text:
    George S. Blake et al. v. Blake & Knowles Steam Pipe Works.
    [Submitted January 25th, 1915.
    Decided February 24th, 1915.]
    1. In a suit to regulate the affairs of a corporation whose share capital consists o'f preferred and common stock, two-thirds common and one-third preferred, each share being of the same par value, a receiver will not be appointed upon the application of the complainants who constitute a portion of the preferred stockholders, for the sole purpose of defending a suit threatened to be brought against the corporation defendant by the receivers of another corporation owning the whole of the common stock and a portion of the preferred stock of the defendant corporation, to compel the payment of unpaid dividends declared upon the common stock and credited upon its book, but claimed to be illegal by the complainants, notwithstanding the allegation of the bill of complainant that the defendant corporation cannot be trusted with the defence, for the reason that it is wholly under the control of said receivers, who thus represent both sides of the controversy, leaving no independent person to look after the interest of the preferred shareholders.
    2. It is an established principle that the defence of a suit shall be carried by tire real party in interest and not by one who is a defendant, but is in a position to have more interest or leaning in favor of the complainant than of his cestui que trust.

    On motion for the appointment of a receiver.

      Mr. Robert H. McCarter and Mr. Abraham Benedict (of the New York bar), for the motion.

      Mr. John R. Hardin and Mr. Chauncey G. Parker, for the defendant.
   Howell, V. C.

The bill in this case is filed to regulate the affairs of the Blake & Knowles Steam Pipe Works, a New Jersey corporation. The complainants are the holders of substantial amounts of the company's preferred stock. It has outstanding ten thousand shares of eight per cent, cumulative preferred stock of the par value of $48.50 per share, and twenty thousand shares of common stock of the same par value, making a total of share capital of both classes of $1,455,000 at par. Some years ago the whole of the common stock, and some portion of the preferred stock, became the property of the International Steam Pump Company, likewise a New Jersey corporation. On August 26th, 1914, C. Philip Coleman and Grayson M. P. Murphy were appointed receivers of the International company on a creditors’ bill filed by William W. Conley and others, complainants, in the district court of the United States for the southern district of New York; and on September 2d, 1914, the same persons were appointed receivers of the property of the same company, by the same court, in a suit brought by the Guaranty Trust Company of New York, as trustee, to foreclose a mortgage held by it on the property of the International company to secure, an issue of bonds; and I am informed by counsel that Gilbert Collins has been appointed receiver in this 'jurisdiction. The stock of the Blake & Knowles company, which was held by the International company, has thus come into the possession and under the control of the said receivers, and by virtue thereof said receivers are able to control the business and policy of the Blake & Knowles company. The bill likewise sets out that some five or six years ago the International company, then in control of the affairs of the Blake & Knowles company, induced the directors to declare dividends on the common stock of the Blake & Knowles company. Such dividends were declared, lmt, inasmuch as the Blake & Knowles company had no actual cash with which to pay them, the same verc credited on its books to the account of the International company, and remain there at the present time as a debt or obligation of the Blake & Knowles company to the International company.

This indebtedness, together with some small items, representing goods sold and delivered, being a balance of a running account between the two companies, amounted, with interest, to upwards of $1,000,000, on account of which $300,000 in cash and property has been paid, leaving a balance claimed by the receivers of the International company from the Blake & Knowles company of over $800,000. There are other items of complaint, but, for the purposes of this motion, it will only be necessary to consider the fact that the books of the Blake & Knowles company show that it owes this large sum to the International company or its receivers. The bill alleges that the books of the Blake & Knowles company, and its accounts thereon, have been manipulated so as to show an apparent surplus out of which dividends could be paid, and that, as a matter of fact, the surplus appearing on the books was created by such manipulation, and never did, in fact, exist; and it further alleges that the receivers of the International company are about to bring suit against the Blake & Knowles company to recover the amount of this account, with interest, and that as the parties stand at the present lime, the Blake & Knowles company cannot be trusted with the defence, for the reason that it is wholly under the control of the receivers of the International, who thus, according to the allegations of the bill, represent both sides of the controversy, leaving no independent person to look after the interests of the preferred shareholders, whose shares aggregate one-third of the whole slock capital of the corporation. The prayer is that the Blake & Knowles company may be dissolved and its assets applied to Ihe payment of its debts, and its surplus distributed among its stockholders according to their respective rights; that a receiver may be appointed to carry on the business of the Blake & Knowles company independently of the control of the International company, and restraining the Blake & Knowles company from interfering with the possession or control of such receiver, and from disposing of or otherwise interfering with the property or assets of the said company, and for further relief.

The application now is for the appointment of a receiver, whose duty it will be to defend the threatened suit, and nothing else. I am satisfied from the evidence submitted on both sides that there exists a real controversy which cannot be worked out in the present motion, but which ought to be tried out on final hearing where both parties can have the privileges of subpoenaing witnesses and of cross-examining the adverse ones. I think, likewise, that there is merit in the position taken by the complainants that the defence ought not to be entrusted to the directors of the Blake & Knowles company alone, for the reason alleged in the bill, viz., that they are under the control of the International company and its receivers, and I conceive it to be the duty of the court, in case its power is properly invoked, to do what can lawfully be done toward obtaining a fair and open trial of the issues which may be raised by the pleading in the anticipated action.

The point is not without precedent in our own state. In Melick v. Melick, 17 N. J. Eq. 156, the principle is illustrated by Chancellor Creen. In that case a bill was filed by an infant child by his next friend against his father in his capacity as executor to recover a gift causa mortis alleged to have been made by the father’s testator to the complainant. The residuary legatee moved to be admitted to defend the suit. The chancellor says: “The residuary legatee asks that she may be admitted in person to defend the right which in ordinary cases the law entrusts to the care of the executor, on the ground that the executor is disqualified by his situation from discharging his duty in that behalf. She is clearly entitled to that privilege. It would be a reproach to the administration of justice if the law were otherwise. It is the constant practice in courts of law to permit the party beneficially interested to conduct or defend a suit in.the name of the party to the record who has the legal right and to prevent all interference by the latter with the just rights of the former.” (Citing cases.) The order was that unless the complainant would amend his bill by bringing in the residuary legatee she might be permitted to appear and answer the bill in its present form and make such defence as she might be advised.

The principle invoked is that the defence to an action shall be carried on by the real party in interest and not by one who is a defendant, but is in a position to have more interest or leaning in favor of the complainant than of his cestui que. trust.

The appointment of a receiver for the sole purpose of interposing a defence strikes me as an anomalous proceeding and one which has no precedent in this jurisdiction, and I am unable to reconcile 'such a course with the doctrines which have heretofore prevailed in this state, touching the powers and duties of receivers and the reasons for which they are appointed. Circumstances which can easily be imagined may arise in case of making such an appointment which would cause great embarrassment to the parties to the cause, and if the action should be an action ut law', and brought in the Stale of New York, it might be seriously questioned whether interstate comity -would be extended to such a limited receivership.

I do not think that the cases of Hazzard v. Credit Mobiler, Fed. Cas. 6289, and Steele v. United Fruit Co., 190 Fed. Rep. 631, are authority for the position now being urged on behalf of the complainants, and I am therefore of tire opinion that it would be very unwise to appoint a receiver for the purpose proposed. Nor do I see how a receiver could be appointed at the present time for any purpose.

Either the suit is prematurely brought or else the bill lacks allegations to make it fit into the present state of the controversy. The complainants pray the immediate appointment of a receiver whose sole authority will be to defend a suit which has not yet been brought. This is an anticipation of a litigation which may never be instituted. If, on the other hand, the bill were a bill for an accounting and an ascertainment at the present time of the rights of the parties, there would seem to be no reason why a suit of that nature could not be prosecuted at the present time. I see serious objections to anticipating the action of the receivers of the International company by any course of practice that has been suggested; but I see no reason -why the complainant should not now bring a suit for ah accounting, or amend the present bill into one for an accounting which could be proceeded with immediately.

The result is that the motion as framed must be denied, but leave will be given to the complainants to amend their bill in such manner as they may be advised, and to renew their motion for an order to maintain the status quo until the final hearing.


source: Caselaw Access Project

author: Howell, V. C.

license: Public Domain

text:
    Wendell Andreas v. Hattie Andreas.
    [Submitted February 10th, 1915.
    Decided February 15th, 1915.]
    1. Evidence in a suit by a husband against his wife to recover securities by her without his knowledge or consent taken from his safe deposit box, to which both of them had access, being rented in the names of both husband and wife, she claiming the title thereto on the ground that they were the subject-matter of a gift from him to her. — Held, to show that there was no delivery of the subject-matter of the so'-called gift, and on that account and for that reason, the gift was imperfect and is therefore void.
    2. In cases relating to gifts, not only must there be shown that there was a donative intention on the part of the donor, but that there was also a delivery of the thing given, and this point of delivery includes a consideration of the subject-matter o£ the gift. The identification of the gift is part of the question of delivery, because there can be no delivery until the thing to be delivered has been ascertained.
    On final hearing on bill, answer, replication and proofs.

      Mr. Arthur F. Egner, for the complainant.

      Mr. William H. Carey and Mr. Edmunds Putney (of the New York bar), for the defendant.
   Howell, V. C.

This suit is brought by a husband against his wife to compel her to restore to him some securities which he says were taken by her in August, 1913, surreptitiously from his safe deposit box in the New Jersey Title Guarantee and Trust Company of Jersey City. The facts are these: The parties were married on April 8th, 1901; they lived together until August 23d, 1913, when the defendant left her husband and brought suit against him for divorce on the ground of adultery, which suit is still pending. At the time of the marriage the husband had a large portion of his fortune invested in securities which came to him from his father’s estate. They were kept by him in a safe deposit box in the Mercantile Safe Deposit Company in New York. To this box he alone at that time had access. On December 11th, 1904, the husband and wife appeared at the office of the safe deposit company and then and there the lease or memorandum of the box, which had up to that time stood in the name of the husband, was changed to “Wendell Andreas or Mrs. Hattie Andreas.” At that time the wife was given a key which gave her access to the box and its contents without the presence of her husband. Both parties continued to have access to the box and its contents until, some time in February, 1908, or thereabouts, when they gave up the box in the Mercantile Safe Deposit Company and rented one in the New Jersey Title Guarantee and Trust Company in Jersey City, to which all the securities were removed, and to which both parties liad access, the same haying been rented in the name of both husband and wife. After the defendant was given access to the securities in New York, she at times cut the coupons from the bonds; at other times this was done by the husband, but, by whomsoever it was done, the coupons were deposited in the husband’s individual bank account in the Hackensack National Bank until some time in 1906, when that account was changed to a joint account of the husband and wife, against which both of ihem might draw. This state of facts continued until August, 1913, when the wife, accompanied by her counsel, went to the office of the safe deposit company in Jersey City and there, without the knowledge or consent of the husband, took from the said box somewhat over half in value of the securities therein deposited, and took the same into her own possession, where the)'" now are. The husband discovered the loss in September, 1913, and, after some negotiation between the counsel for the respective parties, suit was brought as herein above stated. The other facts of the case will appear later on.

The wife claims title to the securities taken by her on the ground that they were the subject-matter of a gift from her bus-band to her on December 17th, 1904. The facts in relation thereto are hereinafter stated more fully.

In cases relating to gifts not only must there bo shown that there was a donative intention on the part of ihe donor, but that there was also a delivery of the thing given, and this point of delivery .includes a consideration of the subject-matter of the gift. The identification of the gift is part of the question of delivery, because there can he no delivery until the thing to be delivered has been ascertained. In this ease there is some discrepancy between the allegations of the pleadings and the proofs on this question of identifica!ion. In the answer of Mrs. Andreas she says:

“That in the latter part of the year 1904 the complainant gave to the defendant a one-half interest in all the personal property representing his share and interest in his father’s estate,”

and (that in the month of February, 1908, “the complainant and defendant agreed that thereafter each should hold his or her share of said property in severalty, and independent of each other,” a situation which would be impossible if the former allegation were true, unless there were an actual partition. In the cross-bill tire allegation is

“that in the latter part of the year 1904 the complainant gave to the defendant one-half of all the personal property representing his share and interest in his father’s estate then deposited in the safe deposit box rented by him in his name in the Mercantile Safe Deposit Company in New York City.”

And that in the month of February. 1908, complainant and defendant agreed that thereafter each should hold his or her share of said property in severalty. Those allegations leave it in doubt whether the defendant wished to say that she took an undivided one-half interest in the property which is the subject-matter of the suit as co-owner thereof with her husband, or whether she took a specific one-half of all the property so that it would he possible to set apart the property which belonged to her from the property which belonged to her husband, 'filie testimony given by her fails to elucidate the point, but leaves ii in quite as uncertain, a condition as do the pleadings. I extract lire following from her evidence:

“Q. Now, will you state what the conversation was between your husband and yourself with respect to the securities and to any proposed change of title?
“A. Just before that time he said ho thought I should be independent and should own one-half of what load in the hoto; he gave several reasons for why I should be independent. He mentioned an accident to a friend of ours of previous years in 1899; this friend, Mr. Burr, was thrown off the trolley car.
“Q. What was the name?
“A. Louis Burr; he was thrown off the trolley car and he was out of his mind several weeks, and Mr. Andreas said to me, ‘if anything ever happens to me 'like that you will have nothing to draw on. I think you should own one-half with me.’
“Q. One-half of what?
“A. Of the bonds and stocks that were in the box then of the Mercantile Safe Deposit.”

On February 15th, 1908, Exhibit D 2. was written by the husband. It reads as follows:

“February 15th, 1908.
“An agreement between Wendell Andreas and Hattie Andreas his wife signed this date covering the ownership of the stock and bonds in this box will be found (if not in this box) in the small safe at the residence of Wendell Andreas. The stock and bonds having been owned jointly up to this date, are divided as per this agreement, each holding their certificates independently of the other.
“Wendel Andreas.”

Concerning this agreement Mrs. Andinas testifies as follows:

“Q. At the time this was written you were with Mr. Andreas?
“A. I was.
“Q. xlt that time did you take out the safe deposit box?
“A. Yes, we took it out and took it in there and went over the things, and he told me, T thought we should have more than the verbal agreement,' that I owned one-half of what was in that box, and he wrote that paper, and he said, ‘Now that fixes it, so that you will have something to show for what is in that box.'
“Q. Now had there been any' conversation between you and your husband about a more formal agreement.
“A. Yes. we had intended drawing up an agreement actually making-the physical division and showing which certificates were mine.”

This leaves the question open both on the allegations of the pleadings and on the evidence whether the gift so called was a gift of an undivided interest or was a gift of specific items of property. The difference is not a mere quibble; it is a matter of substance and attaches to and becomes part of the transaction, and it likewise may affect the decision of the case on the point of delivery, because, if the gift so called was a gift of specific properly, it would admit of one method of delivery, while if it was the gift of an undivided interest in property a very different method of delivery might be found to be necessary. It thus becomes a question of great importance, because nowhere in the evidence, so far as I have been able to find, is there any statement that there was an actual tradition of the actual specific property from the hand of the husband to the hand of the wife.

The evidence touching the question of delivery is very meagre and unsatisfactory. Prior to December 17th, 1904, the husband had kept the securities in question in a safe deposit box in the Mercantile Safe Deposit Company, in the city of New York; the box was rented in his name and he had always paid the rent for it himself. No one had access to it except himself, and it was to all intents and purposes his own private box. On that day the husband and wife went together to the place of business of the Mercantile Safe Deposit Company, and on being asked by her counsel to state what occurred, she said:

“We went down to the Mercantile Safe Deposit together; 1 went through the usual forms, and he directed that the title of the box be changed to my name, as well as his own, changed from his name to both of our names. He took the box into one of the coupon rooms, he opened the box and showed me just exactly what was in it, explained how to out coupons; I had never seen coupons. lie told me one-half of what was in that box at any time was mine.”

Continuing, the evidence is as follows:

“Q. Did you take out and examine all of the securities?
“A. Yes.
“Q. Do you recall what was in the box at that time?
“A. I think I do.
“Q. Will you state?
“A. There were the sixty government bonds, there was the Second Avenue Railroad stock, the two thousand Michigan Central, twenty thousand D. O’s.
“Q. D. O’s, you mean?
“A. District of Columbia.
“Q. Do you recall anything else in the box at that time?
“A. Det us see, the District of Columbia., there was the Susquehanna and Western.
“Q. The Albany?
“A. Tes.
“A. The title to the farm, and all that, and the agreement with his mother.
“Q. Do you recall whether that was in there or not?
“A. Yes, I remember that.
“Q. Was anything said about that agreement at that time?
“A. Yes, he told me that was the agreement that had been drawn up shortly after we were married, or when they made their physical division.
“Q. And did he say anything about you having any interest in the property represented by that agreement?
“A. He told mo I had one-half of everything that he had in that box.”

The records relating to the title to the safe deposit box in the Mercantile company were kept on cards preserved in the card index form. They merely showed that on December 17th, 190-1, Mr. Andreas surrendered the box which bad previously stood in his name, a-nd that a new lease or memorandum thereof was made to the husband “or” wife, to each of whom was delivered a key thereto, so that they both had access at will to the box and its contents.

It appears by the testimony that both husband and wife from time to time exercised their rights of access to the contents of the box, and that they each indifferently removed the coupons from the coupon bonds therein and took them for deposit in a bank account. This deposit was made in a bank account standing in the name of the husband in the Hackensack National Bank, and was so continued for about two years, when the account was changed to a joint account of the husband and wife against which either of them might draw. This continued down to the time of their separation. Meantime, and in October, 1908, they gave up the box in the Mercantile Safe Deposit Company and rented one in the New Jersey Title Guaranty and Trust Company in Jersey City, in the names of both, to which both had access. The property remained there until August, 1913, when the wife removed somewhat over half the securities, which slid says she now has in her possession.

From all these circumstances the court is asked to determine that there was a delivery of the so-called gift at the time it was made with the intention that it should take effect immediately, for nothing short o£ this would amount to a delivery. The burden of proof on this point is on the donee. It is admitted that prior to December 17th, 1901, the property in question was, undoubtedly and irrevocably, the property of the husband. To change the title of property of such great value at a private conference between the husband and wife manifestly requires of her as a claimant to the fund that she should overcome all the presumptions in favor of the donor, and all the husband’s denials. This T do not think she has done on the question of delivery. The utmost point to which her case reaches is that it creates a doubt which she does not dispel. I am, therefore, of opinion that she must fail on this question.

But, besides the doubt which is thrown upon the subject-matter of the gift, both, by the evidence and by the variation between the allegations and the proofs, there is one other circumstance to which I must allude. The evidence does not show that there was any attempt made at any time to deliver the subject-matter of the gift in such a way as to deprive the husband of all subsequent control over it. There was no manual delivery, no actual passing from hand to hand; the husband did not lose control. There was no time, until the wife removed a portion of the contents of the box, in August, 1913, when the husband could not have taken the securities into his own possession and have sold or made other disposition of them. Until that date they were always within his reach, under his control and subject to his volition, and for some time after the defendant was given access to the box, the income from all the securities represented by coupons was deposited in the husband’s bank account. The correctness of this view is further strengthened by this piece of evidence. Among the other securities in the box at the time the •wife was given access to it were twenty bonds issued by the District of Columbia, of the denomination of $1,000 each, which weie registered in the name of the husband. No change was ever made in the registration of these bonds until July 11th, 1910, when the husband sold them and delivered them to the purchaser. He shortly thereafter purchased some New York City bonds which were placed in the safe deposit'box' and kept there until August, 1913. No stronger evidence of the control by the husband of the bonds in question could be given. There were also some bonds issued by the Albany and Susquehanna railroad which matured on April 1st, 1906. They were paid off, and with the proceeds other New York City bonds were purchased. These bonds also were placed in the same box and were there in August, 1913. I am, therefore, driven to the conclusion that there was no delivery of the subject-matter of the so-called gift; that on that account, and for that reason, the gift was imperfect, and is therefore void.

I will advise a decree in accordance with this view.


text:
    Wendell Andreas v. Hattie Andreas.
    [Submitted February 10th, 1915.
    Decided February 15th, 1915.]
    1. It is a well-settled rule in this state that where a husband transfers either real or personal property to his wife, it will be presumed that the conveyance and transfer were intended to be by way of voluntary settlement upon her. This, however, is but a rebuttable presumption, and the deed having once been made and delivered by which title is vested in her, the burden of proof is on him to establish a different result.
    2. Where there is conflicting evidence as to a husband’s object In making the conveyance of lands to his wife, the ordinary presumiition that it is intended for a provision or settlement for- her benefit is not rebutted. Therefore, if on a balancing of the testimony, it should be found that the husband has not met the burden of proof, his application to the court must fail.

      3. The proceeding must be judged by what took place at the time of the execution and the delivery of the deed, and not by circumstances which occurred afterwards.
    4. A resulting trust is one that arises by implication of law as where a man pays the purchase price of lands and has the deed made in the name of a stranger; there a trust results in favor of the real purchaser, or where a conveyance is made in trust and the trusts are never declared, or fail to take effect, there, and in that case, a resulting trust aris'es likewise by implication of law.
    5. In a suit by a husband against his wife to establish á resulting trust in lands by him transferred to her, if it appear that the transfer was made so as to obtain a reduction of taxes, he must fail in his suit, because the transaction is void as against public policy, and the court will not aid in the enforcement of any contract which has for its object such a purpose.
    On final bearing.

      Mr. Arthur F. Egner, for the complainant.

      Mr. William H. Carey and Mr. Edmunds Putney (of the Now York bar) , for the defendant.
   Howell, V. C.

This suit is brought by a husband against his wife to compel he]’ to convey to him a tract of land in Bergen county, which was purchased by him originally in November, 1889, and before the marriage between him and the defendant. On March 19th, 1911, by deed bearing date on that day, and acknowledged on April 13th, 1911, the portion of the plot in question was conveyed by the husband alone to James A. VanValen, and by him and his wife conveyed to the defendant. The premises in dispute extend along the public highway. The original tract was assessed to the husband as owner. He says that in order to reduce the valuation for taxation purposes he set apart the portion of it lying along the public highway and had the same conveyed to his wife in order that the whole tract might be assessed thereafter in two plots instead of one, hoping thereby to effect a reduction in the total ratable value of the whole tract. It is clear that the husband had some conversation with the tax assessor as to the manner in which and the amount for which the land should be assessed. The year before the conveyance was made to the wife he succeeded in having the frontage assessed in the name of the wife, although she did not then own it, separately from the remainder of the tract which was assessed in his name. He at that time did not deem it necessary to make a deed, but, after some conversation with the assessor, it was thought advisable that the land along the highway should be conveyed to the wife, and this was done by the deeds above mentioned. At the time of the conveyance there was no special agreement, either oral or written, by which the wife was bound to hold the title as trustee for the husband, nor was there any agreement on her part to reconvey the same to him. His allegation is, that in pursuance of an “understanding” to that effect, and without any intention of settlement of the property upon his wife, he proceeded to have the deeds in question prepared and executed, and he now files his bill to impress upon the said lands a resulting trust, upon the theory that he having paid the original purchase price for the land, and having conveyed the same to his wife without consideration, a trust results in his favor which it 'is the duty of this court to recognize and enforce. It is the well-settled rule in ¡his state that where a husband transfers either real or personal properly to his wife, it will be presumed that the conveyance and transfer were intended to be by way of voluntary settlement upon her. This, however, is a rebuttable presumption, and the deed having once been made and delivered, by which title is vested in her, the burden of proof is on him to establish a different result. And it may be said at this point that where there is conflicting evidence as to a husband’s object in making a conveyance of lands to his wife, the ordinary presumption that it is intended as a provision or settlement for her benefit is not rebutted. Linker v. Linker, 32 N. J. Eq. 174. Therefore, if, on a balancing of the testimony, it should be found that the husband has not met the burden of proof, his application to the court must fail. The proceeding must be judged by what took place at the time of the execution and- delivery of the deeds, and not by circumstances which occurred afterwards. At this point the evidence of the husband and wife are diametrically opposed. The husband alleges that his only idea was to save the expenditure of a large sum of money for taxes; that he and his wife had discussed the matter, and that it was agreed between them that the course which was subsequently taken should be adopted. The wife says in relation to that transaction:

“He brought a deed home and -said, ‘See what I have done ior you to-day;’ and I looked at it and I said, ‘What is VanValen’s name doing on my deed?’ and he said 'Well, in Jersey it is not legal for a man to deed property directly to his wife, so X had to do it through a third person so there would never be any trouble about it;’ and he said, ‘Now you look it over and take care of it; you have got me just as much tied up as I have always had Ackerman: you own the eleven best acres of the farm.’ ’’

And she likewise says that on one or two other occasions in conversations between them the land in dispute was referred to by him as her property. I do not see how a resulting trust can arise out of these circumstances. A resulting trust is entirely inconsistent with the evidence in the case. A resulting trust is one that arises by implication of law as where a man pays the purchase price of lands and has the deed made in the name of a stranger; there a trust results in favor of the real purchaser, or whore a conveyance is made in trust, and trusts are never declared, or fail to take effect, there and in that case a resulting trust arises'likewise by implication of law. But I do not find in this case any circumstances which can lead to such a result, even taking account of the evidence of the complainant only and leaving out of view the evidence of the defendant. On the one hand, is the deed, properly executed, with due observance of all the forms thrown about such instruments to prevent fraud or imposition; on the other hand, is the husband alleging that he did not mean to convey the property to his wife irrevocably, with not a scrap of writing to satisfy the somewhat meagre requirements of the statute of frauds.

The situation has been illustrated in this state by a long line of cases, only two or three of which shall be cited. To go no further back than 1882 we find the point much discussed in the ease of Lister v. Lister, 35 N. J. Eq. 49; affirmed, on appeal, in 37 N. J. Eq. 331; Le Gendre v. Goodridge, 46 N. J. Eq. 419: Fretz v. Roth, in the court of errors and appeals, 70 N. J. Eq. 764; and in the very recent case of Down v. Down. 80 N. J. Eq. 68, where Vice-Chancellor Learning has collected and commented on all the important cases on the subject in this state.

In my opinion, therefore, the conveyances must stand as valid instruments, and are unassailable on the part of the husband on the grounds laid in the bill.

The defendant claims also that even though the decision might be against her on the point of a resulting trust, still the complainant has acted in such a manner toward the subject-matter of the suit as to preclude him from having any relief. He testifies that the deeds were made in order to divide the large plot into two tracts so as to obtain a reduction of taxes. If this is true, or if wc consider his allegations alone in relation to it, he must fail in his suit because of the principle laid down in the case of Slocum v. Wooley, 43 N. J. Eq. 451. There the complainant conveyed lands to his father-in-law who died possessed of the same, in order that the father-in-law anight oppose the opening of a street through the lands. This he afterwards did successfully, and there was in evidence his parol promise to reconvey the land to the complainant. That transaction was held to ho void as against public policy, upon the ground that the court will aaot aid in enforcemeaat of any contract which has for its object the defeat of a public enterprise; and that the complainant could not recover the lands from the heirs-at-law of the deceased grantee. The case seems to be directly in point.

I will, therefore, advise a decree dismissing the complaiaaant’s bill.


author: Lewis, V. C.

text:
    In the matter of Robert L. Eaton, a solicitor of the court of chancery of New Jersey.
    [Decided April 29th, 1915.]
    A solicitor obtaining money from a client on false representations that her suit, prosecuted by him, was progressing, when in fact he had not begun the suit, is guilty of misconduct, justifying disbarment.

      On an order to show cause why Robert L. Eaton should not be adjudged guilty of malpractice as a solicitor of the court of chancery and be put out of the roll of solicitors and be suspended from practicing as solicitor, or to be otherwise disciplined and punished.

      Mr. Nelson B. Gaskill, prosecutor (appointed by the chancellor) . '

      Mr. C. Addison Swift, for the defendant.
   Lewis, V. C.

Robert L. Eaton is charged with malpractice as a solicitor of the court of chancery. The evidence, which is convincing, is that the solicitor, while practicing in the city of Elizabeth, this state, was consulted on or about the middle of February, 1913, by Anna Williams, for the purpose of obtaining a divorce from her husband, Theodore Williams. She furnished the solicitor with the facts in her possession regarding the case, and he thereupon advised her that she was entitled to receive a decree of divorce and agreed to act as her solicitor and prosecute for her. Subsequently, lie informed his client at various times that her cause had reached certain stages in Llie prosecution thereof, and that her husband had been notified of the pendency of the action against him. Some time in May, 191-1, he stated to her that the case was coming up for hearing and that he would need $25 for court expenses, and upon this representation she paid him the sum of $25, having previously paid various sums for fees and expenses requested by the solicitor, amounting to about $40. When called upon later for further information as to the situation of the case, Mr. Eaton stated that the calendar of the court was very crowded, but that the matter would come up within a short time, and some time in August, 1914, he told Mrs. Williams that the court desired a certain point of evidence verified, which would cause further delay.

An affidavit, which Mr. Eaton admits the truth of, was filed in these proceedings, by Alexander Kupferman, who says he was requested by Mrs. Williams to inquire of Mr. Eaton concerning the progress of her divorce proceedings. He did so, writing to Mr. Eaton on the 4th day of .September, 1914, and received from him a reply, as follows :

“Got a letter from Gt. of Chancery commanding my appearance in Williams case to-morrow at Trenton.
“Will let you hear from mo on my return.”

The records of the court of chancery of this state have been examined and contain no proceedings instituted in behalf of Anna Williams against her husband, Theodore Williams, for divorce.

The solicitor hied an affidavit in the case admitting the truth of the facts contained in the affidavits, upon which the order to show cause herein was based, and he also appeared at the hearing before me. Both in his affidavit and in his' oral statement to the court he admitted receiving the sum of $65, which he returned upon the institution of this action, together with a further sum of $21, which was reported to him by Anna Williams and one Alexander Kupferman as their joint expenses in telephone calls, railroad fares, &c., by reason of their connection with the divorce suit.

After the presentation of the case by the prosecutor, Mr. Eaton was asked if he desired to offer any testimony and replied that he did not. His counsel then stated to the court that Mr. Eaton had no defence to offer whatever; that the charges made against him were true and that his dereliction was due to his infirmity of habit in postponing from time to time what he should have done at once, and that his endeavoring to conceal such carelessness and procrastination by a misstatement of facts did not arise from any willful intent to deceive his client or obtain from her money by reason of such deception.

This case falls within that of In re Simpson, 82 Atl. Rep. 507, where a solicitor was disbarred who obtained money from his client upon the false representation that her suit was pending and progressing, when in fact it had never been coman enced.

At a conference of the court this case was considered by the chancellor and vice-chancellors and all concurred in the conclusion reached and the penalty to be imposed.

Ail order will be made permanently debarring the respondent from appearing in this court as a solicitor and prohibiting him from exercising any of the functions, rights or privileges of a solicitor of this court.


text:
    Paul Mailander and Sophie Mailander v. Otto Pluckthun.
    [Decided May 6th, 1914.]
    In a suit by the vendors against the vendee to compel the surrender and cancellation of the deed, a reconveyance of the property, and the cancellation and surrender of the promissory note given by the vendors to the vendee, evidence Held to show that the vendors were induced to part with the property and their note, upon false- representations made by the vendee, and that a decree will be made providing for a rescission of the contract, the reconveyance of the complainants’ property, and the surrender and cancellation of their note.

      Mr. J. Emil Walscheid for the complainants.

      Mr. Alberico O. Ciccarelli, for the defendant.
   Lewis, V. C.

The hill filed' in this cause prayed that a certain deed made by the complainants to the defendant he surrendered and canceled, and that the defendant be required to convey back the-lands described in it, and also be compelled to cancel and surrender a certain promissory note given by the complainants to the defendant.

The complainants, on October 20th, 1912, were the owners of certain lands in the township of-North Bergen, in the county of Hudson, upon which they lived in a one-family house. The husband, Mailander, conducted a stationery store in Hoboken. At the time of the making of the deed the defendant had known the complainants for a period of about three years, having been in the habit of often coming into the store. He was a barber and worked about two blocks from the complainant’s place of business. The defendant, on October 20th, 1912, went to the Mailander store and informed Mailander that he had money for sale and wanted to know if he, Mailander, took advertisements for newspapers. Hpon receiving an affirmative answer, lie then explained that he had a bond and mortgage which he desired to sell, and Mailander told him he had a friend to whom lie might be able to sell it, and if Pluckthun would bring the bond and mortgage to him, Mailander would take them to his party in New York and would try to sell them for him. Plucktlrari brought the bond and mortgage and Mailander took them to New York in an attempt to sell them for the defendant. About two weeks laier the party to whom Mailander had taken the bond and mortgage called upon Pluckthun, and on the evening of this day the defendant came to the store of the complainants and told them that he had met the man from New York; that he had desired to Search the property and had requested the defendant to pay the money to cover the expenses of the search, but that lie, the defendant, could not see why he would want to search the property; that it was not necessary as he had only had the property for two weeks and had a search before he took it. The defendant thereupon suggested to the complainants that they should buy the bond and mortgage, and told them that he had the mortgage papers at court and that if it were a bad mortgage lie would never have taken it; that the complainant Mailander could never get into any trouble over it; that everything was all right; that the property covered thereby was adjacent to a car line in North Bergen; that it was a ten-room two-story brick building with all improvements in it, renting for thirty to thirty-two dollars per month; that it was then rented, and it was so situated that anyone desiring to go into business could easily put a store in the basement of it; that the property was located in a good section ; that the owner of the property was a rich contractor and there was nothing against the property besides defendant’s mortgage excepting a first mortgage for $3,000, on which all interest had been paid up to date, and that the property was worth the «urn of $4,800; that the taxes against the property had been paid, and that it was clear, excepting for the two mortgages just mentioned; that he had just had the whole tiling searched two weeks ago and complainants could take his word for it.

The complainants, upon these representations, thereupon agreed to exchange their equity in their home, plus the sum of $200, for this bond and mortgage, without examination of title or of the property securing the bond and mortgagfi, and the transaction was completed.

Three or four days after the exchange, the complainants were warned that the mortgage which had been given to them by Pluckthun was a bad mortgage, and that there was a foreclosure in sight and a couple of years interest and taxes to pay on it, and that the real owner was not known. The complainant Mailander called upon the defendant and informed him of what he had heard, and said that if it was true, he was going to try to get his property back, at which the defendant laughed and said, “You can do as you like.”

A short time afterwards the complainants, upon further investigation, found that the property covered by this bond and mortgage was located on the side of a hill, fifteen minutes walk from where it was supposed to be located. There were no sidewalks oh the street, no gutters, nor was the street curbed. The house was empty and the complainants could not get in it; they were told that it had not been rented for a good while. The agent in charge of the tract of land upon which the building was erected told them that foreclosure proceedings against the property were then pending. The building upon the lot covered by the mortgage was a portion of a double-brick building. Mailander, with this information, immediately called upon Pluckthun and told him that he had misrepresented the matter and he ought to take his property back. Pluckthun refused.

It was further discovered by the complainants that at the time of the exchange taxes for the three preceding years were in arrears and unpaid; that the land upon which the building was erected was assessed for $200 and the building at $3,000; that the rental value of the propertj'' was from twerdy-two to twenty-three dollars per month, and that the property would not exceed in value $3,000 at the time of tlje exchange. The first mortgage for $3,000 against the property had been placed May ,20th, 1908. It carried interest at six per cent. Interest for one year onty, up to May 20th, 1909, had been paid, and there was three years interest due on the 20th day of May, 191.2. Interest for three years and five months appears to have been due when the exchange was made. The mortgagee, in 191.2, foreclosed this mortgage and bought in the property at foreclosure sale. When he ’placed his mortgage he valued the lot at $100 and the building at $3,300, making a total valuation of $3,700.

The testimony developed the fact that one Kennedy had loaned to the builder the sum of $500, taking a second mortgage upon the lot covered by the Pluckthun mortgage. This mortgage for $500 had in turn been used as collateral security with the bank to secure the payment of a loan less in amount than $500 and had been assigned as security for this loan to one Adelberg, who in turn assigned the sanie to Elizabeth Carey. Elizabeth Carey foreclosed the $500 mortgage and bought in the property under the foreclosure sale, and then made a deed to one Steer and took back the $1,500 bond and mortgage from Steer, which she in turn assigned to Pluckthun. Miss Carey testified that she received nothing from Steer either after giving him the deed or on account of the mortgage. She was acting as a dummy for her brother.

In giving his evidence, the defendant admitted that be described the mortgage as a mortgage on a two-familv brick house in his dealings with the complainants. He stated that he acquired the bond and mortgage in an exchange in which he gave a lot in Middlesex county valued at $125. Upon this lot he said he had erected by day labor a house which had cost him between seventeen and eighteen hundred dollars, and upon which there had been placed a first mortgage of $800. He made the exchange in October, 1912, without making any examination of the title and without having seen the property covered b,y the bond and mortgage, ami without having shown to the Careys the property which they Avore acquiring in exchange lor this mortgage. He testified that he had made no inquiries of the Careys as to the past due taxes, assessments or interest on mortgages AAdien he made the exchange, and didn’t knoAV anything about those things. He never saiv Elizabeth Carey, the person from Avhom the mortgage Avas. assigned to him, and had no dealings Avhatever with her; that when he made the’exchange AAÚth the complainants he had not even seen their property.

There is no doubt in my mind that the complainants were induced, to part with their home in the township of North Bergen and their note upon false representations made by the defendant, and I shall advise a decree providing for a rescission of the contract, reconveyance of the complainants’ property, and the surrender and. cancellation of their note. Turner v. Houpt, 53 N. J. Eq. 526; Straus v. Norris, 77 N. J. Eq. 33; Eibel v. Von Fell, 55 N. J. Eq. 670.


text:
    Randolph Perkins v. Catherine Samler et al.
    [Decided May 12th, 1915.]
    Evidence in a foreclosure suit Held insufficient to show that the mortgage under foreclosure and the bond secured to be paid thereby are •fraudulent.

      Mr. Randolph Perkins, pro se.

      Mr. John D. Pierson, for the defendants.
   Lewis, V. C.

Randolph Perkins, the complainant, seeks to foreclose a mortgage made by Catherine Samler to James B. Wilson, dated March 12th, 1912, and assigned to the complainant by assignment dated March 27th, 1912. The defendant Catherine Samler filed a cross-bill against the complainant and James B. Wilson, the mortgagee and a co-defendant, asking that the said mortgage and accompanying bond be surrendered for cancellation as fraudulent on the payment of the amount of her indebtedness to James B. Wilson.

The principal defendant, Catherine Samler, is eighty-nine years of age. She testifies that all her sons went away from home after her husband died, excepting James, and that none of them have ever rendered her any financial aid. She has known James B. Wilson for many years, and, according to her testimony, she regarded him as her best friend and the one on whom she relied for financial assistance when required. -Until a few years ago it is admitted that Wilson was in affluent circumstances, and that he frequently advanced Mrs. Samler money. Wilson says that in the fall of the year 1907 his financial condition no longer warranted him in aiding Mrs. Samler, and that on the 3d of September, 1907, she gave him a note of $1,000 on account of her indebtedness to him. The note bore the endorsement of James H. Samler, her son, and the signature of Mrs. Samler was witnessed by Mr. Arthur D. Tuttle, of Westfield, and on May 29th, 1909, Mrs. Samler gave to Wilson a note for $2,500, which, together with the note of $1,000, was in settlement of their financial transactions covering fifteen years or more. This note is also endorsed by James H. Samler, and the signature of Mrs. Samler witnessed by Miss Pitch.

My review of the testimony leads me to the conclusion that Wilson realizing that Mrs. Samler was reaching a very old age desired .to have their financial connections concluded, and for this purpose had her execute the notes for the money due him. It is quite clear from the testimony that her sons did not give her any material assistance and that she relied largely on the kindness of Wilson. After the making of the notes he continued to give her small sums of money, and in 1912, when she applied to him for more money, he said that if she would, execute a mortgage to him to cover a portion of her indebtedness lie would raise money on the mortgage and assist her further. The mortgage was accordingly executed.

Wilson testified that he believed that the notes were evidence of indebtedness and that is the reason he did not retain the old papers and memoranda of, loans, and Miss Fitch supports Wilson’s testimony as to many of the loans made by him to Mrs. Samler. Mrs. Samler was. unable, owing to her failing memory, to tell the court very much about her transactions with Wilson, but said that her son had an account. Upon examination of the son it was found that he had no such account to offer. He produced a few paper fragments and said that they covered all the transactions between his mother and Wilson. The court was hot impressed with the sincerity of this witness, for he swears that his name endorsed on the note of September 3d is a forgery, although Arthur D. Tuttle, a disinterested witness, saw him sign it. He also swears that the endorsement on the note of May 28th, 1909, is not his signature. He swears that the bond and mortgage in this case is fraudulent, although he signed the bond in the presence of a reputable lawyer, John R. Elliot. He further swears that the signature on the letter of March 27th, 1912, is not his. The letter is as follows:

“March 27th, 1912.
“Mr. Randolph Perkins,
15 Exchange Place,
Jersey City, N. J.
“Dear Sir — Or March 12th I executed a bond and mortgage to James B. Wilson for $2,500. I understand that Mr. Wilson is attempting to negotiate the sale or loan of this mortgage.
“This letter is to inform you that I admit tli.e execution and delivery of the mortgage and that there is no defence to such mortgage.
“Yours very truly,
“Witnesses: “(Signed) Catherine Samler.
James Samler,
Gladys D. Fitch.”

The complainant in acquiring the mortgage evidently used more than common care, and before paying the balance of the purchase price he visited the property and saw Mrs. Samler and asked her whether the mortgage on her property which Wilson was endeavoring to sell was all right. Mrs. Samler informed the complainant that it was.

It is unnecessary in disposing'of this ease to deal with the question of estoppel, as I cannot, on the facts, reach any other conclusion than at the time of the execution of the mortgage there was due-from Mrs. Samler to Wilson at least the amount mentioned in the instrument.

I think there must be a decree for the complainant.


author: Backes, V. C.

text:
    John I. Brokaw, executor of estate of Caroline A. Voorhees. deceased, v. Lottie Emens et al.
    [Submitted February 5th, 1915.
    Decided February 8th, 1915.]
    1. Under the rule that, if testator manifests an intention to vest in the first legatee the uncontrolled power of disposing of the property, a limitation over is void, a provision of a will, “the remainder of money to go to my niece * * * and at her death to her children,” gives the first taker only a life estate.

      2. Intention of testator, as ascertained by rules of construction for that purpose, must be followed by the court.
    3. Where an aunt bequeathed money to a niece and on her death to her children, children born after the death of testatrix would take.

      Messrs. Codindton & Blatz, for the complainant,

      Mr. Clarence Garretson. for the defendants.
   Backes, V. C.

Caroline A. Yoorhees left a will, in which she provided as follows:

“Item 7th: The remainder of money to go to my niece Mrs. Lottie Emens, of 572 57th St., Brooklyn, N. Y., and at her death to her children.”

Mrs. Emens claims an absolute estate in the fund and contends that the bequest over' to her children is invalid. The complainant, executor, prays a construction of this item and a determination of the rights of the parties thereunder. There seems to be nothing of an involved or complex nature in this provision. The principles and the rules of construction applicable are well settled in this state. In Annin's Executors v. Vandoren's Administrator, 14 N. J. Eq. 135, it was laid down that “the cases rest upon the principle that if the testator, either expressly or by implication, manifests an intent to vest in the first legatee the uncontrolled power of disposing of the property, such power involves the idea of absolute ownership, and the limitation over is void, as inconsistent with the rights of the first legatee.” And in McCloskey v. Thorpe, 74, N. J. Eq. 413, Mr. Justice Swayze, in the court of errors and appeals, after a review of the authorities, said: “An examination of these cases demonstrates that if the language of the will is such as necessarily to imply an absolute power of disposition, the estate is absolute in the first taker, and such power of disposition is to be implied from an untrammeled power to expend the legacy.” Adopting these deliverances as our guide, and bearing in mind our obligation to give full effect, i E possible, to all of the terms of the will, and to cany out the intention of the testatrix, to be ascertained by the well-known rules of construction and interpretation, we must obviously arrive at the conclusion that the testatrix intended that the children of Mrs. Emens should enjoy the principal of the fund, undiminished, at their mother’s death, for the will gives Mrs. Emens no right, directly or by implication, to consume the principal, or in any manner to dispose of it. The use— that is, the income, only was given to her for life. To reach any other result, would be to entirely ignore tire limitation over to the children, which, in the absence of compelling deductions or inferences to the contrary, to be gathered from the language of the will, is altogether unwarranted. See Tooker v. Tooker, 71 N. J. Eq. 513.

The executor’s account has been confirmed by the orphans court of Somerset county, and he has in hand for disposition, under the quoted item of the will, $3,800, which he will be directed to pay to Mrs. Emens upon her giving security as provided by law. 3 Comp. Stat. p. 3080 § 8.

Two of Mrs. Emens’ children are of age, and by their answer have expressed their desire that their share of the estate be paid to their mother. But I apprehend that this cannot be done with-' out endangering the estate. The limitation over was to all of the children of Mrs. Emens and will let in those hereafter bom. If Mrs. Emens can prove that she is beyond the child-bearing period, it majr be decreed that the shares of the consenting children be paid to her upon their giving releases to the executor.


text:
    Salome R. Lamphear v. Horace J. Subers et al.
    [Submitted February 18th, 1915.
    Decided February 20th, 1915.]
    1. A court of equity may, in the first instance, settle the question of legal title, where other grounds of equitable jurisdiction are present, but then only when the jurisdiction is not assailed or a trial of law is waived.
    2. Where a bill for injunction alleges ownership of that part of the bod of a stream from which defendant was taking gravel under claim of right, irremediable injury, destruction of inheritance, diversion of stream, &c., but there was no showing of insolvency, and the allegations were refuted by the nature of the injury, which was in the nature of a trespass, for which adequate remedy existed, the bill would not be retained until the outcome of the action at law to settle the legal title.

      3. Equity will not restrain a non-continuing trespass, where the injury does not appeal' to be irremediable and destructive of the estate, and where there is an adequate remedy at law.

      Mr. Azariah M. Beekman, for the complainant.

      Mr. Clarence E. Case, for the defendants.
   Backes, V. C.

This is a bill filed to restrain the defendants from removing sand and gravel from the bed of the North Branch river, one of the tributaries of the Raritan river, in Somerset county. The main lands of the complainant and defendant Subers lie on opposite banks of the river. The bill sots up the complainant’s title to her lands, by metes and bounds, the southerly boundary running along the middle of the stream. It is alleged that within these boundary lines, in the stream, is a large deposit of sand and gravel, one hundred loads of which the defendants have taken, and several hundred tons more they threaten to take, for the purpose of building a dam and sluiceway in the river, on the property of the defendant Subers, and that Subers has taken the sand under a claim that he, and not the complainant, is the owner of the land from which it is taken. The bill then alleges that

“The removal of the said sand an<J- gravel would work serious and permanent injury to her financially and also impair and destroy the rights and hereditaments arising from her ownership of said land and connected therewith and the continuation of the taking of the same would result in an irreparable injury to her said premises in that the said sand and gravel would be so removed as not to be readily and properly replaced and by the removal of the. same to any appreciable extent the course of the said north branch of the Raritan river would be diverted in such a way as to threaten and destroy the lands of your oratrix immediately adjacent thereto and that the taking of the said gravel has already resulted in the obstruction and diversion of the waters of the said stream to the depreciation of the value of the lands of your oratrix and has and will result in great and irreparable injury to her property and the injury will be such as will be likely to continue and increase in severity and extent, as the material taken cannot be replaced to its original condition and cannot be compensated for in money value, only, particularly without resort to a multiplicity of suits in the law courts of this state.”

The defendant Subers in his answer admits the taking of the sand, and asserts that he took it as of right under his title, which lie sets out in full, under which he claims the bed of the stream from bank to bank, including the locus in quo. He also answers that the dam and sluicewajq for which the sand was taken, has been completed, and that he has no intention of taking more. The answer challenges the jurisdiction of the court. Upon the filing of the bill, an order to show cause was made why an injunction should nor issue, with an ad interim stay, which, by consent, was continued without day. The cause has been set down for final hearing, and a motion' is now made, as of the hearing day; that the restraint be removed and the bill dismissed, or that the bill be retained pending a trial at law of the issue of title. The view I entertain of the case makes it unnecessary to deal with the propriety of the continuance of the restraining order. The disperte between the parties is as to which of them owns the bed of the river from which the sand was taken, and the solution depends upon and involves an examination into their respectivo titles and a determination as to which should prevail. This must be tried at law. Outcalt v. George W. Helme Co., 42 N. J. Eq. 665. A court of equity may, in the first instance, settle the question of legal title, where other grounds of equitable jurisdiction are present, such as are pointed out in Hart v. Leonard, 42 N. J. Eq. 416, but then only when the jurisdiction is not assailed or a trial at law is waived. Public Service Corporation of New Jersey v. Town of Westfield, 82 N. J. Eq. 43; affirmed, Ibid. 662. I find no such features here to take the case out of the principle governing Todd v. Staats, 60 N. J. Eq. 507; South Amboy v. Pennsylvania Railroad Co., 77 N. J. Eq. 242; Mason v. Ross, 77 N. J. Eq. 527; Imperial Really Co. v. West Jersey Railroad Co., 79 N. J. Eq. 168. “Irreparable injury” is alleged, it is true, but it is not apparent. If the defendant has wrongfully taken the complainant’s sand, an action for damages, to be measured by the value of the sand and the extent of other injuries, affords an adequate relief. There is no claim or pretence that the defendants are not able to respond to a money judgment against them. “Destruction of the inheritance”* is also pleaded, but it is not demonstrated. It is claimed that the removal of the sand would divert the course of the stream in such a way as-to destroy the complainant’s bank and the meadow land adjoining. But how can this be so, from the nature of things? The sand of a river is an ever-shifting element, and that which-is removed is quickly replaced. If, however, by the removal the course of the stream should be changed, it would either add to, or make small inroads upon, the complainant’s upland, and any damage or injury that might be sustained, would be inconsiderable, for which full compensation could be had in an action of trespass. The conduct charged to the defendants is nothing more than that of a trespasser. Equity will not interpose by injunction to restrain a trespass, where the injury does not appear to be irremediable, and destructive of the estate, and where the ordinary legal remedy in the courts of law can afford adequate satisfaction. Quackenbush v. Van Riper, 3 N. J. Eq. 350.

Therefore, the. trespass not being a continuing one, involving a multiplicity of suits to secure redress, and there appearing to be no reserved equitable remedies warranting a retention of the bill until the disputed legal title is settled at law (Outcalt v. Helme Company, supra), and the defendant having seasonably questioned the jurisdiction, the bill will be dismissed, with costs.

There is another reason why the prayer of the bill for a permanent injunction must be denied and the bill dismissed. The invasion of .the complainant’s property was temporary and for a purpose which is now at an end. It is so alleged in the answer and admitted by the complainant’s counsel. Obviously, a writ will not issue, which would be futile. The decree will be without prejudice to the complainant’s remedy at law.


text:
    Mary Robeson Smith et al. v. William H. Morrow et al.
    [Submitted March 2d, 1915.
    Decided March 10th, 1915.]
    A bill by the heirs of a grantor, who had conveyed property to trustees, and provided that, if it should at any time cease to be used for the purpose therein specified, it should revert to him and his heirs, in which they alleged that the property had ceased to be used for the specified purposes, and sought to recover possession thereof, states merely an action to recover property for a breach of condition subsequent in a deed, triable at law, and equity has no jurisdiction thereof, though it could take jurisdiction of a suit by the trustees to have the terms of the trust construed for their guidance.

      Messrs. Vroom, Dickinson & Bodine, for the complainants.

      Mr. Sylvester C. Smith, for the defendants.
   Backes, V. C.

The bill involves the title to the Belvidere Classical Academy, in the town of Belvidere. In 1843, Anna M. Wall caused the land to be conveyed to three trustees in fee:

“Upon this special confidence and trust nevertheless, that they, the said party of the second part, and the survivors and survivor of them, their and his heirs and assigns, and shall hold the said lot for the purpose of building an academy or school house, for the education of youth and to used to promote the cause of education, the improvement of the mind, and morals of the rising generation, the diffusion of scientific knowledge and rational amusement or such other purposes as will have a tendency to render the rising generation intelligent, moral, useful and good citizens if the citizens of Belvidere shall shall see proper to erect a building for that purpose on the said lot, not less than forty-five feet front, and thirty-two feet deep, not less than three stories high, including a basement story under the whole, not less than four feet below the earth and six feet above the earth, in a good substantial,, and workmanlike manner, and complete the same in eighteen months from the date hereof. And it is hereby declared that the said party of the second part, and the survivors or survivor of them, and the heirs of such survivors or survivor, and their or his assigns, may continue the said trust from time to time as occasion may require, by conveying a new Trustee or Trustees so as to perpetuate the said Trust, and if it shall so happen that the contributors to the erection of the said building shall become incorporated, then that it shall and may be lawful for the said party of the second part, the survivors or survivor .of them, their and his heirs or assigns to convey the said premises to such corporation and their successors and assigns, upon the trusts herein designated. And it is hereby further declared that if the said building shall be converted to any other purpose, than that herein designated, for the term of five consecutive years, or the said trust shall be violated in any other manner, so that the end and object of the trust herein declared, shall be defeated or perverted. then and in that case the said lot, with the appurtenances, shall revert to and be revested in the said party of the first part, his heirs and assigns.'’

The citizens of Belvidere erected a building as thus stipulated, whereupon, in 1868, the grantees conveyed the premises to the Belvidere Classical Academy, a corporation. The corporation maintained an academy until a few years prior to 1886, when the officials of the organization abandoned the undertaking. Tn 1886, three or four gentlemen, one of whom was the defendant William H. Morrow, residents of Belvidere, took possession of the building, installed teachers, and conducted a school for six years. Thereafter, in the years 1897 and 1898, 190-i and 1905 and 1913, the public school authorities used the building for class rooms. Mr. Morrow seems to have been in possession and control of the building during all of these years, but alwáys willingly surrendering its use for educational purposes whenever request was made. During the periods when the building was not used for school purposes, he, occasionally, and for short spaces, used it in part for the storage of crops, the housing of his colored man, and, latterly, permitted the upper floor to be used for the giving of dancing lessons. On the lawn he erected a tennis court for use of the young folks of the town, and also sometimes kept his fancy chickens in the yard. In Mr. Morrow’s supervision and control of the building he has been a voluntary substituted trustee, with the single aim of preserving the trust for the public, and in fact expressed himself at the hearing that he was anxious to surrender the building to the public authorities for school purposes if they'- would accept. His motives were philanthropic, in the interest and welfare of his home town. When, in 1886, he and his associates undertook their work, there was a builder’s mortgage of $600 on the premises which they purchased, under which he now, as against all but the public authorities, asserts his right of possession. The complainants claim to Ire the owners of a reversionary estate, and in the hill allege and b.y the proofs attempt to show that the uses and trusts upon which the property was conveyed have been violated, that the trust lias failed and been defeated, and that the lands and premises have reverted to and revested In the heirs and assigns of the original grantor (the complainants), and they pray that it lie so adjudged and that it he decreed that the defendants, Morrow, the Belvidere Classical Academy and the State of New Jersey, the three defendants, have no right, title and interest in the premises; that all right, title and interest is vested in the complainants, free from the trusts aforementioned, concluding with a prayer for other and further relief.

The trustees of the Belvidere academy have not appeared, except as they may he represented by Mr. Morrow, who, in his answer, disputes the alleged title of some of the complainants, denies the material facts of the bill upon which the claim to a reverter is founded (which he supports by proof), and also sets up that this court is without jurisdiction in the premises. The defendants’ counsel offered to argue the jurisdictional question before the taking of testimony began, hut, as the point was not brought to my attention until the hearing day, I thought it would expedite the cause to take the proofs and reserve the question for final argument.

The complainants’ counsel argues that the deed creates a charitable irust, and that inasmuch as trusts of this character are under the general supervisory powers of the court of chancery, jurisdiction ought to he exercised to construe the terms of the trust, in analogy to the common practice of construing trusts advisory of the duties of trustees, or in the enforcement of trusts, or where the construction is incidental to other equitable relief. Chancellor Magie, in Hoagland v. Cooper, 65 N. J. Eq. 467, in speaking of the exercise of jurisdiction to construe wills, and which is apposite in the construction of other documents involving trusts, says: “Most of them are cases in which the trustee, or one charged with duties of a fiduciary character, has sought the aid of the court to direct him with respect to his official duty as trustee and in which the determination as to what direction should be given is involved with the construction of the will. * * * There are other cases in which this court, under its general equitable jurisdiction, construes wills and other writings in determining whether the particular relief sought]-by the bill is proper to be given, as upon bills for injunction, interpleader, &c. * * * In no case has it been asserted that the court may 'be asked and compelled to construe a will except as incident to .some relief which may be afforded by a decree. It has been expressly held that the court will not construe wills for the sake of giving counsel and advice to the parties, but only for the purpose of giving positive directions for the action of' the trustee.” Other authorities need not be cited to demonstrate that the complainants cannot invoke this function of the court. What the complainants really seek is a construction of the deed of trust, a finding of fact that the terms of the trust have been violated and a conclusion that the title has reverted, as a basis for a decree declaring the title of the land out of the defendants and to be in the complainants, by virtue of a right of re-entry because of a breach of a condition subsequently annexed to the grant; in effect, a decree of ejectment. The issue is one over which equity lias not cognizance. The dispute is concerning a purely legal right in land, and must be solved in the law courts, which tribunals afford an adequate remedy. Sheppard v. Nixon, 43 N. J. Eq. 627; Torrey v. Torrey, 55 N. J. Eq. 410; Thropp v. Public Service Electric Co., 93 Atl. Rep. 693.

The cause will be transferred to the law courts under “The Transfer of Causes act’’’ (1912), P. L. p. 117.


text:
    Otto O. Stillman and John A. Covert, executors, &c. v. Friendship Lodge, No. 30, Knights of Pythias et al.
    [Submitted February 16th, 1915.
    Decided March 12th, 1915.]
    Under the by-laws of a benevolent society, providing that on the death of a member who. if sick, would be entitled to benefits, the death benefit should be appropriated toward his funeral expenses and paid to such competent relative as the lodge might select, and that in the absence of competent relatives, of which the lodge should be the sole judge, it should 'take charge of the funeral, the lodge, having notice that the executors were, and that decedent’s daughter was not, liable for the funeral expenses, could not defeat the trust by arbitrarily declaring the daughter, who had no right to the fund, to be the beneficiary, as it was only when it took charge of the funeral itself that it was the sole judge as to the beneficiary and the absence of competent relatives entitled to the fund.

      Mr. Freeman Woodbridge, for the complainants.

      Mr. George L. Burton, for the defendant Friendship lodge, &c.
   Backes, V. C.

This case was submitted upon an agreed state of facts. The complainants’ testate, Isaac I). Fry, at the time of his death, was a member in good standing of Friendship Lodge, No. 30, Knights of Pythias, an incorporated benevolent society. Sections 9 and 10 of the lodge’s by-laws provide as follows:

“Section 9. In case of the death of a member of this Lodge, who if sick or disabled would be entitled to benefits, such sum as described in Section 10 of this Article shall be appropriated towards defraying his funeral expenses and be paid for that purpose to such competent relative of the deceased as this Lodge may select. In the absence of competent relatives, of which the Lodge shall be sole judge, the Chancellor Commander shall take charge of the funeral and keep an accurate account of the disbursements, make a full and detailed report to the Lodge, and the balance, if any, of such appropriations shall be expended by the Lodge, under, the supervision of the Trustees, for the benefit of the widow or children of the deceased member, if any there be; and if the deceased member shall not leave any widow or children, then such balance shall be returned to the Lodge funds.
“Section 10. Upon the death of a member admitted after January 1st, 1910, and entitled to full benefits, the death benefit shall be graded as follows:
On a membership of 1 to 90 days............... $100.00
On a membership of 91 to 180 days............. 150.00
On a membership of 181 to 270 days............ 200.00
On a membership of 271 days or over........... 250.00”

The complainants, as executors, incurred the funeral expenses, amounting to $336.60. Six months thereafter the lodge paid the death benefit of $250 to the member’s daughter, Charlotte Fry Cash, taking from her an indemnity bond. Mrs. Cash had not been on friendly terms with her father. She was not a member of his household, and for many years there was no communication between them. Of this the lodge had knowledge, as well as of the fact that the executors had incurred the funeral charges. The money was paid against the protest of the complainants. The bill prays a money decree against the lodge for the amount of the benefit.

The lodge’s defence is that it has discharged its legal duty, by strictly following the terms of its by-laws in selecting the only relative of the deceased as tire “competent relative,” of which it was the sole judge, to receive the benefit. The merit of this defence depends upon the correct meaning of the two sections of the by-laws above quoted, and the duties arising thereunder. The death benefit, the amount of which is fixed by section 10. is, by the preceding section, plainly impressed in the hands of the lodge, with the primary trust to appropriate it towards the funeral expenses, and this trust was to be discharged in one of two ways; either by the lodge itself conducting the funeral, or selecting a relative who was competent — that is, likely, in the ordinary course of affairs, to become responsible for the last services. Had the lodge paid the money to the daughter, in the reasonable expectation that she would incur the burial charges, its full measure of duty would have been discharged, for it could not have been held responsible if the money thereafter had been diverted to another use. But that is not the situation here, because the lodge knew when it paid over the moneys that the executors were, and the daughter was not, liable for the costs of the funeral, and in the proper performance of its trust it should have wholly eliminated the daughter as a “competent relative/’ and directly, or through the executors, applifed the fund towards the liquidation of the undertaker’s bill. The daughter had no light to the fund, and the lodge could not defeat the trust by arbitrarily selecting a beneficiary who, although coming within a literal definition of “'competent relative,” was alien to the performance of the trust. Fanton v. Coachmen’s Benevolent Union, 13 Misc. Reps. (N. Y.) 245; Hughes v. Journeymen Horseshoers’ Protective Union, &c., 60 N. Y. Supp. 526; Wilkins v. Price, 142 N. Y. Supp. 574; Britton v. Royal Arcanum, 46 N. J. Eq. 102.

The by-laws do not constitute the lodge, in all events, to be the sole judge of the recipient of the benefit. It is only when the lodge itself takes charge of the funeral that its judgment is conclusive upon the question of the absence of competent relatives of the deceased to perform that office.

A decree may be entered in favor of the complainants, with costs.


text:
    George E. Hoe et al., trustees, &c., v. Marion M. Hoe, individually and as executrix, &c., et al.
    [Submitted April 6th, 1915.
    Decided April 9th, 1915.]
    1. A court of chancery has no jurisdiction to construe the codicil of a will where the question presented is purely one involving the legal title to lands.

      2. A court of chancery has no jurisdiction to construe the codicil of a will at the instance of trustees thereunder, where they merely ask to be informed whether the devisee owns the property devised absolutely or only for life, and ask no further relief or guidance in the administration of the trust estate.
    3. A bill by the trustees under a will to determine their rights to the remainder thereunder may properly be brought under Comp. Stnt. 1910 p. 5399, relating to the determination of claims to real estate in certain cases, and to quiet title to the same, and page 5404, relating to the determination of claims to estates in remainder, and to quiet title to the same.

      Mr. Edward Maxson, for the complainants.

      Mr. Herbert, Clark Gilson, for the defendants.
   Backes, V. C.

The trustees under the will of William A. Hoe, deceased, filed this bill for a construction of the third codicil of the testator’s will, by which he devised to his daughter Marion M. Watkins the premises No. 17 Lawnridge road, Orange, New Jersey, of which she was to have the free use and enjoyment as a home, with the privilege of leasing the same for a term not exceeding two years. She was not to have the right to convey or mortgage during her lifetime, but was given the power to dispose of the estate by will, to her issue only. If she failed to appoint by will, the property was to go to her issue. It was also provided that if she desired to sell during her lifetime she, with the consent of the executors or trustees of the will, should have the right to do so. The devise was upon condition that she pay tire upkeep of the property, and, if she failed to do so, the executors or trustees were to pay the same and charge the amount against the devisee’s income, provided for under the residuary clause of the will. By the residuary clause of his will, the testator devised and bequeathed the hulk of his estate to three trustees, in trust, to pay the net income to his wife for life, and at her death to distribute the remainder among his three children, in equal parts. The shares of his two daughters, one of whom is Marion M. Watkins, mentioned in the above codicil, were to be held in trust, to pay the net income to them for life, and at their death the estate was to go to their respective issue. The trustees, in their bill, aver that the codicil is ambiguous; that they are unable to ascertain whether Marion M. Watkins is entitled to an estate in fee-simple, or some other kind of an estate in the premises, and that the 7 “therefore ask the assistance of this court in the construction of the third codicil of the said will.”

The complainants’ counsel contends that Mrs. Watkins acquired only a life estate, and the latter’s counsel insists that his client is possessed of an estate in fee-simple. I must decline to determine the issue, on the ground that this court is without jurisdiction, for two reasons — first, because it presents purely a question of legal title to lands, which must be solved in the law courts — Thropp v. Public Service Corporation, 93 Atl. Rep. 693 — and second, because the trustees do not present a case that entitled them to the guidance of the court, in the administration of their trust estate. They simply ask to be informed whether the devisee under the codicil owns the property devised absolutely, or only for life. They ask for no relief, and if I should venture an opinion as to the devisee’s title, I fail to see what decree could be made binding upon the parties, or controlling upon the trustees in the discharge of their fiduciary duties. In Hoagland v. Cooper, 65 N. J. Eq. 407, Chancellor Magie examined and settled the question of the jurisdiction of this court when called upon to construe wills. He says: “Mr. Pomeroy, indeed, declares that the doctrine in harmony with principle and sustained by the weight of authority in this country, is that the special equitable jurisdiction to construe wills is a mere incident of the general jurisdiction over trusts, and that a court of equity will never entertain a suit brought solely for the purpose of interpreting the provisions of a will without any further relief.” The chancellor gives instances in which the jurisdiction may be invoked, and adds that “in no case has it been asserted that the court may be asked and compelled to construe a will except as incident to some relief which may be afforded by a decree. It has been expressly held that the court will not construe wills for the sake of giving counsel and advice to the parties, but only for the purpose of giving positive directions for the action of the trustee.’’

Upon the argument, I stated substantially the above views, but, as both counsel offered to submit to the jurisdiction and urged me to express an opinion and decree the status of the parties, I have given the matter further consideration, which only strengthens my previous conviction that, under the frame of this bill, the subject-matter is not properly before me and that the, bill must be dismissed.

It may not be inappropriate to suggest to counsel that as Mrs. Watkins is in possession of the properly, and claims to be the owner of the fee, she may be able to vindicate her title as against the claims of the remaindermen; or, that the trustees, claiming the remainder, may have determined their rights by a bill under the statute entitled “An act to compel the determination of claims to real estate in certain cases, and to quiet the title to the same” (4 Comp. Stat. p. 5399); and the further act entitled “An act to compel the determination of claims to estates in remainder in certain cases, and to quiet the title to the same.” 4 Comp. Stat. p. 5404.


text:
    Wallace I. Laing v. Frank Durand, executor, et al.
    [Submitted March 15th, 1915.
    Decided April 10th, 1915.]
    1. The delivery of a savings bank book with intent to make a gift of the deposit transfers title to the fund.
    2. The owner of a savings bank deposit handed the bank pass-book to her daughter-in-law, with directions to give it to her husband, saying that she wanted him to have the pass-book and the money that was in the bank. The daughter-in-law thereupon delivered the book to her husband and told him what his mother had said. Subsequently his mother told him to make good use of the money, as it was all he would get. —Held, that the transaction constituted a valid gift of the fund.

      3. On a bill to determine the ownership of a savings bank deposit claimed by complainant as a gift inter vivos from his mother, in whose name the deposit stood, by delivery of the pass-book, evidence examined and Held to show a donative intent.
    4. TYlien a savings bank book stood in the name of a husband and wife, and the husband died, leaving the wife as executrix and sole legatee, it will be presumed, after administration, that she has reduced her testator’s interest in the deposit to her own possession, and could make a valid gift thereof.

      Mr. Charles E. Cook, for the complainant.

      Messrs. Hyer & Armstrong, for the defendants.
   Backes, V. C.

This litigation involves the ownership of a bank deposit of $783.05, which the complainant claims by a gift inter vivos. The fund is on deposit in the “Special Interest Department” or savings account of the Asburv -Park and Ocean Grove Bank, in the name of “E. Laing or Sarah Emily Laing.” The rules and regulations for depositing and withdrawing moneys are printed in the pass-book, the sixth one of which reads: “No deposit can be received or payment made under any pretence whatever, unless the depositor produces either -liis or her book at the counter of the bank.” There seems to be no requirement for a draft in making withdrawals. Deposits 'and withdrawals are entered in the pass-book as they are made.

The gift, it is claimed, was made by the delivery of the passbook, with donative intention. It is regarded, as the settled Jaw of this state, that the delivery of a savings bank pass-book, without more, with intent to make a gift of the deposit, carries with it the fund. Van Wagenen v. Bonnot, 72 N. J. Eq. 143, concurred in by the court of errors and appeals, 74 N. J. Eq. 843; Cook v. Lum, 55 N. J. Law 373; Ridden v. Thrall, 125 N. Y. 572.

The undisputed facts in the case are: The donor, Sarah Emily Laing, was the mother of the complainant. At her request, in 1905, he took his family, consisting of wife and son. to live with his parents at Asbury Park, where they made their home until the mother died, in July, 1913. The father predeceased the mother some nine months. The parents were old and needed the help and comfort of the son and his wife. The mother at all times managed her household, the son’s wife doing the housework, while the son paid $4 a week for his board. The mother had been ailing for a year, and realizing that her days were few, she, four months before her death, sent for her lawyer, Mr. Durand, the administrator-defendant in this case, and had him prepare a deed conveying the homestead, and the furniture in it, to the complainant, and a testament by which, she gave the rest of her estate to her- daughter and the complainant’s son by a first wife, in equal shares. The deed was sent for record, and upon its return, about a month afterwards, and the next night after the postman left it, the mother called her daughter-in-law upstairs to her room and said to her: “Minnie, get me that black skirt;” she took out of it a key and said, “Minnie, go over to my trunk and hand me over that tin box in there.” She unlocked the box, leaving the key in it, took out the deed, and said, “Minnie, I give this property, all the furniture and things in it” —to the complainant. She then took out of the tin box the bank pass-book and said:

“This bank book and the money that is in the Ocean Grove and Asbury Park Bank I want Wallace [the complainant] to have. I know he hasn’t any money and he will need it.”

She then put the deed and bank book, back in the tin box, closed the lid and handed it to the daughter-in-law, saying, “Give this to Wallie.” The daughter-in-law took the box to her room, and upon her husband’s return she handed it to him and told him what his mother had said. He looked the contents over and the next morning when his mother came down to breakfast, he thanked hex for the deed and bank book, and she said: “Take good care of those things and make good use of the money, for that is all you are going to get.” The box and contents ever after that remained in the possession of the complainant, the wife storing it in her shirt-waist box in her room. The proof of the ceremony attending the gift rests solely upon the testimony of the complainant’s wife, it is true, but when taken in connection with corroborating circumstances in the case, it is entirely satisfactory and convincing and meets all of the requirements of the law for the making of a valid gift. Stevenson v. Earl, 65 N. J. Eq. 721.

To a woman confidant, a disinterested witness, the donor said that she knew she had not long to stay here; that she had not settled her personal affairs, and she could not die and feel that she had left her son and her grandson Harold unprotected; that she wanted to be just with all parties and didn’t want a legal.contest afterwards. To this lady, who was visiting the donor, she said: “I want Wallie to have the property (the homestead) and the bank book. He has no money to start with.” The following day the witness was taken upstairs, when the donor took out of her closet a sealskin coat and said:

“I want my daughter-in-law', Minnie, to have this, and the clothes; she has been a good daughter to me, and I want to repay her. I couldn’t have kept house without her, and I want her to have these things.”

She then went to her trunk, unlocked it with a key, picked up numerous articles that she wanted disposed of to different ones, and from the bottom of the trunk she took her tin box. She opened it with a kejf and showed the witness the bank book in question, saying that she wanted it to go to her son Wallace, and that she wanted him to have the box and its contents. The witness, then, at the request of the donor, went for Mr. Durand, who came and drew the will and the deed, as already stated. This testimony is very persuasive of a design to make a gift in' the way it afterwards was made. We also have this: The donor was intent upon dividing her property equally between her two children, and the allegation in the bill is that the property devised and bequeathed to the daughter and grandson exceeds in value, considerably, the property given to the complainant. This- is not denied, nor was there any proof to the contrary. There is nothing in the testimony indicating that influence was exerted upon the donor to malee the gift, nor is there anything in the history of the case from which undue influence may be presumed or inferred. It is conceded by the defendants that the donor, wlio was nearly eighty years of age, was, up to the time o£ her death, possessed of all her mental faculties, and from the evidence in the case it is apparent that she was master of her own affairs to the last.

. The point is made that because the bank book stood in the ñame oí “E. Laing or Sarah Emily Laing,” a gift of the fund could not be made; the argument being that Elden Laing, the donor’s husband, was a common owner with the donor, of the fund, and that his share thereof belonged to his estate. Elden Laing left a will, in which the donor was the sole legatee and executrix. She administered the estate, and it is to be assumed that she reduced whatever interest her testator had in the deposit to her own possession.

I will advise a decree in 'favor of the complainant, without costs.