new course after it has come within his boundaries.”

The present case, in my opinion, comes directly within the principles laid down in Jessup v. Bamford Brothers’ Co. and the other decisions cited in the majority opinion of ’the court of errors and appeals in that case, nor can I find anything in the dissenting opinion filed by the chancellor, in which four other members of the court concurred, which in any way tends to help out the complainant in this case. This dissenting opinion is based upon a view of the facts which under no possibility could be entertained in regard to the facts of this case. The opinion points out that the occupier of land cannot “collect the surface water and discharge it in a collected flow in unusual quantities or upon an unusual place on the adjoining land;” it further sets forth, as facts proved in the case, that the building of the defendant was so constructed as to dam up the surface water and discharge it through a small opening in the wall over the sidewalk so as to cause in winter a dangerous accumulation of ice as a natural result. The plaintiff in the case sued for damages caused by this dangerous condition of the highway. The learned chancellor states that the case is governed by the same principle which would be applicable if the defendants had dammed up the surface water by their wall and then discharged the same through a pipe “in sufficient volume to wash away the sidewalk and gully the street” and thereby create a public nuisance. As I have already pointed out in this present case, there is not the slightest pretence that the damage to the complainant’s property, either in Llewellyn avenue or along its border, is caused directly by the discharge of surface water from the complainant’s land. The complainant’s damage is caused by the fact that the defendants’ operations on their land have made the total' volume of surface water flowing down Llewellyn avenue in times of rain greater than it formerly was. It is the combined surface water, including both what the- defendants have diverted into this street and what naturally flows into the street from other lands, which causes the damage complained of.

6. If there is any error in holding that the law of New Jersey, as it is settled to-day, fully justifies the defendants in dealing with the surface water on their property in the manner complained of in the complainant’s bill, it seems to me to be entirely safe to fall back upon the conclusion that at any rate the complainant’s right is not clear, so clear as to justify this court in granting an injunction. The leading cases on this subject are collected in Stew. Dig. 620 § 13 et seq. and supplement, p. 350 § 6 et seq.

No doubt in these days caution should be observed not to extend the principle laid down and illustrated in the cases above referred to. Where a complainant has a right to equitable remedies, if his legal rights have been invaded, the more modern view is that he ought not to be turned out of a court of equity and compelled to resort first to a court of law for the establishment of his legal rights and then invited back into the court of equity in order to obtain the only remedies which are valuable and effectual in his case.

It is the duty of this court, however, to apply the perfectly well-settled principles of the remedial system which is established in this state without regard to what may or may not be done in other jurisdictions. The complainant practically complains of a nuisance resulting from certain operations of the defendants on their own land, affecting the flowage of surface water. Upon any possible view of the facts presented by the bill it seems to me that the complainant is asserting a legal right which has never been recognized in this state, or so far as appears from the researches of counsel, indicated by their briefs, in any American or English decisions. This alleged legal right, moreover, if it is ever recognized in this state, must be recognized as an exception to a well-settled general rule. Plainly, the complainant, under our present judicial system, must first establish her alleged legal right in a court of law before it can be enforced by an injunction in this court.

The demurrer will be sustained.