text:
    In the matter of the taxation of The United States Car Company.
    [Filed July 7th, 1899.]
    “An act to provide for the imposition of state taxes upon certain corporations, and for the collection thereof” (Gen. 8tat. p. 3335), requires that all corporations incorporated under the laws of this state, with certain specified exceptions, shall pay an annual license fee or franchise tax of one-tenth of one per cent, on all amounts of capital stock issued and outstanding, &c. — Held, that a license fee assessed against an insolvent corporation by virtue of this statutory provision is entitled to priority in payment out of the assets in the hands of the receiver of said corporation, notwithstanding the fact that such a license fee was imposed upon the corporation subsequent to the appointment of the receiver, and that the latter had not, since his appointment, exercised any of the corporate franchises.
    On appeal from a decree of the chancellor, whose opinion is reported in Crews v. United States Car Co., 12 Dick. Ch. Rep. 357.

      Mr. Samuel E. Grey, attorney-general, for the appellant.

      Messrs. McGee, Bedle & Bedle, for the respondents.
   The opinion of the court was delivered by

Gummere, J.

This is an appeal from a decision of the chancellor, affirming the rejection by the receivers of the United States Oar Company . (an insolvent corporation) of the claim of the State of New Jersey to be paid the amount of a state tax assessed against the company, under the provisions of the miscellaneous corporation tax act, subsequent to the entry of the decree of insolvency and the appointment of the receivers.

Section 4 of the act under which the assessment was made, after providing for the imposition of a license fee upon certain specially designated corporations, among which the United States Oar Company is not included, declares that “all other corporations incorporated under the laws of this state, and not herein-before provided for, shall pay an annual license fee or franchise tax of one-tenth of one per centum on all amounts of capital stock issued and outstanding,” &c.; and section 6 enacts that “such tax shall be a preferred debt in case of insolvency.” Gen. Stat. p. 8335.

The receivers in the present case have not in their hands assets sufficient to pay those debts of the corporation which existed at the time of their appointment, nor have they continued the business of the corporation in any wajr, nor exercised any of its franchises. The question presented for decision by this court is whether under these circumstances the state is entitled to priority in payment, out of the assets in the hands of a receiver, of a tax assessed against the corporation, after his appointment.

In the court below it was considered that the liability of a receiver to pay such tax, to the detriment of the general creditors, depended upon whether the franchises of the company were a valuable asset in his hands, and whether he continued to use them, after his appointment, for the benefit of the creditors and stockholders of the corporation, and, reaching the conclusion that in the case now before us the corporate franchises were valueless, and it being admitted that they had not been used by the receivers, the court decreed that the tax assessed was not payable out of the funds in their hands until after all indebtedness existing at the time of the appointment of the receivers was discharged.

We cannot concur in this view. Although the statute designates an imposition of this kind as a license fee or franchise tax, it plainly is not a tax upon corporate franchises. In fact it is not, strictly speaking, a tax at all, nor has it the elements of one. It is in reality an arbitrary imposition laid upon the corporation, without regard to the value of its property or of its franchises, and without regard to whether it exercises the latter or not, solely as a condition of its continued existence. The state, in creating a corporation, has the right to impose upon its creature such conditions as the legislature, within constitutional limits, may deem proper, and the acceptance by the corporation of the franchises, powers and privileges conferred upon it binds it to the performance of those conditions so long as it continues to remain in possession of those franchises, powers and privileges, and the conditions themselves remain unrevoked by the legislature. And this is so without-regard to the solvency or insolvency of the corporation, the value or want of -value of its franchises, or whether or not it is exercising them, either by its officers and directors or through a receiver. The sole test, in determining its liability to comply with those conditions, so long as they remain unrevoked, is the existence or non-existence of the corporation.

Applying this test, it is quite clear that the so-called tax was properly imposed in the present case. At the time of its imposition, although the company had been decreed to be insolvent, no decree of dissolution had been pronounced against it, but, on the contrary, its corporate life was continued for the benefit of its creditors pending the final distribution of its 'assets.

But it is contended on behalf of the receivers that even if it be considered that this “tax” was properly laid, still, by force of the statute under which it was assessed, it became “a debt due to the state when determined,” and that, as it was not “determined” until some months after the receivers were appointed, it was, distinctly, not a debt of the corporation at the time of their appointment, and consequently is not payable out of the assets in their hands, for the reason that, by their appointment, such assets were converted into a trust fund for then existing creditors. In support of this contention Hollins v. Brierfield, 150 U. S. 371, and Cook Stoke. (4th ed.) § 9, are cited.

It seems to us, however, that this contention cannot prevail without disregarding the statutory provisions which regulate the subject. Section 6 of the act under which this so-called tax is laid declares, as has already been stated, that such tax shall be a preferred debt in case of insolvency,” and section 68 of the Corporation act (P. L. of 1896 p. 209) provides that

“all the real and personal property of an insolvent corporation, and all its franchises, rights, privileges and effects, shall, upon the appointment of a receiver, forthwith vest in him, and the corporation shall be divested of the title thereto.”

It is manifest, therefore, that when the “tax” is assessed against an insolvent corporation, after the appointment of a receiver, the fund out of which its payment must be preferred is that which is in his hands, for there is no other fund upon which it can be charged, and, consequently, in no other way can each of these two statutory provisions be given full force and effect.

The decree appealed from should be reversed, and the receivers directed to pay into the state treasury the amount of the disputed tax.

For reversal — Depue, Van Syckel, Dixon, Garrison, Lippincott, Gummere, Ludlow, Bogert, Vredenburgh — 9.

For affirmance — The Chibe-Justice, Collins, Hendrickson, Nixon, Adams — 5.


source: Caselaw Access Project

author: Voorhees, J.

license: Public Domain

text:
    Willis M. Hand et ux., complainants and respondents, v. Henry J. Hand et al., defendants and appellants.
    [Filed June 20th, 1900.]
    1. A devisee under a will is not required to make an equitable election before demanding his right as heir to lands of which the testator died intestate, where the will does not show that it was the intention of the decedent to preclude such lieir from making such claim.
    2. A defendant who has failed to file his pleadings within the time required by law and the rules and practice of the court of chancery, and a decree pro oonfesso has been entered, cannot, under a permission to answer, file a demurrer to the bill of complaint.
    On appeal from an order advised by Vice-Chancellor Grey, striking out parts of an answer to a bill for partition, in which no opinion or reasons were filed.

      Mr. Samuel II. Richards, for the appellants.

      Mr. Leivis Starr, for the respondents.
   The opinion of the court was delivered by

Voorhees, J.

James C. Hand, a resident of Philadelphia, died seized of three several tracts of land situate in Cape May City, New Jersey, leaving a last will in writing, signed by himself, but without subscribing witnesses. Two executors were named in this will, and a power of sale was therein set forth, directing the executors to sell any and all his real estate, except a house and lot in Philadelphia. The will also gave to the executors the sum of $20,000 in trust for the benefit of the complainant Wiliis M. Hand. This will was duly proved in the city of Philadelphia, and an exemplified copy thereof filed and recorded in the office of the surrogate of Cape May county. One of the executors having died, Henry J. Hand, as surviving executor, in order to settle the estate, undertook to convey the premises at Cape May under the power of sale set forth in the will. Such conveyance was made, and at the time of filing the bill of partition, one Whitney claimed to be seized of lots numbers 2. and 3, and Hughes and Reeves of lot number 1, as grantees of the surviving executor. A mortgage of $2,000 had been executed by said grantees to one Garretson upon lot number 1. The above facts are set forth in the bill of complaint with an allegation that the will was not executed with the formalities required to pass real estate, or give dominion over the same in New Jersey; that the decedent died intestate as to the lots at Cape May; that the same descended to and vested in Henry J. Hand, Willis M. Hand and Mary L. Wilkins, his only children and heirs-at-law, in equal shares as tenants in common in fee, and that the surviving executor conveyed no further or greater estate in said lands than that which vested in him as one of the heirs-at-law of James C. Hand.

The defendants failed to put in any defence to this bill within the time allowed by law. and the rules and practice of the court of chancery, and a decree pro confesso was duly entered against them. They afterwards applied to the court for leave to answer the bill, and upon such application the following order was made:

“That the decree pro confesso be opened to the extent of allowing the defendants Whitney, Reeves, Hughes and Garretson to file answers in said cause on or before the fifth day of January, instant, with the privilege to the complainant, without further notice, to move to strike out any or all such answers on the eighth of January, instant,” &c.

Under this permission, certain of the defendant grantees joined in an answer to the complainant’s-bill wherein, after admitting the principal allegations of the bill, they insisted that the complainant could not invoke the equitable powers of the court unless he should first make compensation to the said defendants to the extent of the value' or interest of which they would be deprived if the complainant secured the relief prayed for; that the complainant being the beneficiary of the trust, fund created by said will, a part of which fund they claimed had come from the proceeds of the attempted sale of said lands, he should be required to make an equitable election whether to take under the trust, or to abandon the same and take as heir in these lands.

And further, that the bill was multifarious in that the defendants did not have the same interest in each of the tracts of land, and claimed the same benefit of such defence as if they had demurred to the bill.

The order allowing the defendants to answer after a decree pro confesso had been entered, gave the complainant the right to object to the whole or any part of such answer. Under this the complainant’s solicitor applied to the court, and, after argument in the presence of the solicitor of the defendants, the following order was made: “That all those portions of the answer which in any way refer to or are founded upon the claim of legal or equitable rights of or in the answering defendants under the power of sale conferred upon the executor of James O. Hand, deceased, in the latter’s will, to wit, all of the paragraphs numbers three, nine, ten and fourteen, and parts of paragraphs numbers four, six and thirteen, be and the same are hereby struck from said answer, with costs.”

From this order an appeal has been taken to this court.

Two question are raised — is the complainant required to make an equitable election, and should the defendants be entitled to a demurrer?

The complainant is not required to make an equitable election. Nothing in the testator’s will shows that he intended to preclude his son, the complainant below, from sharing as an heir to the lands in dispute, although the will may have been valid in Pennsylvania, it was not so executed as to pass title or confer power over real estate here. Lord Chancellor Hardwicke, in 1749, laid down this rule in Hearle v. Greenbank, 1 Ves. Sr. 299, and it has been followed continuously ever since. Lord Eldon spoke of this principle as being long settled in Sheldon v. Goodrich, 8 Ves. Sr. 482, and said: “It was better the law should be certain than that every judge should speculate upon improvements in it.” In our own courts this rule was decided by Chancellor Green in Kearney v. Macomb, 1 C. E. Gr. 189; Pratt v. Douglass, 11 Stew. Eq. 516.

The defendants ,were not entitled to the benefits of a demurrer. They had failed to file any defence within the time allowed by law and the practice of the court. A decree pro confesso had been entered, and they were only allowed to come in by permission of the court. This permission extended only to answering the bill. They were, therefore, limited to the defences mentioned in such permission, and could put in no further or other defence without the further order and permission of the court.

The order of the court of chancery appealed from should be affirmed.

For affirmance — The Chanceklob, Chief-Justice, Yan Syckel, Dixon, Lippincott, Gummere, Ludlow, Collins, Bogert, Hendrickson, Adams, Yredenburgh, Yoorhees — 13.

For reversal — None.


author: Magie, Chancellor.

text:
    The New Jersey Junction Railroad Company et al. v. Aaron N. Woodward et al.
    [Filed October 27th, 1900.]
    Upon an order to show cause heard on bill, answer and affidavits, complainants, who are railroad companies, ask an injunction restraining defendants from interfering with their occupation of a small tract of land upon which they had laid a track in extension and continuation of a freight siding upon land admittedly owned by them. Oomplainants had a paper title to said small tract and claimed to be its owners. Defendants also had a paper title thereto and claimed to be its owners.—Held, that a case for interference by injunction was not made out: (1) because although complainants are common carriers of freight and have used the track in question from time to time in the performance of their duties as common carriers, its use is not essential to the performance of such duties and the deprivation of its use will not seriously impede them in such performance, and complainants do not offer' to take the land or to proceed to condemn defendants’ interest therein; and (2) because it appears by the affidavits and without contradiction that the track in question had been laid on said land by the license of defendants’ predecessor in title who was in possession thereof, which license had been revoked and the respective claimants to ownership had been thereby remitted to their original status, and it did not appear that what defendants proposed to do upon said land would cause irreparable injury to complainants or any injury for which they would not be adequately compensated in an action at law.

      Mr. James B. Yredenburgh, for the order.

      Mr. James E. Howell, contra.

   Magie, Chancellor.

I have reached the conclusion that the order to show cause should be discharged and the ad interim restraining order should be vacated.

The complainants, or one of them, have a paper title to the land in question. The defendants, or some of them, also have a paper title to the same land. There has obviously been an overlapping of surveys and recorded maps involving that land, and which party has the better title is a question which cannot be determined in this court, but must be settled in an action at law.

While this court cannot adjudicate upon the legal title of the parties, it may, and often does, interpose its restraining power to protect the possession of one party pending resort to the law courts for an adjudication as to title. As was said by Vice-Chancellor Van Fleet: “There are cases in which it is the duty of the court of equity to interpose for the protection of the property in dispute pending the determination of the litigation of a legal title. In such cases the court does not take jurisdiction for the purpose of settling the rights of the parties, but simply to preserve the property until the legal title to it is established.” Fulton v. Greacen, 9 Stew. Eq. 216.

Is there a case presented which shows that a duty devolves on this court to stay defendants from, proceeding to do what they admit they design to do if not stayed?

By the pleadings and affidavits used on the hearing of this •order it appears that the Hew Jersey Junction Railroad Company, in 1887, put upon the disputed tract a line of rails, in continuation of a siding built upon land concededly belonging to it, and that those rails were used to station freight cars and deliver freight therefrom.

It further appears that the tracks were laid upon the disputed land at the request, and therefore by the license, of one Fearis, frOmwhom defendants claim title, and were first used to deliver to him upon that land carloads of stone, in which Fearis,was dealing, using the land adjoining, which was concededly his, for its storage. The tracks were also used by .complainants for the delivery of general freight from their freight cars.

It further appears that defendants having acquired Fearis’ title, have lately torn up complainants’ tracks, and its “butting block” upon the disputed land, and cut in two and removed therefrom the one-half of a freight ear of complainants, which was placed thereon, and that they have driven piles and threaten to erect a building thereon which will entirely exclude complainants from any use of the land.

It is insisted that the case so presented falls within the sixth head in the classification of the jurisdiction of chancery in respect to injunctive relief in such cases, announced in the opinion of Mr. Justice Dixon in Hart v. Leonard, 15 Stew. Eq. 416. Under that head is classified “cases where the object of the bill is to prevent an injury which will be destructive of the inheritance, or which equity deems irreparable, i. e., one for which the damages that may be recovered according to legal rules do not afford adequate compensation.”

If the parties were owners of adjoining lands, disputing over the true boundary line between them, the invasion of one over the boundary claimed and possessed by the other, and the threat to erect a building thereon, would justify an injunction. Southmayd v. McLaughlin, 9 C. E. Gr. 181.

But complainants assert a right to relief by a preliminary injunction not merely as adjoining owners whose boundary line is in dispute. They are common carriers of freight and passengers. The Few Jersey Junction Railroad Company built the road under proper authority for that purpose. The other complainant, by like due authority, holds and operates the-road under lease. If the part of the siding lying upon the-disputed land were essential, or only reasonably required for the performance of complainants’ duty as common carriers, a strong case would be made for their protection pending the-determination of a proceeding at law to determine the legal title claimed by them.

For do I think that an injunction should be withheld upon defendants’ claim that by their acts in removing the track they have taken possession of the disputed tract. If eomplainantswere in lawful possession, defendants’ acts were mere trespasses. But those acts, and acts which they threaten to do will,» temporarily at least, prevent the use of the tracks which complainants have heretofore had for nearly thirteen years. The-case does not fall within the class of trespasses and possession acquired thereby, dealt with in Breckenridge v. Delaware, Lackawanna and Western Railroad Co., where the possession acquired in no respect hindered or impeded the operation of the railroad. 10 Dick. Ch. Rep. 141; S. C., 10 Dick. Ch. Rep. 598; 11 Dick. Ch. Rep. 595.

But the affidavits fail to convince me that what defendants-have done and threaten to do will seriously interfere with complainants’ performance of their duty as common carriers. The siding on complainants’ land will amply enable them to-perform their duties.

It has not been contended that complainants desire to exert any power to condemn the disputed land in case it be determined that they have no legal title thereto, if they possess-such power. There is nothing in the bill making such claim to relief.

Whether complainants be considered as owners and possessors-of land, or as common carriers using land now invaded by defendants, the ease presented must be disposed of by considering how their possession was acquired. Upon the uncontradicted affidavits of defendants, the track was laid npon the .disputed land by the mere license of one who claimed to be' .the owner, and who had such possession thereof as was possible. It was low marshy land, which had been filled in by him, and the land claimed by him was marked by stakes. The license •conferred by him was, of course, revocable, and it is plain that it was revoked and complainants were directed to remove the tracks.

Upon these facts, complainants’'possession was by a license now revoked, and to protect a possession thus acquired, I think .•an injunction should not issue. The fact that the occupation ■was by license will not prevent complainants recovering possession, if they establish the title at law, but it justly deprives them of any claim to the protection of a possession which was .thus acquired and the license justifying which has been withdrawn.

It may be added that it is not perceived that any injury ■will be inflicted on complainants which will not be adequately compensated in an action at law. If successful, they will be able to compel defendants to remove any building they may have erected on the land, and collect mesne profits for its occupation.

The order to show cause must be discharged, the costs to abide the event of the suit.


author: Mache, Chancellok.

text:
    Fillipp Kreissl v. The Distilling Company of America et al.
    [Filed October 29th, 1900.]
    1. Stockholders in an incorporated company are entitled to have other owners of stock therein exercise and express their judgment in respect to the control and management of the affairs of the corporation, except in cases in which, by legislative authority, stockholders may delegate their duty to others.

      2. Under statutes authorizing stockholders to vote by proxy at the meetings of stockholders, the voting power, including the temporary power to exercise and express judgment on proposed measures, may be confided to the proxy or attorney appointed. To this extent the voting power of stock may be severed from its ownership. Other stockholders, however, may rely upon the grantor of such proxy to retain the power to exercise and express his own judgment by revoking the grant and resuming his right to do so.
    3. If stockholders, after consideration, determine and adjudge that a certain plan for conducting and managing the affairs of the corporation is judicious and should be adopted, they may, by powers of attorney, or the creation of a trust of their stock, so combine their powers as to provide for - the execution of the plan so determined upon. If stockholders combine by either mode to entrust and confide to others the formulation and execution of a plan for the management of the affairs of the corporation and exclude themselves by acts irrevocable for a fixed period from the exercise of their judgment thereon, or if they reserve to themselves any benefit to be derived from such plan to tl}e exclusion of other stockholders who do not come into the combination, the agreement to so combine is contrary to the duty owed to other stockholders and contrary to public policy.
    - This bill was filed by Eillipp Kreissl as a stockholder in a corporation of this state known as the Distilling Company of America.
    It sets forth an agreement made June 9th, 1900, between the owners and holders of shares of capital stock in the Distilling Company of America who should subscribe and become parties thereto, therein called the “stockholders,” parties of the first part; William L. Bull, William E. Harrity, Rudolph Keppler, Alvin W. Krech and Richard Sutro, therein called “the committee,” parties of the second part; the Mercantile Trust Company, therein called “The Trust Company,” party of the third part, and August Belmont, John L. Cadwallader, T. Jefferson Coolidge, Jr., William E. Harrity and Alvin W. Krech, therein called “the trustees,” parties of the fourth part.
    The agreement recites as follows:
    “Whereas the parties of the second part are a committee acting at the request of holders of shares of the capital stock of the Distilling Company of America, for the purpose of instituting an inquiry into the affairs of the company, and recommending such action as might be for the benefit of the stockholders, and ■ whereas said committee has made a report to the stockholders, bearing date June 1st, 1900, a copy of which is hereto attached and made part hereof, and has recommended that the stockholders deposit with the trust company, subject to the order of fhe committee, their certificates of stock, for the purpose of transferring the same to the trustees, who for the period of five years from the 1st day of July, 1900, shall be the owners thereof under the provisions of this agreement.”
    The agreement also contains, among others, the following provisions:
    “1st. The stockholders respectively agree that they are the owners and holders of shares of stock of the said company to the amount at par respectively set opposite their names or deposited as hereinafter provided; that they will at once deposit with the trust company, in accordance with and subject to the terms of this agreement, at its office in the city of New York, the said stock to be disposed of as herein provided, and will execute and deposit with the said trust company transfers of said stock and any powers of attorney or other documents necessary to transfer the legal title to said stock to said committee, in order to empower said committee to fully carry out the provisions and exercise the authority set forth in this agreement, and will accept in place of said stock negotiable certificates of deposit signed by the said trust company, in suitable form, to be prescribed by the said committee.
    “2d. The committee shall cause said stock to be' transferred on the books of the company into the names of the trustees when a majority of the entire capital stock shall have been deposited, or sooner if the trustees shall request the same, and receive from the Distilling Company of America a single certificate, or certificates, in such amounts as may be convenient, in the names of the trustees' in lieu thereof, such certificate or certificates to be lodged with said trust company, subject to all the terms and conditions of this agreement.
    “3d. The committee is authorized and empowered to consider and present to the trustees the best means in their judgment of providing the said Distilling Company of America with such additional capital as may in the opinion of the trustees be necessary for the purposes of said company, and for the issue of such bonds, mortgages or other obligations as may be deemed advisable; provided, however, that such means so to be proposed shall not involve the assessment of any sum of money to be paid by the said stockholders. -When the committee shall have presented the said subject, and the same shall bo agreed 'on by the trustees, with such modification or changes as may be proposed thereto by the trustees, the same shall be signed by the trustees or a majority of its members and shall be filed or lodged at the office of the trust company in the city of New York, with which copies shall be left for distribution to the stockholders, and á brief publication of the fact of the adoption of the best means in their judgment referred to, shall be made at least twice in each week for at least two weeks, in two newspapers published in the city of New York, and one each in the cities of Boston, Philadelphia, Louisville, Cincinnati and Chicago; and such lodgment of such plan, and sucli publication thereof shall be conclusive notice to all stockholders and to all holders of certificates of deposit, of the adoption thereof; provided, however, and it is made an express condition of the execution hereof by the stockholders, that any holder of such certificates of deposit who may not agree to such plan within fifteen days after the expiration of such publication, may withdraw from this agreement and be entitled to a return of his said stock by filing with said trust company, at its office in the city of New York, written notice of his election so to do; whereupon said holder shall be released from the obligations of this agreement and from such plan, and shall be entitled to a return of his stock and receive it upon surrender of the certificates of deposit issued for the same without deduction for expenses or otherwise; but as to every certificate holder who shall not within said period make and file such notice in writing, his assent to and ratification of such plan shall be conclusively and finally assumed, conferred and given, and shall be irrevocable; and provided further, however, that the trustees shall have liberty to proceed to execute such plan and this agreement, irrespective of the parties so withdrawing, and such withdrawing parties shall have no further interest of any kind under this agreement or such plan, except upon such terms as the trustees may prescribe.
    “4th. The trustees are hereby given full authority and power to carry out and put into effect the plan to be adopted by it as aforesaid, and to take any and all steps necessary to such plan, or which in its judgment may tend to promote the same, subject to the rights of the holders of the certificates of deposit to dissent therefrom and withdraw from this agreement as hereinbefore provided.
    “5th. This agreement is made upon the condition that the stockholders of said Distilling Company of America who do not sign this agreement, or do not deposit their certificates of stock in accordance with its terms, shall have no rights and be entitled to no benefits under the same, except that the committee is empowered to extend the time in its discretion, in which holders of stock may assent to and come in under this agreement or the plan to be hereafter adopted, and to admit such stockholders to participation in the benefits thereof upon such conditions and penalties as the committee and the trustees may decide.
    “8th. This agreement and the means adopted for raising additional capital shall respectively become binding and effective whenever a majority of all outstanding stock shall assent thereto, or whenever, in the judgment of the trustees a sufficient number of stockholders have signed this agreement or deposited their stock.
    “12th. The trustees agree that they will vote upon the shares of stock standing in their names at all meetings of the stockholders of the Distilling Company of America for such directors and for such measures as shall in their judgment be for the best interest of the stockholders.”
    The bill further charges that the parties are proceeding to perform and carry out this agreement, and that the trustees propose to vote upon the stock so transferred to them, at the next election, for directors of said distilling company. The bill charges that the agreement in respect to the above provisions and others, infringes upon his rights as a stockholder in .said company.
    To this bill the Distilling Company of America, and the persons named in the agreement-as trustees were made parties defendant. Among the prayers of the bill was one for an injunction restraining the trustees from voting upon any of the .stock deposited with the Mercantile Trust Company under the .agreement, at any meeting of the stockholders of the company, except to adjourn the same from -time to time.'
    On filing the bill and its accompanying affidavits, an order to ■show cause was allowed.
    On the return of the order the defendants filed answers and affidavits. The answers admitted the execution of the agreement and the purpose to carry it out.
    By the affidavits it appears that out of an issue of stock amounting at par to about $75,000,000, stock amounting at par to about $54,000,000 has been deposited with the said trust .company under the agreement.

      Mr. Robert R. McCarter and Mr. James E. Rowell, for the order.

      Mr. Richard V. JAndabury, contra.

   Mache, Chancellok.

The complainant, as the owner of eighty-five shares of preferred stock and four hundred and twenty shares of common ■stock of the Distilling Company of America, each share being of the par value of $100, seeks relief which will affect stockholders of the company owning shares of both kinds of stock .amounting at par to about $54,000,000, but of a total of stock issued amounting at par to about $75,000,000. The holdings •of complainant are therefore comparatively small; but, however insignificant his interest may be, he is entitled to relief Against inequitable conduct which does or may inj uriously affect his interest. The comparatively small amount of interest should,, doubtless, lead the court to scrutinize his claim with care, and not to interfere with interests in the same property which are vastly greater, except it is necessary for his eventual relief upon the final hearing.

It is preliminarily objected that the bill is defective for want of parties. Two of the parties, namely, the Mercantile Trust Company and the committee who entered into the agreement, parts of which are set out in the statement prefacing this opinion, are not made defendants. It is not necessary to determine whether or not the omitted parties are necessary parties in the conduct of this suit. If the objection was raised by demurrer (and the answers so present it), it could be remedied by an amendment, and such an amendment would be ordered if necessary. But assuming them to be essential parties, and their omission to be objectionable, I do not think that the hand of the court should be stayed from affording present relief by a preliminary injunction, if such relief is essential to complainant’s protection, and in nowise affects either of the two absent parties. This conclusion is deducible from the action of the court of errors on approving the refusal of the chancellor to dissolve the injunction which had issued upon a bill which omitted a necessary party. Morgan v. Rose, 7 C. E. Gr. 583. The learned chief-justice who delivered the opinion of the court declared that the chancellor rightly exercised his discretion in refusing to withdraw, on this technical ground, the protective arm of the court. If, therefore, the complainant presents a case for a preliminary injunction against those who are parties and have answered, and such injunction in no respect affects those who may be necessary parties but have not been included, I think the discretion of the court would be properly exercised in allowing such an injunction.

I proceed, therefore, to the consideration of the question presented by this order. Since its solution involves, to a large extent, the right of complainant to the relief he prays, it seems that the cause might have been brought on for hearing and the whole matter considered upon bill and answer, because mo serious contest respecting the facts is exhibited.

Whatever deficiencies appear in making out the charges of the bill respecting the agreement in question and what .has been done under it by the affidavits annexed thereto, they are supplied by the frank admissions of the answers and the accompanying affidavits, which make clear the facts on which complainant bases his contention.

Those facts are that an agreement such as is set out in the bill was made and executed by all the parties; that the party of the first part consisted of stockholders of the Distilling Company of America who joined in the deposit of their certificates of stock in the manner prescribed therein; that stockholders holding stock to the par value of about $54,000,000 have done so, and that the several parties intend to proceed and perform the agreement. If carried out, the trustees may vote at the coming election for directors, fixed by the by-laws of the company for October 17th, 1900, and having a large majority of the stock, their vote thereon would elect directors.

In Taylor v. Griswold, 2 Gr. 222, the supreme court, in dealing with the question of the reciprocal rights and duties of shareholders of private corporations, established the principle that the obligation and duty of incorporators to attend in person at meetings of the corporation and execute the trust or franchise reposed in or granted to them, is implied in, and forms part of, the fundamental constitution of every charter in which the contrary is not expressed. They thereupon denied the right of such corporation to authorize any stockholder to vote by any power of attorney or proxy, unless power to do so had been expressly or impliedly conferred by the legislature. This conclusion was reached on the avowed ground that by the association of the individuals in such corporation, each associate was expected to exercise his judgment upon all measures which he and his associates could take respecting the enterprise, which judgment his associates might assume would be favorable to his own interest and consequently beneficial to their interest. The power to judge and determine upon such measures could not, except under legislative authority, be delegated to another.

Since the decision of the case referred to, the legislature .has conferred upon stockholders of private corporations, created by special laws or under general statutes, the power to appoint a proxy- to cast their votes. Notwithstanding this grant of legislative authority, questions have arisen as to the extent to which stockholders may confer authority upon proxies.

The principle of that case has been applied in this court in the determination of causes involving such questions. If the present cause is essentially the same as those in which this court has already acted, I should feel it my duty to apply the same principle, even if I doubted its applicability, which I do not.

In Cone v. Russell, 3 Dick. Ch. Rep. 208, Vice-Chancellor Pitney held void as against public policy, an agreement between stockholders of a private corporation, by which the owners of certain shares agreed with the owners of other shares to give the latter a proxy irrevocable for five years, and empower them to vote on the shares during that time, in consideration of which the latter parties agreed to so vote said shares as to procure the employment of one of the owners thereof as a manager of the corporation at a specified salary. This conclusion was reached notwithstanding the fact that relief by a declaration that the agreement was void was sought by one of the parties thereto, who was in pari delicto.

In White v. Thomas, &c., 7 Dick. Ch. Rep. 178, the same vice-chancellor had to deal with a case presenting the following facts: All the holders of the stock of a private corporation which had then been issued, entered into an agreement among themselves whereby their shares were transferred to a trustee, who issued to each stockholder an assignable trust certificate for the amount of his stock so transferred. By the agreement the trustee was required to so vote upon the shares that a majority of the directors should be elected upon the nomination of holders of certain certificates, being a minority of the whole number, and a minority of the directors should be elected upon the nomination of holders of certain certificates, being a majority of the whole number of such certificates. After discussing the question whether such an agreement could be sustained as to those entering into it, for a purpose which was declared to be proper, and pointing out the apparently insuperable difficulties in carrying out its provisions, the vice-chancellor found it unnecessary to decide its validity as to the parties to the agreement, while remaining the sole owner of the stock or the beneficial interest in the stock issued; but as to the complainant who had subsequently acquired shares of stock after-wards issued, and also some of the trust certificates representing original shares, he held that the agreement was unenforceable and void as contrary to public policy.

Some expressions in these opinions have led to the contention that the vice-chancellor pronounced invalid any scheme or device by which the power to vote upon stock was separated from the ownership. That such was not his view is apparent from his language in Cone v. Russell, where he says: “This conclusion' does not reach so far as to necessarily forbid all pooling or combining of stock where the object is to carry out a particular policy with a view to promote the best interests of all the stockholders; the propriety of the object validates the means and must affirmatively appear.” It is also apparent from the later decision of the same vice-chancellor in. Chapman v. Lee, 46 Atl. Rep. 591, where a bill was filed to set aside a power of attorney and proxy made by the complainant, conferring' upon defendant very extensive powers, and irrevocable for a specified period. The vice-chancellor held that the so-called proxies were included in an instrument which clothed defendant with ownership of complainant’s stock with power to sell or exchange it, or to organize a new dorporation, and in that ease to accept stock therein in place of complainant’s shares. It was held that defendant substantially became the owner of the stock as trustee for the complainant. Although the instrument did not set out the trust in detail, yet the court held that as such trust was set out in full in the answer, it could be taken as disclosing the purposes of the trust. Finding it established by the proofs that defendant had expended labor and money and had made contracts in reliance on the continued control of the stock, the vice-chancellor held that the agreement was not void and dismissed the bill. \ > ■" \, '

\ Under the statutes permitting stockholders to give proxies and under the doctrine of the cases in this court to which I have referred, I conceive it is impossible to maintain that a proxy which confides to the attorney thereunder the power to exercise his judgment in certain cases, and so separates the voting power from the ownership of the stock, is void per se. Tire principle may, doubtless, limit the power conferred to voting on certain questions and in a certain way. But if, as is customary, the power is unlimited, it must be exercised by the judgment and determination of the attorney on any questions which may be presented.

The power of revocation is deemed sufficient to protect the rights of other stockholders. If, however, the stockholder undertakes to make irrevocable his grant of power and to denude himself for a fixed period of the power to judge and determine and vote as to the proper management and control of the affairs of the corporation, then whether the grant of power is good or not must depend on the purposes for which it is given.

When the scheme devised does not embrace a grant of irrevocable powers by proxy, but seeks a similar object by the creation of a trust and the appointment of a trustee, to whom the title of the stock is conveyed, a like doctrine must be applied. If no provision is made for the conduct of the trustee, at least he would be bound to vote on the stock held in trust in accordance with the expressed wishes of the cestui que trust; but if the transfer of the legal title to the stock is made and accepted under an agreement of the stockholder which deprives him of all power to direct the trustee, and all opportunity to exercise his own judgment in respect to the management of the affairs of the corporation, then whether the transaction is open to the objection of other stockholders, as depriving them of the right they have to the aid of their co-stockholders, must be dependent upon the purposes for which the trust was created, and the powers that were conferred.

If stockholders, upon consideration, determine and adjudge that a certain plan for conducting and managing' the affairs of the corporation is judicious and advisable, I have no doubt that thej'' may, by powers of attorney, or the creation of a trust, or the conveyance to a trustee of their stock, so combine or pool their stock as to provide for the carrying out of the plan so determined upon. But if stockholders combine by either mode to entrust ancl confide to others the formulation and execution ■of a plan for the management of the affairs of the corporation, and exclude themselves by acts made and attempted to be made irrevocable for a fixed period, from the exercise of judgment thereon, or if they reserve to themselves any benefit to be derived from such a plan to the exclusion of other stockholders who do not come into the combination, then in my judgment such combination and the acts done to effectuate it, are contrary to public policy, and other stockholders have a right to the interposition of a court of equity to prevent its being put into operation.

The agreement in this case must be tested by these principles.

An examination of it discloses that it asserts the necessity" ■ of the corporation acquiring in some mode additional working capital. Erom the affidavits annexed to the answers, I think it established that notwithstanding the large assets of the company, additional capital is nevertheless deemed by the stockholders who have entered into the agreement to be judicious and necessary. To this extent the agreement indicates the judgment of those stockholders, but no plan for procuring such capital is disclosed as having been formulated or determined upon. On the contrary the formulation of such a plan is expressly entrusted to the trustees and the committee. Those stockholders, therefore, have expressed no judgment in respect to what plan should be adopted.

The respectable gentlemen who have become trustees under this agrément, detail in their answer the need of additional working capital, and the reasons why an agreement of the kind entered into might enable such capital to be procured. The motives that induced them to enter into the agreement and their present purposes in respect to its execution, are exhibited by the statements contained in the following paragraph of their answer, viz.:

“That in the early part of the year 1900 they hacl become more or less familiar with the affairs of the Distilling Company of -America, of its financial requirements and of the needs of the constituent companies which it controlled, for additional working capital. They found that the stock of the Distilling Company of America had continuously declined in the market; that the constituent companies had ceased paying divi- - dends and that doubt and suspicion was publicly entertained as to the-ability and integrity of the management. That it was represented to-them by holders of a large amount of the stock of said defendant company that no financial plan for providing the companies with additional capital could be successfully carried out unless the individuals or institutions-capable of ■ advancing such amounts of money as were required by the company for this purpose were assured of an. honest and conservative-management of such companies, coupled with a fixed policy for a period of years, and that such results could best be obtained through the instrumentality of a voting trust. These defendants were earnestly solicited by the holders of a very large amount of said stock to act as such voting • trustees, and their services were specially solicited for the reason that none of these defendants had been previously identified with the affairs or ■ management of the said defendant company or its constituent companies, and because they either were personally interested in the stock or represented in their individual or corporate capacity large holdings of said stock. With the exception of one of their members, none of these defendants had personal or business relations with the managing officials of' the Distilling Company of America and have not met nor conferred, either directly or indirectly, with the management of said company in reference to said voting trust; that they accepted their designation as votingv trustees absolutely free from any commitment or understanding with the-existing officers and directors in the belief that they could benefit the stockholders by controlling and providing capital for the purposes of the - company, and by exercising a supervision over the selection of directors ■ and officers of the defendant company and its constituent companies, and. by controlling such selection could secure a conservative and fixed policy during the existence of said trust. That these defendants do not intend, and it has never been their intention, to carry out any plan for the - rehabilitation of the affairs of said company which may be approved by them without first obtaining the approval of the holders of stock who have • deposited their shares under the voting trust agreement;”

but they proceed further to say,

“that although no actual plan for such purpose has yet been formally - settled by the committee or these trustees, various plans have been considered and are in contemplation, dependent upon the result of the examination of the affairs of the companies.”

It is obvious, however, that these statements in nowise limit" or restrict the trustees in the exercise of such powers as have • been conferred, or attempted to be conferred, by the agreement. in question.

But it is argued that the agreement is only tentative and the - stockholders who joined therein have reserved to themselves-the power, after the plan contemplated sho.uld be formulated and promulgated in the manner provided, to withdraw from the combination and receive back their stock. Such a provision is elaborately set out in the third article of the agreement. If this provision would have the effect of preventing the execution of the plan, this argument might perhaps be effective. But the proviso to that article renders the withdrawal of stock, even of all the combining stockholders, ineffective in preventing the execution of a plan devised by the trustees, because it expressly provides that the trustees shall have liberty to execute such plan irrespective of the parties so withdrawing.

It is further argued, however, that assuming that the trustees might thus proceed to execute their plan, its execution would require the co-operation of the directors of the company. I can conceive no plan which would not require the directors’ action. But in considering this argument, it must be remembered that the trustees by this agreement are empowered to vote upon the stock while remaining in their names, and the amount of stock controlled by them will undoubtedly secure the election of directors. It should also be remembered that a large majority of directors are to be elected at the approaching election. It will, therefore, be seen that if the trustees vote as required under this agreement, they will elect a controlling majority of the board of directors. While I should entertain no doubt that the gentlemen composing these trustees would not take advantage of withdrawing stockholders, and execute a plan they disapprove of, the fact that they are given express power to do so, and the power to elect the board of directors to co-operate with them, deprives the transaction of any tentative character and justifies its being pronounced contrary to public policy, in that it provides for a possible management of the affairs of the company during a fixed period of time, by the judgment and determination of others, and not by the judgment and determination of complainant’s associates in this corporation.

Bj the provisions of the fifth article of the agreement, stockholders who do not enter into it are expressly declared to be entitled to no benefits under it. Upon the argument, the meaning of that provision was not made clear. But 'it is evident that the parties .to the agreement conceived that assenting stockholders had an interest in carrying out this agreement which would not enure to the benefit of those who did not join in it. By the last clause of the proviso to article three this idea clearly appears. Whether the privilege of subscribing additional shares of stock issued, or taking bonds or obligations issued to raise additional capital was the benefit intended to be conferred on the assenting stockholders to the exclusion of the non-assenting stockholders, I can only conjecture. It is sufficient to say -that the agreement discloses an intent to exclude stockholders who do not enter into it from whatever benefits could be claimed thereunder. This, in my judgment, shows a combination contrary to public policy and one to which any non-assenting stockholder may object.

There are other criticisms upon this agreement which need not now be discussed. Upon the two points above named, it is open to objection and I think the preliminary injunction should issue restraining the trustees from voting on any stock acquired by the agreement, according to the terms of the prayer of the bill.


text:
    Fannie Turner v. James H. Davenport and Jesse C. Turner.
    [Filed November 26th, 1900.]
    1. The last clause of section 14 of the Married Woman’s act of March 27th, 1874 (Gen. Siat. p. 2013), declaring that nothing in the act should “enable husband and wife to contract with or to sue each other except as heretofore,” is not repealed by the amendatory act of June 13th, 1898. Gen. Btat. p. 2017.

    2. Compensation for services rendered by a wife to her husband, or to a firm in which her husband is a partner in a business conducted by him or his firm, under a contract of employment made between her and her husband, cannot be enforced by a bill in equity.

      Mr. Walter J. Knight, for the complainant ex parte.

   Magie, Chancellor.

The hill in this cause was filed by Fannie Turner, a married woman, by a next friend, against her husband, Jesse C. Turner, and one James H. Davenport. It seeks a decree requiring defendants to pay her certain sums of money. The relief thus asked is put upon the following charges, viz.: That the de-

fendants were partners in business, engaged in selling mantels, tiles, &e.; that Turner, complainant’s husband, was manager of the firm and actively employed in the business; that he engaged complainant to enter the service of the firm as a saleswoman; that no amount of compensation for such services was fixed but it was agreed that the complainant should be paid such compensation as others usually received for such services; that the complainant rendered such services for a long period, with the knowledge of Davenport and the other defendant, and that ■complainant thereby earned at least the sum of $10 per week. The bill further., claims a small amount to be due her for service rendered to the firm after she had quitted its employment as saleswoman, in making sales of its goods on commission, under the employment of her husband.

Service of the subpoena issued in the cause was duly acknowledged by solicitors in behalf of both defendants. No plea, answer or demurrer has been filed. A decree pro confesso and •an order directing complainant to produce proofs sustaining the allegations of the bill were therefore made.

Dpon the coming in of the proofs, application was made for a final decree, but the matter appearing to present a novel question, counsel for the complainant was' directed to submit a brief, ■which he has done.

The proofs substantially support the allegations of the bill, and in addition show that the sum of $10 per week is within the usual charge for such services as complainant rendered for the firm as saleswoman, and that the charge for commissions ■on sales is such as is usually paid to agents.

The contention of counsel in support of the decree asked for is thus presented. He concedes that no such employment would have raised a liability upon which an action at law could be maintained. He further concedes that the broad power conferred upon married women by section 5 of the “Act to amend the law relating to the property.of married women” [Revision],, approved March 27th, 1874 (Gen. Stat. p. 2012), did not extend to the employment in question so as to permit, any action at law thereon, because the grant was restrained by the-express declaration of the last clause of section 14, to the effect that nothing in the act should “enable husband and wife to-contract with or to sue each other except as heretofore.”

Such has been the uniform construction of the courts. Woodruff v. Clark, 13 Vr. 198; Farmer v. Farmer, 12 Stew. Eq. 211; Ireland v. Ireland, 16 Stew. Eq. 313; Wood v. Chetwood, 17 Stew. Eq. 66; S. C., 18 Stew. Eq. 869; Gould v. Gould, 8 Stew. Eq. 37; S. C., 8 Stew. Eq. 562; Brewster v. National Bank, 20 Vr. 231.

Counsel’s contention, however, is that the act amendatory of the Married Woman’s act, passed June 12th, 1895 (Gen. Stat. p. 2017), has repealed the last clause of section 14.

The amendatory act in question is designed to amend section 5 of the original act in two particulars. In the particular-now under consideration, the amendment is thus effected. The-original section read, “that any married woman shall, after the passing of this act, have the right to bind herself by contract in the same' manner and to the same extent as if she were-unmarried, which contracts shall be legal and obligatory and may be enforced at law or in equity,” &o.

By the amendatory act the words “with any person” were-inserted so as to make it read thus: “That any married woman shall, after the passing of this act, have the right to bind herself by contract with any person in the same manner and to the-same extent as if she were unmarried, which contracts shall be legal and obligatory and may be enforced at law or in equity.”

The amendments made were contained in the first section of the amendatory act. There was a second section which contained a repealer of all acts and parts of acts inconsistent therewith. The argument is that the insertion of the words “with, any person,” indicates a legislative intent to allow a married woman to contract with her husband as well as any other person, and so operates to repeal the restriction upon such a contract contained in the last clause of section 14.

The Married Woman’s act had been declared in this court not to have abrogated the ancient doctrine that husband'and wife are but one person in the eye of the law, whose contracts with each other were subjects of jurisdiction in the courts of equity alone. Alpaugh v. Wilson, 7 Dick. Ch. Rep. 424. The decree in that case was affirmed in the court of errors upon the opinion below. S. C., 7 Dick. Ch. Rep. 589.

If the construction contended for is adopted it indicates a legislative intent to alter the marital relation in this respect. They are thenceforth to be two persons, having unrestricted power to contract with each other. But another’ consequence must also follow. Not only may husband and wife contract with each other, but the wife'may have her action at law-against her husband; because if the restraint of the last clairse of section 14 has been withdrawn, she has the unlimited power conferred by section 5 in these words, “which contracts shall be legal and obligatory and may be enforced at law or in equity by * * * such married woman in her own name,” &c.

Upon this construction of the Married Woman’s act, it will follow that not only was complainant not required, as before, to resort to a bill in .equity to enforce contracts made with her husband, but a resort to equity was wholly inappropriate, because she had a complete remedy in an action at law.

That this legislation has produced such a radical change in the relation of husband and wife has not been generally recognized. The construction contended for is not admissible.

The effect of such amendments as are now under consideration has been considered both in the supreme court and in the court of errors. In the supreme court the doctrine laid down in Endlich on Statutes, in these words, “a statute which is amended is thenceforth, and as to all acts subsequently done to be considered as if the amgndmént had always been there, and the amendment itself so thoroughly becomes part of the original statute, that it must be construed in view of the original statute as it stands after the amendments are introduced and the matter superseded by the amendments eliminated/’ was approved as a correct expression of the law in Farrell v. State, 25 Vr. 421.

The doctrine thus stated was spoken of by Mr. Justice Depue as the undisputed rule in his opinion in the court of errors in Barnaby v. Bradley and Currier Co., 31 Vr. 158.

Applying this doctrine it is obvious that the amendments introduced into section 5 of the Married Woman’s act in 1895, did not repeal the last clause -of section 14 prohibiting husband and wife from making contracts with or suing each other except as heretofore. Vice-Chancellor Emery has reached the same conclusion and expressed it in a memorandum in First National Bank v. Albertson.

But this conclusion does not dispose of the case under consideration. Eor, if the contract of a wife with her husband, set up and proved in this case, is not one included in the grant of contractual power contained in section 5 as amended in 1895, it may yet be enforceable in equity. Whether enforceable or not will depend upon whether it was a contract which, before the passage of the Married Woman’s act, a court of equity would recognize and enforce although made between husband and wife.

Equity will require a husband to account for the principal of his wife’s estate received by him (Jones v. Davenport, 17 Stew. Eq. 33; Wood v. Chetwood, 17 Stew. Eq. 64; S. C., 18 Stew. Eq. 369), and a wife to reimburse a husband from her separate estate for moneys loaned her or applied by him for the benefit of her separate estate. Healey v. Healey, 3 Dick. Ch. Rep. 239. A firm of which the husband was a member may be held liable in equity to a wife who had loaned money to the firm. Gould v. Gould, 8 Stew. Eq. 37; S. C., 8 Stew. Eq. 562.

It is to be observed that the services rendered by the complainant to the firm of which her husband was a member, were not within the line of those household services which the relation of wife to husband requires the wife to render; they were services outside of the family and tended to the benefit of the firm of which he was a member.

It is not contended that the equitable liability arose by implication from the rendition of such services, but the employment and the services rendered thereon "was upon an express undertaking to pay the usual compensation.

The question, then, is whether equity will enforce an express undertaking to pay for the value of such services.

That a wife may employ her husband as her agent to conduct and manage a business established by her capital is thoroughly settled. Taylor v. Wands, 10 Dick. Ch. Rep. 491; Arnold v. Talcott, 10 Dick. Ch. Rep. 519. Whether and how the husband could enforce the payment of compensation for services rendered under such employment, has not been, so far as I am aware, the subject of judicial consideration. It may be plausibly argued that for the same reason a husband, whose capital is employed in business, may employ his wife to serve outside of her ordinary family and marital duties in the said business. If so, the question is, whether the wife may enforce a liability for her compensation by a bill in equity.

But the husband’s right to wages and earnings stands on a different footing from that of the wife. He has always had unrestrained power to contract and render service, and compensation therefor was his absolute right. Nothing, however, is better settled than that, at common law, the wages and earnings of a married woman became, or could become, the absolute property of the husband. The money due her for services was a chose in action which he could reduce to possession in the manner pointed out by Chancellor Zabriskie, speaking for the court of errors in Peterson v. Mulford, 7 Vr. 481. The husband could refuse to reduce to possession the right of the wife to compensation for her services, and could permit her to take her own earnings, which she could appropriate to her own use, and they could be thus appropriated and held by her against her husband’s creditors. Skillman v. Skillman, 2 Beas. 403; S. C., 2 McCart. 478; Bedford v. Crane, 1 C. E. Gr. 265; Stall v. Fulton, 1 Vr. 430; Quidort’s Adms. v. Pergeaux, 3 C. E. Gr. 472; National Bank v. Sprague, 5 C. E. Gr. 13; Peterson v. Mulford, ubi supra; Clinton Station Manufacturing Co. v. Hummell, 10 C. E. Gr. 45.

By the provisions of section 4 of the Married Woman’s act it is provided that the “wages and earnings of any married woman acquired or gained by her * * * in any employment * * * in which she is employed and which she carries on separately from her husband * * * shall be her sole and separate property as though she were a single woman.”

AVhile the words seem to limit what becomes the wife’s property to earnings acquired, they may probably be construed as conferring power to acquire by suit earnings due her for services rendered and not paid for. But assuming that the statute has deprived , the husband of the right to reduce to possession the earnings of the wife when employed by another person, and has conferred upon the married woman power to sue for and recover compensation for her services rendered to third persons, does it authorize her to contract with her husband for services, or to enforce payment or compensation from him? Had the husband paid the wife for her services in this case, I have no doubt that the money would have at once become her property under the statute and under the law as construed by our courts.

But the clause of section 14 which we have considered and deemed to be still in force, forbids contracts between husband and wife, or suits of one against the other except such as previously could be made or brought. The right to wages in this case arose out of a contract unenforceable at law. A bill in equity for the wife’s earnings under the employment of her husband was not one which could have been previously maintained, because those earnings arose out of a contract between her and her husband and had not been given to her. If the contract between them established a chose in action, it was one which the husband could, prior to the passage of the act, reduce to possession and hold absolutely, and a bill in equity would not lie therefor; for it would be absurd to say that the husband, having the earnings of his wife in his pocket and refusing to joay them to her, had not reduced them to ¡jossession. It follows that the provisions of section 4 cannot relate to wages and earnings of a wife under the employment of her husband, unless in case he voluntarily pays them to her. If he declines to pay, she is remediless.

The result is that the bill and proofs present no ground for .a decree.


text:
    Cornelia Gertrude Stewart and Harry Meyers, executors and trustees, v. Thomas Harrington Stewart et al.
    [Filed December 6th, 1900.]
    1. Upon a bill by executors and trustees for instructions, the action of the court should be confined to instructions as to present duty, or to duty likely to arise under present conditions.
    2. A direction in a will that testator’s estate shall remain intact for two years after his decease, and a devotion of the income during that period to a specified purpose, followed by provisions for the creation of certain funds, the revenue or income of which is bequeathed, such revenue or income will begin from the expiration of the two years, and not from testator’s death.
    3. Words occurring more than once in a will must be presumed to be used in all cases in the same sense unless a contrary intention appears in the context or they are applied to a different subject. When words “I desire” are used in parts of a will as directing the disposition of parts of testator’s estate, the same sense will be attributed to them in another clause of the will relating to the disposition of a part of the estate, where the context does not indicate any different intention.
    4. A devise of lands to a wife for life or during widowhood, and a devise thereof in remainder in fee to a son, followed by an express direction that the devisees shall sell the land and buy other land at a price not exceeding $8,000, and that any excess in price should be invested and added to testator’s estate, burdens the lands and the devisees thereof with a trust to be performed according to the direction.
    5. A provision that in case certain bequests cannot be realized from testator’s estate, they shall abate equally, followed by authority to sell lands in order to carry out the provisions of the will, permits executors and trustees vested with such authority, to resort to the proceeds of lands so sold, to make up such bequests, when the personal estate is insufficient for that purpose.

      Mr. Peter Baclces, for the complainants.

      Messrs. MacBherry & Bees and Mr. Thomas J. Noonan, Jr., for the defendants.
   Magie, Chancellor.

The bill in this cause was filed by Cornelia Gertrude Stewart, executrix and trustee under the will of Thomas Congdon Stewart, and Harry Meyers as executor and trustee of the estate of Thomas Congdon Stewart.

Its prayer is for a construction of the will of Thomas Congdon Stewart and for instructions in respect to the complainants duty thereunder.

The defendants are Thomas Harrington Stewart, a son of testator, and Rebecca H. Stewart, his wife; Mary Stewart, their daughter, and William W. Scott, Matilda T. Scott, William Hayes, Thomas F. Noonan, Jr., Thomas Fallon, Thomas Harrington and William H. Rees.

An answer has been filed by Thomas Harrington Stewart and Rebecca H., his wife, and Thomas Harrington; and another by William W. Scott, and a formal answer has been filed by the guardian of Mary Stewart, who is an infant.

A decree pro confesso has been taken against Matilda T. Scott, William Hayes, Thomas F. Noonan, Jr., Thomas Fallon and William II. Rees.

The cause has been -brought to hearing upon the pleadings' and a statement of facts agreed on by the solicitors of the-complainants and of the answering defendants, other than the guardian of the infant defendant.

It appears thereby that Thomas Congdon Stewart died May 15th, 1897, having made and published his last will which was duly probated in the orphans court by Cornelia Gertrude Stewart and Charles Fanning Stewart, who were the executors and trustees named-therein; that Charles died May 10th, 1899, and by his will gave all his estate to Cornelia; that Cornelia,as surviving executor and trustee of Thomas Congdon Stewart,stated and settled an account- in the orphans court, exhibiting the condition of the estate at the expiration of two years after testator’s death, and showing a balance of personal estate of over $40,000; that Cornelia thereafter, under the power conferred upon her by the will, nominated Harry Meyers as a successor to the deceased Charles; that the testator died seized of a house and lot, which the will calls his homestead, and of two other tracts of land, which three tracts comprised all the real estate of which he died seized; and that the personal estate exhibited by the account of the executrix comprised all the personal estate of the deceased.

Upon a bill of this sort, the court is not merely to counsel and advise, but it must decide and direct. Its action is to be confined to direction respecting present duty, and limited to interests immediately involved, and which must be properly and fully represented. Bonnell v. Bonnell, 2 Dick. Ch. Rep. 540; Griggs v. Veghte, 2 Dick. Ch. Rep. 179; House v. Ewen, 10 Stew. Eq. 368.

A construction is first sought of the first paragraph of the will, which reads thus:

“First. After payment of my just debts and expenses of funeral, in the discretion of my executors, I will and direct that my estate shall remain intact for two years after my decease, except as above provided and also for the support and maintenance of my wife and household as at present constituted, which I permit to be done from any income from my estate.”

As to the intent of testator expressed in this paragraph, I find no difficulty. He evidently intended thereby, first, that his executors, at their discretion, should pay his debts and funeral expenses; second, that except so far as the same was required for such payment, his executors were not to proceed to devote any part of his estate to the purposes afterwards declared in his will for a period of two years after his death,, but, third, during that period they might devote the income thereof to the support and maintenance of his wife and household as they were constituted at his death.

A construction is next sought of a part of paragraph 2 of the will, and instructions as to the effect thereon of the provisions of paragraph 3. The part of paragraph 2 in question and paragraph 3, read as follows:

“I also give to my said wife the house and grounds attached where J now reside, for life, or during her widowhood, provided, always, it be used as a homestead for her and my son Charles. Upon the death .or re-marriage of my said' wife, I give the said homestead to my son, Charles Fanning Stewart, in fee.
“Third. I desire that at such time as may be agreeable and mutually •consent to by my wife and my son, Charles, the homestead be sold and •one purchased in lieu thereof by them, at a cost not exceeding eight thousand dollars ($8,000), and any excess in price gained be invested and added to my estate, the use of the said household as before stipulated.”

The part of paragraph 3 above given, standing alone, presents no difficulty. The testator’s devise to his wife was an estate, for life or during widowhood, in the house and lot therein specified to be used as a “homestead” for herself and his son Charles. The latter having died, his interest during the pen•dency of the wife’s estate, whatever it was, has ceased, but his •death can have no effect to defeat or diminish the estate expressly devised to her, which by both answers of the adult •defendants is admitted to be a life estate.

Nor does it admit of doubt’that, by the devise to Charles, an estate in fee was vested in him, which was transmissible by him by deed or will. 2 Washb. Real Prop. 228; Price v. Sisson, 2 Beas. 176; Weehawken Ferry Co. v. Sisson, 2 C. E. Gr. 475.

G-rave difficulty, however, arises when the intention of the testator, in paragraph 3, is sought.

The testator commences this paragraph “I desire.” On the part of the complainants it is contended that this expression ■“desire” is hortatory, or precatory, and not obligatory. That it is used in this sense is claimed to be indicated by the subsequent provision that the act desired is not to be done at •once, but only at such time as shall be agreeable and mutually •consented to by the persons to which the devises in paragraph ■3 had been made. On the part of the defendants, it is contended that even if the word “desire” be merely precatory it is so used as to create a trust of the homestead by implication.

It is unnecessary to discuss these diverse contentions, for I judge it clear that the word “desire” was used in paragraph 3 in the same sense in which it was used in two other paragraphs of this will. Thus in paragraph 4, which is hereafter set out in full, testator says, “I desire the sum of $25,000 * * * set apart and invested * * * the revenue from which I give to my said wife for life,” &c. So in paragraph 7, also hereafter set out in full, he says, “all the rest and remainder * * * I desire invested * * * . the income from which shall be shared equally by my two sons and paid to them,” &c.

It does not admit of doubt, that in each of these examples the word “desire” did not bear a sense merely hortatory or precatory, but was equivalent to a positive direction.

The rule that words occurring more than once in a will shall be presumed to be used always in the same sense unless a contrary intention appear by the context, or unless the words be applied to a different subject, laid down by Mr. Jarman (S Jarm. Wills (B. & T. ed.) 707), is founded on reason, and is in accord with the fundamental rule which requires us to seek from the language of a will the intent of the testator. There is nothing in the context to indicate that “desire” was used in paragraph 3 in a different sense from that clearly indicated by its use in paragraph 4 and paragraph 7. In every case the word is applied to the same subject-matter, that is, the disposition of parts of testator’s estate. It follows, in my judgment, that “desire” in paragraph 3 bears the sense of “I direct,” as it evidently does in paragraphs 4 and 7. Anderson v. Anderson, 4 Stew. Eq. 560.

This result leads to these inquiries: .What did testator direct to be done, by whom did he direct it to be done, and when did he intend it should be done.

The acts directed were, first, the sale of the homestead, notwithstanding the devise thereof by the preceding paragraph; second, the purchase of another homestead; third, the use of not over $8,000 of the proceeds of the sale of the former in the purchase of the latter, and fourth, the investing and adding to his estate so much of such proceeds as exceeded the cost of the new homestead.

The singular phrase, “the use of said household as above stipulated,” is, in my judgment, expressive, as to the purchased homestead, of the same intent which was expressed as to the homestead of which testator died seized by the phrase in paragraph 2, “provided, always, it be used as a homestead for her and my son Charles.” Properly construed, neither direction could operate to diminish the estate thereby given to the wife, upon the death of Charles, for she would satisfy this proviso by furnishing to Charles a home therein during his life.

It is plain that the acts directed to be done were to be done by the wife and the son Charles. The purchase is expressly directed to be by them; the direction to sell is so connected therewith as to require the sale to be made by them. If there was no express provision to that effect, I think one would be inferred from the fact that the purchase directed to be made by them is to be made out of the proceeds of the sale.

The direction to sell is not, however, peremptory and does not require any immediate sale. On the contrary, it is expressly directed that the sale should take place at a time agreeable and consented to both by his wife and by Charles. The death of Charles, doubtless, renders his consent unnecessary, but it cannot be doubted that the wife must still consent to a sale.

Upon this construction, it is not easy to determine what ■estate passed under paragraph 2 as limited by paragraph 3. Upon the best consideration I can give, the estate created by paragraph 2, viz., the estate during life or widowhood in the wife, and the remainder in Charles, were burdened with a trust, which required a sale when they consented to it, and the purchase of another homestead in which the wife should have a like estate and Charles a like remainder. The proceeds of the sale were to be devoted to such purchase up to the amount of $8,000, and the excess was to fall into testator’s estate. If no .sale has been consented to, upon the, death of the two devisees .a sale must then take place, and from the price $8,000 would go to Charles or his grantee or devisee, and the balance would go to testator’s estate. Upon this construction the beneficial interest in Charles would be a vested interest in fee, which he could grant or devise.

Complainants ask no instructions in respect to their duty under paragraph 4. But the answer, in which Thomas Harrington Stewart joins, sets up, by way of cross-bill, a construction of that paragraph to the effect that the fund of $25,000 thereby directed to be set apart and invested, shall be reduced one-half, and the other half shall be paid to him. This claim may be properly considered. Green v. Blackwell, 5 Stew. Eq. 778.

Paragraph 4 reads as follows:

“Fourth. I desire the sum of twenty-five thousand dollars ($25,000) set apart and invested by my executors, the revenue from which I give to my said wife for life for her support and the maintenance of the household. This provision is made with intent that my said wife and my son ■Charles shall enjoy a common household.”

While the intent of the testator evidently was that his wife and son Charles should “enjoy” a common household,” the gift of the “revenue” to his wife for life was for her support and the maintenance of the household. If such gift was burdened in favor of Charles during his lifetime, the burden ceased upon his death, and the wife is still entitled to the whole of the revenue expressly given to her. There is absolutely no trace of an intent to diminish her revenue after Charles’ death nor to devote any part of this fund before her death. As there is no gift over this fund will, no doubt, after the wife’s death, become part of the estate and be disposed of under the provisions of other clauses of the will.

Paragraph 5 of the will reads as follows:

“Fifth. I direct that my executors also set apart and invest in good securities or real estate, the sum of ten thousand dollars ($10,000) and pay the income therefrom, as it accrues, to my son, Thomas Harrington Stewart, during his life, and at his death the same shall go to his children, born in lawful wedlock, per stirpes, after the youngest shall have attained the age of twenty-one years.”

Complainants’ bill asserts that Thomas claims that under this paragraph he is entitled to the income of the fund thereby created from the death of the testator, and they seek instructions whether such income is payable from testator’s death, or from the end of two years thereafter. The answer of Thomas admits that such is his claim. In my judgment, there is no foundation for such claim. The legacy in question is not a general one, upon which, by the general rule, interest is to be reckoned from the expiration of one year from the testator’s death, nor is it within any of the exceptions to the general rule in which interest is allowed upon the legacy from testator’s death. Welsh v. Brown, 14 Vr. 37 Halsted v. Meeker, 3 C. E. Gr. 136; Hennion v. Jacobus, 12 C. E. Gr. 28; Griggs v. Veghte, 2 Dick. Ch. Rep. 179; Corle v. Monkhouse, 2 Dick. Ch. Rep. 78; Green v. Green, 3 Stew. Eq. 451; S. C., 5 Stew. Eq. 768; Davison v. Rake, 17 Stew. Eq. 506; S. C., 18 Stew. Eq. 767.

The paragraph in question must be read in connection with-the paragraph which expressly requires the estate to be kept intact for two years, and in the meantime devotes its income to • another purpose. Thus read, the intent of paragraph 5 is clear that the fund is to be set apart and the income thereon commences, not from the testator’s death, nor from the period of' one year after his death, but from the expiration of two years from his death.

Eor like reasons, the "revenue” to be paid the wife under paragraph 4 will be such as accrues after the expiration of two • years from testator’s death.

Paragraph 6, omitting the last clause, reads as follows:

“Sixth. I give and bequeath to my son, Charles Fanning Stewart, the sum of ten thousand dollars ($10,000), to be paid to him within five years after my death.”

Complainants ask no instruction as to their duty under this paragraph, but Thomas Harrington Stewart, by his cross-bill insists that the legacy thereby given to Charles did not vest in him, but upon the death of Charles belonged to Thomas. There is absolutely no foundation for this claim. The legacy is given by present words, although the time of its payment was in the future. As Charles survived the testator, he became immediately invested with the right thereto, which was not defeated by his death before the time of payment had arrived. The time of payment fixed by this paragraph is any time within five years after testator’s death. This direction is, however, to be read in connection with the paragraph which preserved the estate intact for two years. When that period had passed, this legacy could be paid at any time prior to the expiration of five years, and upon Charles’ death it went to his personal representative. Cook v. McDowell, 7 Dick. Ch. Rep. 351; Van Blarcom v. Dager, 4 Stew. Eq. 783.

Complainants, by their bill, assert that the personal estate of testator is insufficient to create the trust fund provided for by paragraph 4, the trust fund provided for by paragraph 5, and the legacy given to Charles by paragraph 6. The insufficiency of the estate in these respects 'is. admitted. Complainants thereupon seek instruction with respect to the real estate of which testator died seized, other than the homestead. This claim requires the construction of the following parts of the will, viz., the last clause of paragraph 6, and paragraph 7, and parts of paragraph 8. The last clause of paragraph 6 reads as follows:

“Now if it shall be found that these last two bequests cannot be justly realized from my estate, the deficiency shall be drawn equally from the two bequests, without prejudice.”

Paragraph 7 reads as follows:

“Seventh. All the rest and remainder of my estate, of every nature and kind, I desire invested and added to my residuary estate, the income from which shall be shared equally by my two sons and paid to them after deducting the taxes paid on the same. Now if, during ten years after my death, my executors shall become satisfied that either or both of my sons have good and regular business habits' and are thrifty and frugal, then, in their discretion, these trusts and limitations shall terminate, and my residuary estate aside from these, shall- be divided equally, share and share between my said two sons, the habits and defections of either shall not operate as a clog against the other in such division and settlement.”

The parts of paragraph 8 which are to be construed, read,as follows:

“I also direct, in case of failure to qualify or in case of death of either, the survivor shall associate, by nomination, a successor and such successor shall give such security as shall be proper for the discharge of such duties. I also give and grant to my said executors and trustees and their successors, power to sell and convey any real estate that I may die seized of in order to carry out any of the provisions of this my will.”

It is admitted that after the death óf Charles, the surviving executrix and trustee nominated and associated with herself Harry Meyers, one of the complainants, as co-executor and co-trustee.

The questions presented involve the meaning of the word “estate” as used in the last clause of paragraph 6, and the same word as used in paragraph 7.

It will be noted that the word in paragraph 6 is not followed by any explanatory word, while in paragraph 7 it is followed by the words “of every nature and kind.” Its use in paragraph 6, however, plainly indicates that the source from which the fund provided for in paragraph 5, and the legacy given by paragraph 6, was the same, and that source was the testator’s “estate.” This word is very comprehensive, and if used without qualifiea-. tion includes all testator’s propertjc Whittaker v. Whittaker, 13 Stew. Eq. 33; Cook v. Lanning, 13 Stew. Eq. 369; Hartson v. Elden, 5 Dick Ch. Rep. 522. When legacies are to be paid out of the “estate” of a testator, and there is nothing to restrict, the personal and real estate will be charged with the legacies. Hartson v. Elden, supra; Carter v. Gray, 13 Dick. Ch. Rep. 411. Beading again the paragraph under review, I £hink it admits of no doubt that if the personal estate is insufficient to enable the executors to provide the fund under paragraph 5 and the legacy under j)aragraph 6, resort may be had to the undevised real estate, unless-the meaning of the word “estate” in paragraph 6 is to be restricted by an inference from the use of the same word in paragraph 7, in connection with additional words indicating the broad meaning otherwise attributable to it. As before stated, the rule is that a word used more than once in a will shall be given the same meaning in each case unless a different meaning is indicated by the context. In my judgment, the context does not indicate a different meaning, but the same meaning more extensively expressed. It results that the executors and trustees may resort to the proceeds .of the undevised real estate of deceased to make up the sums provided for by paragraphs 5 and 6, when such real estate shall be sold under the powers conferred by paragraph 8.

Other and perplexing questions are presented by the- request of complainants for instruction as to their duty under paragraphs 7 and 8. It is charged and admitted that Thomas Harrington Stewart has given mortgages on the real estate of which testator died seized, and drawn orders upon and made assignments of his interests under the will. The mortgagees and the holders of orders and assignments have been made parties, and some have answered, setting'up such claims. Others have -permitted a decree fro confesso to be entered against them. Upon such claims, complainants ask to be instructed whether such defendants have any lien upon the real estate of which testator died seized or upon his estate generally, or only upon the income of the $10,000 fund and upon the invented remainder of the estate. . .

So far as the $10,000 fund is concerned, it is obvious that Thomas can make no claim to nor confer on others a right to malee claim to anything, more than the income arising therefrom as'it accrues and becomes payable during his life.

As to the provisions of paragraph 7, I am of opinion that' they must be thus construed. There is a plain direction that all testator’s estate not devised and not exhausted in carrying -out the previous provisions shall be invested. It is to be added to the residuary estate. These acts are by implication directed' to be done by the executors and trustees. The income arising therefrom, i. e., from the vested remainder and the residuary' ■estate when it falls in, is expressly given to testator’s two sons in equal shares, and by implication the income is to be paid' to them by the trustees. So far there is no difficulty. ■ ■

But more difficulty occurs with respect to the amount and kind of interest which by the terms of this paragraph paste to the two sons. -

The gift to each of them is of the interest of a fuhd. without :any limitation as to its continuance and although it is payable through trustees, such a gift passes the fund itself. Gulick v. Gulick, 12 C. E. Gr. 498; Hartson v. Elden, ubi supra. It becomes vested in the recipient of the income and payable to-his personal representative at his death, unless it is otherwise-directed by the will. Lippincott v. Pancoast, 2 Dick. Ch. Rep. 21.

Applying these settled doctrines, the interest of Thomas Harrington Stewart, under paragraph 5 and paragraph 7, is as follows: He is entitled to the income of the fund of $10,000 invested under paragraph 5, from two years after the death of testator, for the period of his life; he is entitled to one-half of the income accruing under paragraph 7, and is vested with the right to one-half of the fund out of which that income-comes, which, at least, upon his death, will pass to his personal-representative; he has no interest in the real estate of which the testator died seized, which can be conveyed or mortgaged; and his interest in the principal of the fund created under paragraph 7 cannot be anticipated by assignment.

It is, however, apparent that the testator intended that the-interest of his sons, in the principal of the fund created under-paragraph 7, might, under the contingency strangely set forth; in that paragraph, become theirs in possession in their lifetime.. Whether, at the expiration of the probationary period of ten years, during which the fund was plainly intended to be held by the executors in trust, unless paid over under its terms, the principal was to be paid to the sons or not, is open to question. But the questions thus suggested are not before us, and it is-obvious that the executors and trustees need no present direction therein. It is sufficient to say that Thomas Harrington Stewart’s interest is at present confined to the income. This he may doubtless assign and charge. Complainants ask that it be determined whether they should pay the income to those-defendants who make claim thereto, or to some, and to which-of them.

Bills for the construction of wills and trusts are said to be in the nature of bills of interpleader. Hnder proper pleading it may be possible to. adjudicate as to conflicting claims upon the trust fund, but I do not find in the pleadings or in the-.admitted facts, sufficient to justify any adjudication in respect to the claims in question:

Complainants are entitled to a decree for instructions upon the lines of this opinion.


text:
    George Van Hise v. James Van Hise et al.
    [Filed December 26th, 1900.]
    A bill disclosing no common subject-matter in respect to which complainant-seeks relief, but diverse and disconnected matters, in respect to some of which no relief is prayed for or could be granted as to some •of the defendants, is objectionable, and must be dismissed as to the •defendants duly objecting under rule 213.

      Mr. Linton Satterthwait, for the complainant.

      Mr. James Buchanan, for the moving defendants.
   Magie, Chancellor.

Objections to the bill in this cause are made in behalf of Alfred Yan Hise and Belle, his wife, two of the defendants, upon motion pursuant to the provisions of rule 213. The notice of motion states various grounds of objection. I deem it unnecessary to consider any of these grounds except one, which •claims that the bill is objectionable because it is exhibited .against the moving defendants and other defendants “for distinct matters and causes, in several of which * * * the •defendants, Alfred Yan Hise and Belle, his wife, are not nor is either of them in any manner interested or concerned.”

The rule to be applied in disposing of this objection is that laid down by the court of errors in Lehigh Valley Railroad Co. v. McFarlan, 4 Stew. Eq. 758, in these words: “The rule with regard to multifariousness, whether arising from misjoinder of causes of action or defendants therein, is not an inflexible rule of practice or procedure, but is a rule founded on general convenience, which rests upon the consideration of what will best promote the administration of justice without multiplying litigation on the one hand, or drawing suitors into needless and unnecessary expenses on the other.”

An examination of the bill discloses that one James Van Hise is made a party defendant. In respect to him and other defendants connected with him, the bill charges that on July 10th, 1900, the complainant delivered to him a pass-book of a savings bank which evidenced a deposit of money, which had been deposited by complainant in the- joint names of complainant and James, and that by James' possession of the book thus acquired, he was able to draw and did draw the deposit,- and refused to account for it. There is no charge that Alfred Van Hise or his wife was present on the occasion of the delivery of the book, or took any part -in the transaction in any way whatever. These charges, ’if available to establish in complainant any right to equitable relief as against James, manifestly afford no foundation for a decree against Alfred and huswife, nor does the bill ask any relief against them or either' of them in respect to that transaction.

The relief sought against Alfred Van Hise and his wife is-put upon . the following charges: The complainant charges-that he had a deposit of money in his name in the Trenton Trust and' Safe Deposit Company; that on July 27th, 1900r he drew a check for the amount so deposited in favor of Alfred-Van- Hise; that he delivered the check to Alfred, who after-wards drew the money and refused to account for it, and has-deposited it in the joint names of himself and wife. There is a charge that James was present on that occasion. There-is a suggestion rather than a charge that the drawing and delivery of the check to Alfred was the result of undue influence exerted by Alfred or James or one of them. Assuming that these charges may -justify making James a party to a bill for relief -against Alfred in respept to this transaction (wMch. may perhaps be questioned), yet there is no charge tending to connect the transaction of July 27th with the previous transaction of July 10th, or to indicate any liability of Alfred for what took place on the earlier occasion. The test in the application of the rule on such occasions is this:, the bill must disclose some common subject-matter in the whole of which the complainant is interested and may thereupon ask relief, and in some part or branch of which each defendant is interested and in respect to which he is a proper party, although the interest of each defendant may not be identical. Lehigh Valley Railroad Co. v. McFarlan, ubi supra; Rutherford v. Alyea, 9 Dick. Ch. Rep. 411; Ferry v. Laible, 12 C. E. Gr. 146.

The bill discloses no common subject-matter, but complainant, while seeking relief against Alfred and his wife in respect to the transaction of July 27th, has brought into the same bill his claim against James in respect to the transaction of July 10th, with which Alfred had no connection, and in respect to which no relief against Alfred is asked or could be granted. The complainant has united in one bill diverse causes of action in respect to which different decrees are sought.

The bill is objectionable and must be dismissed as to Alfred Yan Hise and wife.