author: Parker, J. Trenchard, J.

text:
    Attorney-General, ex rel. William Bliss et al., complainants, v. Linden Cemetery Association et al., defendants.
    [Argued November 23d, 1917.
    Decided June 3d, 1918.]
    On reference to a master to ascertain and report what is the “reasonable sum” to be payable as the purchase price of lands devoted to cemetery uses in accordance with the previous decision of this court in this cause (see 85 N. J. Eq. 501) — Held, that it is proper to ascertain the fair value of the lands as of the date of the receivership, and to award the stipulated ten per cent, of that value payable out of sales as made and without interest, that method appearing to be satisfactory to the parties entitled to compensation for the property.
    On appeal from an order advised by Vice-Chancellor Backes.

      Mr. Abram H. Cornish and Mr. Hugh B. Reed, for the appellants.

      Messrs. Vail & McLean, for the respondents-complainants.
   The opinion of the court was delivered by

Parker, J.

Pursuant to our former opinion in this ease, which is reported in 85 N. J. Eq. 501, there was a remittitur to the court of chancery requiring that court “to ascertain what will he a reasonable sum to be paid to the grantor, or his assigns, for services and profit on the purchase and sale of said property, and their value to the grantee, less any credits to which the grantee is entitled. And that when such sum is ascertained it shall be treated as unpaid purchase price of the land until extinguished by payment in gross or by percentage from the price of lots, as provided in the said covenant, which covenant is declared to be extra-statutory solely because the amount to be paid to the grantor was unliquidated.” The court of chancery, in adopting this decree as its own, referred it to a master to ascertain what this reasonable sum should be, and also any credits to which the grantee was entitled by reason of payments made on account of the covenant, or otherwise- The master, after taking testimony and other evidence, and hearing argument, reported that the opposing claims made before him were as follows: For the Smith contingent, that the actual value of the land for cemetery purposes, so far as available therefor, and for ordinary purposes as to the remainder, be ascertained, and ten per cent, thereon be fixed as the amount to which the Smith party were entitled, being the percentage stipulated in the covenant, and to loe payable out of the proceeds of sales of lots from time to time; that they claimed such total value was $1,822,000 and argued for an award of ten per cent, thereon. On the other hand,' the claim of the receiver was that claimants were entitled only to payment of reasonable compensation for the services and profit of Smith and his aides, “having in view the time spent for services actually rendered and their value to the grantor” (doubtless, meaning-grantee). The master, without considering whether the valuation claimed for the land was a reasonable one, adopted the receiver’s theory and awarded a total of $4,350 and interest as the gross amount payable for services and profit. It is clear, from the language of his report, which need not be here quoted, that the bulk of this amount was purely for services as of employes or agents, and that “profit” cut no particular figure.

On exceptions to this report, the vice-chancellor overruled the finding and held that as the covenant was declared by this court to be extig-statutory only because the amount to be paid was unliquidated, but that in its moral aspect it had the approval of this court, and percentage as a basis of calculation is not looked upon with disfavor (we quote, substantially, the language of his conclusions), the theory of claimants was the correct one, and he, accordingly, sustained the exceptions and sent the matter back to the master for a further report in accordance with his views. From the order advised by him in this regard the present appeal is taken.

We think the principle laid down by the learned vice-chancellor, so far as quoted above, was clearly in accordance with our former ruling. We expressly said in the opinion that Smith and his associates were entitled to a fair profit for the services they had rendered; that the profit should bear a reasonable relation to the value of the services; that Smith was in no sense the agent of the cemetery association; that in a sense he risked the cash that he put into the transaction;, that the contract of the parties should be carried out as nearly as the statute would permit, inasmuch as a restoration to the status quo was impracticable ; and that the only legal defect in the contract was the fact that the purchase price, and hence the amount of profit, was not liquidated. Apart from this, no legal or equitable objection was perceived either to ten per cent, on proceeds of sales as a rate of compensation for profit and services, or to its payment in installments as sales were made, the fact that such pajonent should wait on the sales no doubt being an element in fixing the rate. The position taken by the claimants makes it possible to utilize the ten per cent. rate. The plan as agreed on between the parties was to pay ten per cent, of the gross proceeds of sales from- time to time, until the property should be sold out at an expected profit over cost and running expenses. This plan fails because the total amount of the ten per cent, was not ascertained. If it could have been so ascertained when the deed was made, the consideration of the deed would have been that amount payable in installments of ten per cent, of sales as made, which, if turned into cash at the delivery of the deed, would have been the present value of such installments at a proper rate of interest. In either aspect the consideration would have been a lawful one because its amount was known and stated; and in either aspect it corresponds to what the parties agreed on; the difficulty being in its ascertainment because the time and amount of installments were a matter of pure speculation. Is there, then, a way of reaching a substantially identical result? The plan advocated by the claimants and approved by the vice-chancellor is that an appraisement be made of the lands, and that ten per cent, of this be ascertained as a gross sum to which claimants are ultimately entitled and (to adopt the language of the master’s report) ten per cent, of the proceeds of future sales be set apart for the benefit of William E. Smith and his assigns as the sales are made, until the said sum is paid. This seems to be a practical way of disposing of the matter, and we assent to it with two qualifications — the first, that no interest be payable on the unpaid balance, for reasons already stated, and secondly, that the appraisal be made as of the date of the receivership, at which time the original scheme broke down.

This results substantially in an affirmance of the order brought up; but that order lacks precision, as it seems to depend for its effect on a reference to the conclusions of the vice-chancellor. A new order of reference should be made in accordance with the views we have expressed.

Trenchard, J.

(dissenting).

I do not agree with the majority of the court. My view is that the special master was right and that the exceptions to his report in the court below should have been overruled.

In construing a remittitur, or in determining the action to be taken thereon where its directions are incomplete, the lower court should look to the reasons stated in the opinion of the appellate court and be governed thereby. Especially is this true when the remand (as in the present case) is for further proceedings in accordance with the opinion, for in such case the opinion is practically a part of the mandate. Considered in the light of the opinion (85 N. J. Eq. 501), I think that the construction adopted by the special master was right. To find that he was wrong (as the majority opinion does), it seems to me to be necessary to ignore the really controlling passages of the ojnnion of this court to which we must look for aid in construing the- remittitur. An examination of that opinion shows that Smith “was entitled to a fair profit as a recompense” for his “services;” that covenant No. 2 (with which alone we are concerned) was intended to provide for “the profit that Smith was to take;” that, whilst the covenant was ultra vires, the land could not be kept without paying Smith’s profit; that “normally the remedy would be the rescission of the contract, notwithstanding the conveyance, the vendee being thereby absolved* from its illicit covenant, and the vendor having his land restored to him; if, for valid reasons, this cannot be done, it still furnishes the criterion by which the rights and equities of the parties are to be worked out;” that for valid reasons the normal remedy cannot be applied; that the amount of Smith’s profit “cannot be ascertained from the covenant itself;” that the amount is “to be a reasonable sum, in view of the services of the grantor and their value to the grantee, less any credits to which the grantee is entitled.”

Obviously, that means that rescission is to furnish the criterion by which the rights of the parties are to be worked out; that since the things which Smith gave, i. e., land and sendees, cannot be restored, he must have their value, not as of the present-time, but as of the time when rendered. Eor reasons set forth in the opinion the court was concerned only with the value of the services. No confusion should result from the use of the words “profit” and “services,” interchangeably in the opinion. The court designated the thing Smith bargained for as “profit” and the thing which he gave as “services,” and pointed out that the bargaining for a profit was legitimate, but the form in which it was cast was illegal, and, consequently, Smith could not have the profit bargained for in the covenant, but must have profits commensurate only with what his services were worth, because he gave services and not profits. Mr. Justice Garrison, in writing the opinion of this court, made jolain the method by which the amount was to be ascertained by saying: “Hence, inasmuch as such sum (of profits) cannot be ascertained from the covenant itself, it must be held by a court of equity to be a reasonable sum in view of the services of the grantor and their value to the grantee.” He did not say that Smith was to be paid ten per cent, of the present value of the land, nor a word about ascertaining the value of the land as of the date of the receivership. If any such course had been intended it would not have been necessary to ascertain the value of Smith’s services, because there was no relation between the value of such services and the value of the land in its present condition after development by the expenditure of hundreds of thousands of dollars by the association. The value of the services was not to be ascertained by the final result of the enterprise. Their value was to be determined by ascertaining what it would have cost the grantee at the time they were rendered to have had them duplicated. Such was the method adopted by the special master. I therefore vote to reverse the decree which sustained the exception to his report.

I am requested by Mr. Justice Black and Judge Williams to say that they concur in these views.

For affirmance — Swayze, Parker, Bergen, Minturn, Kalisch, White, Gardner — 7.

For reversal — Trenchard, Black, Heppenheimer, Williams — 4.


source: Caselaw Access Project

author: Bergen, J.

license: Public Domain

text:
    H. Riker Turnure, complainant-respondent, v. Julia Turnure, individually and as executrix, defendant-appellant.
    [Argued March 6th, 1918.
    Decided June 17th, 1918.]
    A testatrix gave certain lands to her executors in trust to hold the same and pay the income to her son during his natural life with remainder to Ms lawful issue, and in default to her daughter, the executrix of her will, subject to tbe condition that if her son should live to the age of forty years and at that time be not embarrassed with debt and competent to prudently manage his own affairs, of which her executor should be the sole judge, then she was authorized and empowered to convey the property to the son. When the son reached that age he applied for the conveyance and the executor, or trustee, refused upon the ground that he was not then competent to manage his own affairs. — Held, that her determination of the question was final if the judgment exercised by her was sound and honest, and that, under the proofs submitted, the exercise of her discretion that the son had not become competent to prudently manage his own affairs, was not unsound, or exercised for selfish and improper motives.
    On appeal from tbe court of chancery.

      Mr. James S. Erwin, Mr. Maximilian T. Rosenberg and Mr. James F. Fielder, for the appellant.

      Mr. David D. Ackerman, for the respondent.
   The opinion of the court was delivered by

Bergen, J.

The complainant hied this hill to compel Julia- Turnure, Charles P. Buckley and William AY. Buckley, as executors of the wiil of Mary J. Turnure, and Julia Turnure, individually, to execute a trust contained in the will of Mary J. Turnure. The testatrix devised, among other lands and personal estate, two parcels of land sufficiently described for the purposes of this suit as the “Closter Farm” and “Tenafly Residence,” to her executors, in trust to permit her son, the complainant, during his life, or so long as he chose to do so, to occupy the same, or if he ceased to reside there then to let the property and pay the rent to him during life and thereafter to convey it to his descendants, or in default to Julia or her heirs if she be not living. The will further provided that if her son should live to be forty yeans of age, “and at that time shall not be embarrassed with debt, and competent to prudently manage his own affairs, of which my executors or the survivors of them shall be the sole judges,” then they were authorized to convey to the son these lands and other property and the trust should be terminated.

Julia Turnure was named as executrix and Charles P. Buckley and William W. Buckley to succeed her as executors after her death; she proved the will, qualified as executrix and is still alive, so that neither of the other nominees have been required or authorized to qualify.

The will further empowers the executors to sell the real estate during the lifetime of her son, or during the minority of any of his descendants, and to invest the proceeds of such sale which arc to be held under the same trust as the land, with the proviso that no sale thereof shall be made while the son resides on the farm without his written consent. The son, claiming to have attained the age of forty years, not being embarrassed with debt and competent to prudently manage his own affairs, applied to the executrix and trustee to convey to him the land in controversy, which she refused to do, and thereupon this bill was filed to compel the conveyance, and the advisory master, to whom the case was referred by the chancellor for his advice, found that the defendant, in refusing to execute the deed to her brother, exercised a discretion confided in her, for selfish and improper motives and víala fide., and advised a decree that she make the conveyance from which she has appealed.

The latest deliverance by this court on the legal aspect of the right of a court of equity to compel a trustee to exercise a discretion favorable to the cestui que, trust, is to be found in O'Gorman v. Crowley, 81 N. J. Eq. 520, where the execution, of the trust was authorized whenever, in the opinion of the executrix, the mental and physical condition of the legatee was such that he was competent to attend to his affairs, without the additional words, as in this case, “of which my executors or the survivors of them shall be the sole judges.” In that case this court said: “'Whether the son’s mental and physical condition should improve to the extent indicated was a matter which required an exercise of judgment on the part of someone. The testator, as he had a right to do, selected the executors named in his will as the persons who should exercise that judgment. Their determination of that question was final if the judgment exercised by them was a sound and honest one.” Therefore, in the case under consideration, the only question remaining is whether-the advisory master properly determined the facts to which this rule of law should he applied. .

At the time of the mother’s death the defendant was living with her brother on the farm, and within a few months thereafter he married and brought his wife, Ida Turnure, to the farm, and shortly thereafter the defendant left her brother’s residence and since that time has resided elsewhere.

The executrix settled her account in the orphans court as executrix and also filed an intermediate account of the rent from the Tenafly house and of other property held in trust, and no dispute is raised as to the accounting.

The mother died November 24th, 1901, and the will was dated October 4th, 1898. In 1904, nearly three years after the mother’s death, the complainant filed his petition with the orphans court of Bergen county praying the appointment of a suitable person, in the place of the defendant, Julia Turnure, “to execute the trust declared in the will,” and on the 8th day of August, 1904, the orphans court appointed William C. Herring in the place of Julia Turnure, she consenting thereto, “to execute and complete the trust created and declared in the said will,” which appointment was accepted by the appointee who executed the trust until the 20th day of December, 1905, on which date the orphans court discharged him from all further duties as trustee and appointed Ida Turnure, the wife of the complainant, as trustee in his place. On the 9th day of December, 1916, Id& Turnure, “as substituted trustee,” conveyed the lands in question to Ethel H. Cosgrove, the consideration stated being $25,000; the grantee was a stenographer in the office of the counsel of the complainant. She testified that she paid the consideration by a check on a bank, but that the money was given to her by the counsel who was making this transfer, from which it is quite apparent that the grantee paid nothing out of her own funds for the transfer to her, and her part in the transaction was that of a conduit to transfer the title, for on the same day she executed a deed for the same lands to the complainant and Ida, his wife.

Whether these conveyances passed the legal title to the complainant and his wife, in view of the fact that the power of sale contained in the will is given to the executrix, in the exercise of a special trust and confidence, the gift in the will being to them, or whether a substituted trustee, who was not appointed executor, could convey the legal title, it is not necessary to determine.

What the parties have attempted to do is, not to transfer the title to the son as directed by the will, but to the son and his wife, so that if the conveyance be good the son’s ultimate acquisition of the entire title to the property depends upon his surviving his wife. When this will was made the son was about twenty-eight years of ago, and it is quite apparent from the testimony, and the act of the testatrix in putting this land in trust for the use of her son, she did not then consider him a competent person to prudently manage his own affairs, and it was also apparent that not having changed her will in the meantime she continued of the same opinion until her death, and that it was her intention to provide a trust fund for the maintenance of her son during his life which he should not be able to dissipate.

It is not necessary in this opinion to repeat the testimony, but we are quite satisfied from it that the conduct of the son up to the time of his mother’s death justified her apprehension that he was not then competent to manage his own affairs with prudence, and for that reason she intended to leave his share of her property in such a condition as to provide him a maintenance during life.

What the son is undertaking to do, possibly under the influence of his wife, is immediately to put one-half of his property beyond his control, and perhaps deprive his children, if he should have any, of their reversionary right under the will, and if he leave no children, to pass the estate out of the blood of the testatrix.

There is not a particle of evidence in the case which would justify any inference that the habits or prudence of the complainant is any different from what it was when his mother died; on the contrary, an inference is permissible that his wife is the stronger character of the two, and that she has induced him to join in a scheme to presently deprive himself of one-half of the property, and, possibly, the whole.

We do not think that with these conditions present the defendant’s exercise of her discretion not to convey, she being made sole judge whether she should or not, was unsound or dishonest, for, as was said in O’Gorman v. Crowley, supra: “The fact that the judgment of others upon the question of the mental and physical condition of the son differed from that of the executors, is quite immaterial, for it was not upon their judgment but upon that of the executors that the testator saw lit to rely.” In addition to the fact that, apparently, the ability of the son to act with prudence as to his property has not been altered since his mother’s death, which would be a strong reason why the defendant should preserve the "property for the use of the son as his mother intended, is the additional one that his present intention as to the disposition of the property contrary to the manifest wish of the mother to protect him against just such acts, is a strong indication that he is not yet qualified “to prudently manage his own affairs.”

We do not think that the advisory master was justified by the proofs in the case in finding that the defendant refused to exercise her discretion, as committed to her by the will, “for selfish and improper motives and mala fide.”

The fact that if the complainant should die without issue, the defendant or -her heirs will take 'the property, is not of itself sufficient to sustain a charge of unsound or dishonest motive, for the discretion was committed to her by the mother with full knowledge of all the circumstances. She trusted the defendant to see that the property was held for the benefit of her son and to prevent its being taken from him unless she, the defendant, was satisfied that he had so improved as to manage it prudently. She had confidence in her daughter, and made her the sole judge, and that confidence ought not to be usurped by the court unless the evidence preponderantly shows that it is being abused. This case is almost, if not entirely, a question of fact, and we conclude that under the testimony the daughter is acting in good faith and not mala fide.

The decree below will be reversed and the bill dismissed, with costs.

For affirmance — Ealisch, Black, Gardner — 3.

For reversal — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, White, Heppenheimer, Williams. Taylor — 10.


author: Kalisch, J.

text:
    Ignatz Ratkewicz and Amelia Ratkewicz, his wife, complainants-respondents, v. Framisck Kara and Carolina Kara, his wife, defendants-appellants.
    [Decided May 3d, 1918.]
    1. A defective title is no defence to a purchase-money mortgage nor is it ground for abatement in price in the absence of fraud or eviction.
    2. The right of a vendor to sue an adjoining owner for an encroachment on land sold passes to a purchaser.
    3. The ordinary covenants in a deed are against lawful and paramount encumbrances and do not apply to a case where an adjoining landowner encroaches on the vendee’s possession.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Griffin, reported in 88 N. J. Eq. 201.

      Mr. Robert S. Hartgrove, for the appellants.

      Mr. Adrian D. Sullivan and Mr. Albert K. Condit, for the respondents.
   The opinion of the court was delivered by

Kalisch, J.

The complainants gave to the defendants a warranty deed, containing the usual covenants of seizin, right to convey, quiet enjoyment, further assurance and warranty, and as part of the consideration money of'the conveyance of the premises took a mortgage thereon for $300.

The defendants having defaulted in the payment of the mortgage, complainants brought foreclosure proceedings, and no answer or plea being filed by the defendants, the proceedings eventually terminated in a decree for the complainants.

The defendants, upon a rule to show cause, allowed in the court of chancery, sought permission to answer out of time in order to set up by way of abatement of the purchase price, and as a defence to the foreclosure, that defendants had brought an action of ejectment against an adjoining owner, the foundation of whose building, at the time of the conveyance, was nine inches over the line of the premises conveyed, and recovered six cents damages and costs and entered a judgment for that amount.

The vice-chancellor discharged the rule. This was right.

Even a defective title is no defence to the foreclosure of a purchase-money mortgage or ground of abatement of price, in the absence of fraud or eviction. Hulfish v. O'Brien, 20 N. J. Eq. 230; affirmed by this court in 22 N. J. Eq. 471- An outstanding title or encumbrance is no defence without actual or constructive eviction. Glenn v. Whipple, 12 N. J. Eq. 50.

The covenants in the deed are against paramount, lawful claims. Washb. Real Prop. 660. Here there was no lawful right outstanding. The vendee got the right of possession which is what is covenanted.

What happened was that a trespasser had wronged the vendor who could eject him with mesne profits — that legal right passed to the vendee who exercised his right and brought ejectment which confirmed (not destroyed) his title.

Mo doubt an agreement might have been made by -which the vendor would pay the expense, but the ordinary covenants do not cover such a case — they are against lawful and paramount encumbrances. See Conveyance act. 2 Comp. Stat. p. 1571 §§ 109, 110.

The order discharging the rule to show cause is affirmed, with costs.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.

For reversal — Mone.


author: Black, J.

text:
    John Fraser Kempson, complainant-respondent, v. Grover C. Kempson et al., defendants-appellants.
    [Argued March 12th, 1918.
    Decided June 17th, 1918.]
    The will of Peter Tertius Kempson consists of six paragraphs or items, numbered first, second, third, sixth, seventh, ninth; after disposing of the residuary estate, this clause appears: “From all the provisions of the preceding clauses I except my interest in The Insurance Times newspaper, its good will,” &c. — Held, that Peter. Tertius Kemp-son died intestate, as to his interest in “The Insurance Times.”
    On appeal from a decree of the court of chancery, reported in 88 N. J. Eq. 153.

      Messrs. Smith, Mahon & Herr, for the appellants.

      Mr. Charles O. Truex and Marie Townsend, Jr., for the respondent Charles M. Van Cleve, administrator.

      Mr. John K. English, for the respondent administrators of Julia H. Kempson.
   The opinion of the court was delivered by

Black, J.

A bill in this case was filed in the court of chancery for the construction of certain items of the will of Peter Tertius Kempson, who died September 25th, 1890. The property affected is the estate or interest in certain personal property, consisting of a newspaper called “The Insurance Times.” The contest is over the one-third (V0) interest in “The Insurance Times.” The appellant’s brother St. George Kempson, a son and legatee, under the will of Peter Tertius Kempson, on the 30th day of December, 1893, assigned his one-third interest in “The Insurance Times” to his step-mother, Julia H. Kempson, and James A. Van Cleve. He died August 12th, 1907, leaving a will in which he bequeathed his property to his wife and children. The question, therefore, is whether the assignment made by St. George Kemp-son, on the 30th day of December, 1893, is legal, that in turn depends upon the question whether Peter Tertius Kempson died intestate, as to this item of'“The Insurance Times,” because, if he did, then St. GeorgeJKempson had legal power to make the assignment of December 30th, 1893.

The assignees and their heirs> the respondents, have a legal title. The court of chancery held that Peter Tertius Kempson died intestate, as to “The Insurance Times,” and that St. George Kempson made a valid assignment of all his interest in “The Insurance Times.” We think the court of chancery reached a right conclusion and the decree of the court of chancery should be affirmed.

The reason on which this conclusion is based, in brief, is this: The will of Peter Tertius Kempson consists of six paragraphs, or items — number first, second, third, sixth, seventh, ninth — • the first five being single paragraphs, making specific bequests. The ninth paragraph is composed of eight distinct sections, although not numbered. The first four refer to the disposition of the residuary estate by the following clause: “All the rest, residue and remainder of my estate, both real and personal, not hereinbefore disposed of, or hereinafter specified, to have and to hold the same in trust,” &c. * * * The last four relate specifically to “The Insurance Times” — tire conduct of the business connected therewith. Then follows this clause: “From all the provisions of the preceding clauses, I except my interest in The Insurance Times newspaper, its good will,” &c. From these clauses, read in connection with the entire will, we think the conclusion is irresistible that the testator’s intention, as gathered from within the four corners of the will, to use a picturesque phrase, in the law of wills, was to exclude “The Insurance Times” from the residuary clause, that Peter Tertius Kempson died intestate, as to his interest in “The Insurance Times.” Failing to make subsequent provisions for its ultimate disposal. That the will must furnish the basis for construction is elemental.

It can make no difference, whether the testator through ignorance or inadvertence fails to dispose of all his estate. The courts cannot supply the omission. The province of the courts is to construe, not to make wills. Tyndale v. McLaughlin, 84 N. J. Eq. 657; 95 Atl. Rep. 119.

The decree of the court of chancery is affirmed.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Kaxtscii, Black, White, Heppenheimer, Wtlltaats, Taylor, Gardner —12.

For reversal — -Hone.


author: Per Curta 3i.

text:
    In the matter of the application for probate of the last will and testament of Michael Allen, deceased.
    [Decided May 3d, 1918.]
    On appeal from a decree of the prerogative court advised by Vice-Ordinary Learning, whose opinion is reported in 88 N. J. Eq. 291.

      Mr. Huntley S. Beckett and Mr. Lewis Starr, for the petitioner-appellant.

      Mr. David O. Watkins and Mr. Austin H. Swackhamer, for the defendants-respondents.
   Per Curta 3i.

The decree appealed from will be affirmed, for the reasons stated in the opinion hied in the court below by Vice-Ordinary Learning.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner-13.

For reversal — None.


author: Pee Curiam.

text:
    In the matter of the final account of the executor of Henry C. Diehl, deceased.
    [Decided May 3d, 1918.]
    On appeal from a decree of the prerogative court advised by Vice-Ordinary Foster, whose opinion is reported in 88 N. J. Eq. 310.

      Mr. J. Harry Hull, for the appellant.

      Mr. Absalom P. Bachman, for the respondent.
   Pee Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Ordinary Foster.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner-13.

For reversal — None.


author: Per Curiam.

text:
    Simon Dalsheimer et al., respondents, v. Graphic Arts Company, appellant.
    [Decided May 3d, 1918.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, whose opinion is reported in 86 N. J. Eq. 49.

      Messrs. Grey & Archer, for the complainants-respondents.

      Messrs. Bourgeois & Coulomb, for the defendant-appellant.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Learning.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 12.

For reversal — None.


text:
    Archibald S. Lambert, respondent, v. Ida M. Vare, appellant.
    [Decided May 3d, 1918.]
    On appeal from a decree of the conrt of chancery advised by Vice-Chancellor Learning, and reported in 88 N. J. Eq. 81.

      Mr. Clarence L. Cole, for the respondent.

      Mr. Lewis Starr, for the appellant.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the conrt below by Vice-Chancellor Learning.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner— 13.

For reversal — None.


text:
    Frederick K. Fish, appellant, v. The Harrison Milling Company et al., respondents.
    [Decided May 3d, 1918.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lewis, whose opinion is reported in 87 N. j. Eq-. 108.

      Mr. Edward Maxson, for the appellant.

      Messrs. Church & Harrison, for the respondents.
   Per Curiam.

The decree appealed from will be affirmed, for the reason's stated' in the opinion filed in the court below by Vice-Chancellor Lewis.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Gardner — 11.

For reversal — Hone.


text:
    Alfred G. Stumpf, respondent, v. Violet McGregor Littell et al., appellants.
    [Decided May 3d, 1918.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lewis, whose opinion is reported in 88 N. J. Eq. 482.

      Messrs. Freeman & Westerhoff, for the respondent.

      Messrs. Raymond, Mountain, Van, Blarcom & Marsh and William V. Rosenkrans, for the appellants.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Lewis.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner-13.

For reversal — ifone.


text:
    Laura B. Shaw, respondent, v. Thomas F. Shaw, appellant.
    [Decided May 3d, 1918.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevens, who filed the following opinion:
    My doubt, in this cause has been whether the parties were not living apart by tacit consent. The testimony of the wife is that on her return from Europe in September, 1912, her husband, on the steamship wharf, said to her: “I have no plans for your future. I have no place to take you and I have no home for you.” In this she is corroborated by her daughter and son-in-law. She has lived in her daughter’s house ever since. She does not appear to’ have made any considerable effort to induce her husband to provide a home, although he has been able to do so. On the other hand, it is proved that the defendant has made no effort to induce her to live with him. In view of Sargent v. Sargent, 36 N. J. Eq. 644, a case which decides that the duty to make the effort lies chiefly on the husband and which is in some respects not unlike the present, I am inclined to think the evidence sufficient to establish the desertion alleged.

      Mr. Harry N. Reeves, for the respondent.

      Messrs. Mulligan & Koenig, for the appellant.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Stevens.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.

For reversal — None.


text:
    Emily McDermott et al., respondents, v. Arthur A. Zimmerman, executor, &c., et al., appellants.
    [Decided May 3d, 1918.]
    On appeal from a decree of the court of chancery advised by Yice-Chancellor Poster, who filed the following opinion:
    The bill seeks an accounting from defendant as executor of Theodore A. Zimmerman, deceased, for certain property claimed to be part of the estate of Annie M. Zimmerman, deceased.
    In March, 1917, defendant, as executor of Annie M. Zimmerman, made a final accounting in the orphans court of Monmouth county, to which complainants filed exceptions, which after hearing were dismissed because the questions raised could not be considered and disposed of in such proceeding. Thereupon this bill was filed and it was stipulated that the testimony taken and exhibits used in the orphans court on the hearing of the exceptions should be used in these proceedings to determine the questions at issue without any further testimony being taken.
    From this record it appears that on January 7th, 1908, Theodore A. Zimmerman and Annie M. Zimmerman, husband and wife, made mutual wills. Mrs. Zimmerman died February, 1912. In November, 1915, Mr. Zimmerman made a codicil to his will, and in August, 1916, he died. The complainant Emily MeDermott is their daughter and the complainant Carl McDermott is her son.
    Both wills contained provisions similar to the following, which was copied from Mrs. Zimmerman’s will:
    “First: I hereby give, devise and bequeath unto my beloved husband Theodore A. Zimmerman, all my estate, both real and personal, of whatsoever kind or wheresoever same may be situate to have and to hold unto my said husband for and during the term of his natural life, with full power and authority to sell or otherwise dispose of, mortgage, or in any way encumber the whole or any part of said property, as he shall see fit.
    “Second: Upon the death of my said husband I give and bequeath out of any of my estate which may remain unto my grandchildren, Theodore Zimmerman, Harold' Zimmerman and Carl McDermott four hundred ($400) dollars each and to my grandchildren Carl Zimmerman and Anna M. Zimmerman one hundred ($100) dollars each.
    “Third: All the residue of my estate, if any, I give, devise and bequeath to my three children, Harold Zimmerman, Emily McDermott and Arthur A. Zimmerman, equally to be divided among them, share and share alike.”
    By the -codicil to his will, which Mr. Zimmerman executed after the death of his wife, he made some slight reductions in some of the bequests. The defendant Arthur A. Zimmerman was named and has qualified as executor of both wills.
    On March 2d, 1912, he filed an inventory of Mrs. Zimmerman’s estate showing that it consisted of household effects and bonds and mortgages amounting to $15,750.22, 'and on the same day, at the request of Theodore A. Zimmerman, the executor delivered to him all the property constituting Mrs. Zimmerman’s estate, and in his accounting, filed on March 12th, 1917, the executor prays allowance for “all personal property delivered to Theodore A. Zimmerman, sole legatee or beneficiary under the will of Annie M. Zimmerman, deceased,” for the above-mentioned value of the estate.
    In January, 1917, defendant, as executor of Theodore A. Zimmerman, filed an inventory of his personal estate showing it to be valued at $16,053.56.
    This controversy arises because complainants, who are entitled to the same interests in the estate of Mr. Zimmerman that théy are in that of his wife, who had no creditors, are fearful that the creditors of Mr. Zimmerman, including the defendant Arthur A. Zimmerman, may claim that the assets received by Mr. Zimmerman from his wife’s estate are part of his estate, and that they will resort to and possibly exhaust such assets in the settlement of their claims against his estate.
    It is conceded that Mr. Zimmerman’s interest in his wife’s estate was expressly limited to a life estate with power to sell or dispose of the whole or any part of it as he saw fit, and complainants claim that under the rule of Borden v. Downey, 35 N. J. Law 74; S. C., 36 N. J. Law 460; Pratt v. Douglas, 38 N. J. Eq. 516, and Wooster v. Cooper, 53 N. J. Eq. 682, that the annexing of the power of disposal to the certain and express words of the will limiting Mr. Zimmerman’s estate for his life only, will not enlarge his interest so that he will receive the estate absolutely.
    Defendant insists, however, that the circumstances present in this case except it from the general rule, because he claims that Mr. Zimmerman' exercised the power of disposal given him by the will, by demanding and receiving as the life beneficiary the entire estate of his wife; and Robeson v. Shotwell, 55 N. J. Eq. 318; affirmed at p. 824, is relied on to support this contention. But I do not find this case to support this contention, or the facts to establish the exception claimed.
    It appears from the record that at the time of his death, Mr. Zimmerman was in possession of the greater part of his wife’s personal estate that he had received from her executor; that when the executor delivered her estate to him he did so by delivery merely, and did not formerly execute and deliver to him any assignments of the bonds and mortgages and other securities constituting the valuable part of her estate. It also appears that a few mortgages for small sums, and amounting to less than $1,000, were paid to Mr. Zimmerman, and that he had consented to the substitution of security for a bond and mortgage of $12,000 from one hotel property owned by one Mount to another hotel property owned by the Zimmerman Hotel Company, and that defendant, individually, owns all but two shares of the stock of this company, and that at the time defendant delivered his mother’s estate to his father he obtained m* receipt therefor and his father refused to give him any.
    Prom these facts I have reached the conclusion that Mrs. Zimmerman did not intend to bequeath an absolute estate to her husband, but gave him a life estate only, with a power of disposal during his life as he saw fit, and I also find that Mr. Zimmerman did not by the mere demand for and the receipt of her estate thereby exercise his power of disposal and in consequence enlarge her bequest of a life estate into an absolute gift. This latter conclusion is based on these considerations: The transfer of Mrs. Zimmerman’s estate by her executor to her husband was merely the delivery of the possession of her securities to him as the life beneficiary; this occurred before her estate was administered or settled, and Mr. Zimmerman, as the legatee for life with absolute power of disposal, was entitled to their possession, if he desired them, as the bequest was made by testatrix’s will to him personally, and not to her executor or in .‘trust for him. The defendant as her executor could under the statute have refused to deliver them to him, unless he gave security for their return, but this he did not do. Comp. Stat. p. 3089 § 8; Executors of Rowe v. White, 16 N. J. Eq. 411; Courter v. Howell, 33 N. J. Eq. 80; In re Ryerson, 26 N. J. Eq. 43; Dodson v. Sevars, 52 N. J. Eq. 611 (at p. 617). The demand for and receipt of his wife’s estate by Mr. Zimmerman was merely the exercise of his right to their possession as the legatee for life, independent of the power of disposal given him by her will; and, judging from the result, this demand for the possession of her assets was probably made with the intent to preserve instead of to dispose of them. Had his demand for possession of the assets of the estate been made with the intention of disposing of them, it is reasonable to assume that he would have demanded the formal assignment of them to him in order to have evidence of his title to them. Furthermore, I find that Mr. Zimmerman, except to a very limited extent, never attempted to exercise the power of disposal given him by her will. The terms of this power are that he is to enjoy her estate for life, “with full power and authority’ to sell, or otherwise dispose of, mortgage or in. any way encumber the whole or any part of said property as he shall see fit.”
    From the proofs it appears he did not sell or otherwise dispose of the whole or any part of her property, or do any act in relation to it, with the exception of collecting the few small mortgages I have mentioned, and the proceeds of which can well be considered as part of his inventoried estate. It also appears that he did not mortgage or in any way encumber the whole or any part of the property; and it also appears that at the time of his death he was in possession of most, if not all, of her estate, in substantially the form in which he received it, and that the same is now in the possession of the defendant as his executor; and I regard it as significant that the inventoried value of his personal estate is but a few hundred dollars in excess of the value of his wife’s estate turned over to him by her executor, and this excess can probably be accounted for as part of the unexpended income received from her investments. I am satisfied that Mr. Zimmerman, instead of intending or attempting to exercise the power of disposal granted him; exercised his control over his wife’s estate to preserve it intact for the object of his wife’s and his own bounty, and did not dispose of any part of it.
    With the exception of the small mortgages he collected, I find Mr. Zimmerman did not exercise the power of disposal of her property given him by his wife’s will, and that her declaration as expressed in her will can be carried into effect by holding that Mr. Zimmerman’s estate in her property was not absolute, but was limited to his life, and that so much of her estate as remained undisposed of at his death should be distributed in accordance with the express provisions of her will.
    A decree will be advised that the defendant individually and as executor of both wills account in this court for such undisposed portion of Mrs. Zimmerman’s estate and make distribution thereof among those entitled thereto under the terms of her will.

      Messrs. John S. Applegate & Son, for the respondents.

      Mr. Charles E. Cook, for the appellants.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Foster.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.

For reversal — None.


text:
    Henrey Krouse, trustee, respondent, v. Francis J. Palmer et al., appellants.
    [Decided May 3d, 1918.]
    On appeal from a decree of the court of chancery, advised by Vice-Chancellor Foster, who filed the following opinion:
    This bill is filed to foreclose a mortgage given by the Development Realty Company to the defendant Palmer, and assigned by him to complainant.
    At the conclusion of the hearing and on tire brief submitted by counsel for the defendants, it was conceded that
    “the fact that the defendant Palmer was the actual owner of all the stock of the Development Realty Company which made the mortgage, destroys the defence set up by the answer of the Development Realty Co., namely, that Palmer was without power to make an assignment which increases the obligations of the company under the mortgage.”
    The elimination of this contention leaves for determination the question whether there was any consideration for the assignment of the mortgage by Palmer to complainant.

      The established facts relating to this inquiry are that complainant and others, for whom he holds the mortgage as trustee, are, or were, directors of the First National Bank of Roselle, and that John M. Walsh was the cashier of the bank. Some time in March, 1913, Walsh, as cashier, without the authority or knowledge of the bank directors, invested $8,000 of the bank’s funds in the purchase of participating certificates in the notes of the St. James Company, Inc. The principal and interest of these notes were secured by, anid were to be paid in certain installments from rentals received from the St. James building, owned by the company in New York City. When the bank directors and the executive committee learned of this investment which Walsh had made, they refused to ratify it; censured him for making it, and demanded that he reimburse the bank for the amount of the investment or furnish satisfactory security for the same.' Walsh, at the time, was unable to do what the directors demanded. While negotiations looking to a settlement with him were pending, the company paid in installments $3,300 on the notes and defaulted on the remainder. The matter finally came to the attention of the bank examiner and the controller of the currency, and as a result of their criticism that the investment was illegal, the directors personally paid the balance due the bank, and did so at the request and On the promise of Walsh that he would secure them and the bank against loss. This he attempted to do by giving his personal note secured by bonds of the Napa Company of California. The directors refused to accept these bonds as collateral and thereupon Walsh and his friends induced the defendant Pakner to assign the mortgage in question to complainant as trustee for the directors.
    The liability which the directors assumed at Walsh’s request was originally $4,800. This was later, reduced to $3,600 by a payment of $1,300, made- by the company, and again reduced to the amount now claimed of $3,300 by a payment of $400 made by Walsh.' Before the directors settled with the bank and while the investment was under criticism, intimation of criminal prosecutions against Walsh, or of his discharge as cashier, were made by one or more of the directors, and Walsh in’ order to repay what the directors claimed he owed the bank, and to prevent his discharge, which he claimed would prevent him obtaining another position, promised in effect that if the directors would act to relieve the bank from any possible loss arising from the investment and himself from the consequence of making the unauthorized use of the bank’s money, he would repay them and furnish them with security for any such liability they assumed. Thereupon Palmer, a friend of Walsh, was approached by Walsh and his friends about the matter and informed of the situation; and in order, as he states, to help Walsh out of the trouble with the bank, Palmer assigned the mortgage in question to complainant as trustee, to secure him and his co-directors for any money they paid in settling the bank’s claim against Walsh.
    Palmer now claims this was not his intention when he made the assignment; that he understood Walsh was in some trouble with the bank and was called upon to pay or secure the payment of money which he owed the bank, and that he intended by the assignment to secure the bank, and not the directors, for the money owing by Walsh. Palmer claims he had only the most vague idea of the trouble between Walsh and the directors of the bank. He was suspicious that Walsh might be prosecuted or might be discharged from his position as cashier, and was anxious to help him out of his trouble.
    It appears, however, that when Palmer executed the assignment to complainant, he asked for whom Krouse was acting as trastee, and was told that he was acting for himself and other directors of the bank, and he knew that he was giving security for $3,600 due on the St. James loan. I am satisfied, although he does not now recall the matter, that he was fully acquainted with the situation when he made the assignment. To secure Palmer in the matter Walsh assigned to him the Napa Company bonds, and two years later Palmer found they were worthless. On the same day Palmer assigned the mortgage to complainant Walsh also gave complainant, as trustee, his note for $3,600, payable in three months, and at or about this time the directors paid the balance due the bank.

      Summarized, the situation presented by these facts is, that Walsh acknowledged 'he had made an improper and unwarranted use of the bank’s funds, and in consequence was obliged to save the bank from loss; that he personally was unable to do so and requested complainant ,and his co-directors to do it for him, promising to secure them against loss, and to repay them what they had paid on his account; that Palmer, with full knowledge of the situation, furnished this security at Walsh’s request and for Walsh’s accommodation and benefit, and delivered it to complainant as the promised security for the money paid by him and his co-directors at Walsh’s request and for his benefit. •
    In view of Palmer’s knowledge of the facts when he executed the assignment of the mortgage, and of the debt owing by Walsh to the directors at the time for the liability they had assumed and the money they paid at his request to keep him out of trouble, I am satisfied there was an actual valuable consideration for the assignment of the mortgage by Palmer to complainant, although the consideration did not move directly from complainant to Palmer or to the mortgagor, and it was not necessary that it should. Perkins v. Fidelity Realty Co., 69 N. J. Eq. 723; affirmed, 71 N. J. Eq. 304.

    The decree asked for will be advised.

      Mr. Nathan R. Leavitt, for the respondent.

      Messrs. Edwin B. & Philip Goodell, for the appellants.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Poster.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.

For reversal — Hone.


text:
    Fidelity Trust Company, executor, &c., respondent, v. Newark Milk and Cream Company et al., appellants.
    [Submitted March 25th, 1918.
    Decided May 3d, 1918.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevens, who filed the following opinion:
    This is a suit to compel the defendant company to transfer on its books a share of its stock to complainant. The defendant Rutz asserts title to the same share and asks similar relief.
    The complainant is the executor of William IL Bennett, who died in November, 1913. Bennett had been for many years general manager of the defendant the Newark Milk and Cream Company. In 1904 he was the owner of one hundred and twenty-five shares of its stock. This was half of its total issue of two hundred and fifty shares. The defendant Stanley A. Rutz had, in 1899, become its bookkeeper. In 1904'he says that he wanted to resign from the company. He did not. On the contrary, he was elected a director and vice president, and served as assistant, manager at an increased compensation. He continued in these positions until Mr. Bennett’s death, in 1913, when he became secretary and treasurer. In his answer and counter-claim, he says that prior to the month of May, 1904, he had rendered service to Bennett, in connection with Bennett’s personal affairs, for which he had received no compensation; that in May, 1904, he informed Bennett that unless he could then acquire at least one share of the capital stock of the company as his own property and become an officer thereof, he would sever his connection with it; that thereupon Bennett stated to him that it was his desire that he, Rutz, should remain in the company’s employ, and that if he would do so,

      “and in consideration of the service theretofore rendered by Mm to Bennett in his personal matters, he would transfer to Mm one share of stock from his own holdings, which share would thereupon become and thereafter be his own property; that if this was done, he (Bennett) desired to retain the certificate for such share and to receive and retain the dividends thereon during his lifetime, but that after Bennett’s death, he (Rutz) should have the certificate and be entitled to have it transferred to him of record.”
    This alleged agreement was not reduced to writing. As the controversy is between an executor, in bis representative character, on the one side, and Rutz on the other, the latter was' unable to give evidence of what occurred, and the alleged agreement has not been proved, at least directly.
    The question is, has it been proved circumstantially. The proof relied upon is the following: In 1904, and the years following, Rutz, at the stockholders’ annual meetings, voted as the owner of one share. He was elected and re-elected a director and vice president at meetings which Bennett as secretary recorded. In a certificate of change of name filed with the .secretary of state in April, 1912, Bennett is represented as the owner of one hundred and twenty-four shares and Rutz as the owner of one. In a report filed with the secretary of state in June, 1913, Rutz is stated to be a director and vice president. In the year 1913, the defendant company employed the New Jersey Registration and Trust Company to act as its registering agent. When the stock certificate book was being turned over, it appeared that stub Ho. 9, corresponding to the stock certificate in controversy, had not been filled in and the registration company’s agent called Mr. Bennett’s attention to the omission. After considerable questioning and cross-questioning on the subject, the agent testified as follows: “Q. Did you ask him who was the record owner and he answered that Stanley A. Rutz was the owner and the number of shares is one. A. That is right.”
    Then the agent filled in the stub with the name “Stanley A. Rutz.” This was nine j’ears after the alleged agreement was made and in the same year that Bennett died.
    This evidence shows that Bennett permitted Rutz to hold himself out to the world as the owner of a share and that Bennett admitted on one occasion that Eutz was the owner of the share in question. It does not show how Eutz became owner; it does not show the terms of the agreement under which he became owner and it does not show the consideration, if any.
    On the facts proved we might conjecture either that Eutz was a “dummy” director or that he had the promise of a share by way of gift, or that there was an agreement to give him a share based on valuable consideration. It will be noted that the proof fails to show that there was any actual transfer of any share or that Eutz ever received any dividend, although the company was paying dividends.
    . The evidence on the part of the complainant is as follows: Bennett was the owner of one hundred and twenty-five shares long prior to 1904. A certificate for one of these shares was made out in the name of Bennett’s son Robert, who, at the time it was issued, assigned it, by formal words endorsed on the back of the certificate, to his father, who thereafter and up to the time of his death, held it unassigñed and received and appropriated the dividends. Robert testifies that about the year 1906, when he saw Eutz sign his.name as vice president, he asked him if he was vice president and a stockholder, and he said “No;” that he was only a dummy stockholder. This conversation Eutz denies.
    It is well settled that as between the transferrer (Robert) and the transferee (William) title to the stock certificate was completely vested without transfer on the books. Matthews v. Hoagland, 48 N. J. Eq. 486; Farrell v. Passaic Water Co., 82 N. J. Eq. 97. The burden of proof is on Eutz. Bennett was, unquestionably, up to his death the legal owner. As between the complainant executor and the company, the former has the right to insist that a certificate be issued to it. Farrell v. Passaic Water Co., supra. Being thus the owner, it is for Eutz to show that Bennett made a contract founded on valuable consideration, to transfer the share to him. Uncertainty in the contract is fatal to a claim for specific performance. Myers v. Metzger, 63 N. J. Eq. 780; Potter v. Hollister, 45 N. J. Eq. 508; 46 N. J. Eq. 609.

      Tje question, therefore, is, lias a contract to' transfer, certain in all its parts, been shown? It seems to me that it has not. The court is asked to infer such a contract from three circumstances. First, that prior to 1901, Rutz had collected rents for Bennett personalty. There is nothing in the evidence to connect the obligation, if a.ny, to pay for the collection of these rents with any agreement to transfer. Second, that Bennett would not have permitted Rutz to vote as a stockholder, or act as a director, unless he really was a stockholder. But Rutz was not, on his own proofs, entitled to vote as a stockholder, although he did vote. His position was that of a man to whom stock had been promised but not transferred. A stockholder is not entitled to vote unless he be an original subscriber, or unless he be registered on the company’s books. Johnston v. Jones, 23 N. J. Eq. 216; In re Election of Directors, 61 N. J. Law 422; Chapman v. Bates, 61 N. J. Eq. 667. And no person can be elected a director unless he be at the time of his election a bona fide holder of some stock. Section 39 Corporation act. Are we at liberty to infer a contract, complete in all its parts, from an irregular act? Third, that Bennett admitted to Picking, the registrar, that Rntz was the record, owner of the share in controversy. He was, admittedly, not the record owner. But aside from this the admission does not show in what way he became so. His claim is consistent with any one of the three suppositions that 1 have mentioned. If either of the first two were made, the contract could not be enforced; for, of course, there would be none to enforce, if, as suggested by Robert Bennett’s testimony, Rutz were only a dummy director; and nothing is better settled than that equity will not direct the specific performance of a promise to make a gift, or to perfect an. imperfect gift. From what fact are we to infer a valuable consideration? It seems strange that this consideration was not regarded’as being of sufficient consequence to call for the immediate delivery of a share, whose face value was only $100, and to entitle the holder to the immediate payment of the dividends thereon.
    Counsel suggests that Mr. Rufcz’s agreement to remain with the company was a consideration. The difficulty with this is that it is not proved that he did agree in consideration of the promise to transfer. All that appears is that after having made a resolution to leave — a resolution that, as far as the proofs go, was not communicated to anjdtody, he stayed at an increased salary— an obvious consideration, and, without legal title, acted as a stockholder.
    While there must have been some arrangement between the parties, the evidence fails to disclose with certainty what it was. It cannot, therefore, under the well-settled rule be specifically performed.

      Mr. Francis Lafferty, for the respondent.

      Messrs. Lindabury, Depue & Faulks, for the appellants.
   Pee Curiam.

The decree appealed from will be -affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Stevens.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.

For reversal — Rone.


text:
    Fidelity Trust Company, executor, &c., of William H. Bennett, deceased, complainant-respondent, v. Newark Milk and Cream Company et al., defendants-appellants.
    [Submitted March 25th, 1918.
    Decided May 3d, 1918.]
    On appeal from the court of chancery.

      Messrs. Barrett & Barrett, for the appellants.

      Mr. Louis Hood, for the respondent.
   Per Curiam.

The ownership of the share of stock litigated in this cause being settled on the appeal of Rutz as being in the estate of William H. Bennett, the appeal of Newark Milk and Cream Company challenges that part of the decree below which holds that company accountable for dividends on said share paid to Rutz since the death of Bennett. The company relies on the fact that some six months before Bennett’s death, upon the inquiry of a Mr. Picking, who was connected with a company acting as the registered agent of the milk and cream company, he told Picking to enter the name of Stanley A. Rutz on the blank stub of the certificate for this one share, which certificate was not then nor at any later time produced to Picking, which Bennett then and until his death held in his own possession, and which never bore the name of Rutz at all. Prior to the time of this interview Bennett had received as his own the dividends on this share from the company, and continued so to do until his death, notwithstanding the entry oh the stub. This was admitted on the record, and is rather cogent evidence that the company recognized Bennett as the beneficial owner of the share in his lifetime, which in fact he was. Why his death should give Rutz any better status as a shareholder than he had in Bennett’s lifetime does not appear. Before paying to Rutz, the company was at least put upon notice of apparently conflicting claims. It seems to have made no investigation whatever, but to have based its change of attitude after Bennett’s death on the mere stub entry, which had been made in his lifetime under the circumstances related above, and had been ignored in paying dividends up to his death. Such payments it made after his death at its peril, and having paid to the wrong party must respond to the right one.

The decree is affirmed.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.

For reversal — None.


text:
    Jacob H. Brown, respondent, v. William Berry, appellant.
    [Decided May 20th, 1918.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevenson, who filed the following opinion :
    This memorandum will not undertake to discuss this case in all its aspects. While the evidence and arguments of counsel are fresh in my mind, I shall 'rest my decision of the cause in favor of the-complainant upon the consideration of certain facts which are for the most part admitted, or which I think have been clearly proved.

      The bill is filed under “the act to compel the determination of claims to real estate in certain cases, and to quiet the title to the same,” commonly and somewhat misleadingly called the “Act to quiet titles.” The complainant conveyed the land in question, a farm of eiglity-two acres, to the defendant, William Berry, and one Eleazer Thompson, now deceased, whose heirs or devisees are co-defendants with Berry. The price was $6,000, for one-half of which ($3,000) the complainant took back a purchase-money mortgage dated June ,23d, 1873, and payable in two years with interest at seven per cent. The price paid seems to have been large, but Mr. Berry testified that the purchase was made with the idea that there was a deposit of ore on the land, and that he and his co-speculator sunk several shafts during two or three years after the purchase and were disappointed in their expectations.
    Tn the year 1878 the interest was in arrear. There was a small house on the land which rented for seven or eight dollars a month. A portion of the land also was tillable, but a large part seems to have been, mountain land. It does not appear that any substantial rent could be obtained for the land beyond the seven or eight dollars per month for which the house and accompanying curtilage could be let.
    Tn 1878, the tenant of Messrs. Thompson & Berry had vacated and a “squatter” named Riclenor had taken possession. Mr. Brown, who had received the land by devise from bis father, and had lived on it in former years, desired to have his claim settled in some way, and no doubt was willing to take possession. He was temporarily residing or staying on the adjacent farm with his brother. An interview then took place which Mr. Brown thinks was near his brother’s farm, but which Mr. Berry says was at his (Berry’s) place at Westwood, Bergen county, New Jersey, a place quite remote from the farm. The indications are that Mr. Berry is right. It is important to know precisely what took place at this interview, and fortunately there is very little dispute between the only witnesses who can testify in regard to it. Mr. Brown had been dunning Mr. Berry for interest on his mortgage for some time and none had been paid. At least none had been received by Mr. Brown for several years. According to Mr. Brown he told Mr. Berry that something must be done as he wanted money and that Mr. Berry said: “I can’t pay you. You go back on the place.” Mr. Brown then referred to the occupant, Mr. Ridenor, and, according to Mr. Berry, there was a dispute as to whether there was any such person on the place. The result of the talk was that Berry gave Brown a letter addressed to the occupant which reads as follows:
    “Westwood, Sept. 2, 1878.

      “DeWiit Ridenor, Esq.

    “Dear Sir — I understand this day from Jacob Brown that you hare taken possession and occupy the premises, formerly owned by him and now owned by Mr. Thompson and myself. I hereby order you to vacate the same immediately under penalty of the law; deliver the key to Jacob Brown.
    “Truly yours,
    “Wm. Berry.’
    Mr. Brown, who, presumably, would not be recognized by the occupant, Ridenor, as the owner of the property, delivered the letter to Ridenor and the latter forthwith vacated the premises and Mr. Brown and his family took possession.
    I find nothing in the testimony of Mr. Berry which essentially modifies the transaction between himself and Mr. Brown, on September 2d, 1878, as that transaction is described in Mr. Brown’s deposition. I may say that Mr. Berry’s manner of testifying, and the air of superiority and control which he assumed, did not add to tlio credibility of his testimony. I think, however, while he added a little deceptive color he did not testify to anything which alters the character of the transaction as a surrender of mortgaged premises by a mortgagor who was behindhand in his interest to the mortgagee. In a somewhat lofty manner Mr. Berry says that Mr. Brown came to him stating that he had “spent all his money and had to move and had no place to move in, and wanted to know whether be could move in there.” Berry adds:
    “I said, under certain circumstances on account of Ms wife who used to live with us and we thought a great deal of her. On her account he could move in the place, but he should pay the taxes, and — well, move right away,”

      and then follows the account of the talk about Ridenor’s occupation ending with the letter to Ridenor.
    It was argued by one of the counsel for defendants that Berry and Brown made a contract by which Brown was to take possession and the use of the property should keep down the interest. I find absolutely nothing even in Mr. Berry’s testimony to suggest such a contract. It may be observed that the interest on Mr. Brown’s mortgage was $210 per annum, while the rent of the house was seven or eight dollars per month, say $100 a year, to which perhaps a small additional amount might be charged against Mr. Brown on account of such, portion of the farm as he intended to cultivate. Mr.. Berry may well have expressly charged upon Mr. Brown, the mortgagee whom he was suffering to take possession with the performance of his (Brown’s) duty as mortgagee in possession, to pay the annual taxes which were less than the rental value, but such an understanding or agreement would not affect the character of Mr. Brown’s possession.
    I see no reason to doubt that in this case the transaction between Berry and Brown was of the usual character where the mortgage is overdue, the interest in default and the only resident mortgagor is insolvent. The mortgagee in such cases often takes possession with the consent of the mortgagor.
    From the time Brown took possession of the farm, in 1878, until'the commencement of this suit, in 1915, a period of thirty-seven years, it is proved and not contested that neither Berry nor Thompson, nor any successor to Thompson, has made the slightest effort to interfere with the mortgagee’s possession or to do any act which in any way affects the character of that possession. During that, period no interest has been paid on the mortgage by anyone. Mr. Brown testifies that he does not remember having seen Mr. Berry after the interview of 1878, and that he never spoke to Mr. Thompson after that time. Mr. Brown remained in personal'possession and occupation of the farm with his family as a resident from 1878 until the death of his wife, in 1908, a period of thirty years, and since that time he has rented the place to tenants from whom he has collected the rent.
    In January, 1885, the farm was sold for taxes and bought in by the township committee of Pompton township for a term of thirty years. The complainant, Brown, testifies that his poverty caused his default in the payment of taxes, and the circumstances indicate that lie did not suffer this default in order to injure the owners of the equity of redemption or anyone else. It appears that after this salé was made the township held this term for about two years but made no effort to dispossess Mr. Brown. In February, 1887, Brown paid the township $25, which the township clerk says was entered on the township books as rent for the farm, and Mr. Brown seems to assent to that idea.
    On April 29th, 1887, the township committee transferred their certificate of sale to George W. Mickens, Mr. Brown's brother-in-law. Mr. Mickeng testified that he bought the term merely to save the home of his sister and her husband; that he made no effort to collect any rent, and that the understanding between himself and his brother-in-law was that he would hold the assigned term merely as security for the repayment to him of the amount which he paid the township committee. Mr. Brown and Mr. Mickens testify, and there is no other testimony on the subject, that in the course of a long period of years Brown paid back to Mickens the exact amount which Mickens had paid the township committee with interest, and that all claims of Mr. Mickens under the assignment of the term thereupon were discharged.
    When Mr. Berry bear’d of the sale for taxes he consulted 'counsel, he says, and learned that he could do nothing, and thereupon apparently conceived the idea that he could await the expiration of the term, take possession of the land as owner while the mortgage would be met with the absolute bar of the statute of limitations. There is some conflict in regard to this matter between counsel for Berry and counsel for the Thompson heirs. Counsel for the Thompson heirs, in arguing that Berry and Brown, in 1878, agreed that the occupation by Brown should discharge the interest on the mortgage, seems to point to the conclusion that the mortgage now stands with the interest paid from year to year in full, and that the decree in this cause in fixing and settling “the rights of the parties in said lands” should find that the defendants were the owners of the equity of redemption and that Brown is in possession under his mortgage upon which tlie principal only is now due.
    Neither Berry nor Thompson, nor any heir or devisee of Thompson, made inquiry in regard to the status of this tax title. If they had made inquiry of Mr. Mickens they would have learned that he was not claiming to hold the tax title in any other way than as a mortgage.
    I cannot adopt the views set forth in the answer or urged in the argument m regard to the character of Mr. Brown’s possession during the twenty-eight years between the time when Mr. Mickens radically changed the character of the outstanding tax title in 1887 and the commencement of this suit in 1915. We have seen that Brown entered into possession in 1878 as mortgagee. He was bound to pay the taxes. He could not acquire a tax title or have one acquired for his benefit which he could hold in hostility to the mortgagors. I do not consider that it is necessary to enter upon an elaborate discussion of the status of the parties concerned during the brief interval in which the township held this term of thirty years. The defendants still held the equity of redemption in the fee, and Mr. Brown still held his mortgage on the fee, and Mr. Brown remained in possession, having originally taken possession as mortgagee. Many interesting questions relating to this mortgage arise out of the default of Mr. Brown with respect to his duty to pay taxes; but I do not deem it necessary to discuss them. As between himself and Berry and Thompson he was still in possession during the period when this tax title was outstanding as mortgagee and not otherwise, while as between himself and the township he might have been regarded as a tenant.
    However this may be, 1 think that the correct legal conclusion, is that when Mr. Mickens took an assignment of the tax title as a mere security for repayment to him of the amount of the tax lien, there can be no doubt that Mr. Brown’s possession became again, if it had not been continuously from the start, the possession of a mortgagee under his mortgage. He had no other title. He was not Mr. Mickens’ tenant. When he had repaid the taxes to Mr. Mickens he had only performed the duty which he owed to the mortgagors and the situation was precisely the same as it would have been if Mr. Brown had made no default and there had been no tax title.
    It is unnecessary to cite the authorities which hold that where a mortgagee takes possession under his mortgage, and holds possession for twenty years with no payment of interest and no agreement modifying the transaction, the equity of redemption is extinguished. Sometimes this title which the mortgagee in possession acquires has been confused with a title by adverse possession. It is not the adverse possession which ripens into an absolute title in the case of a mortgagee. The mortgagee is in possession under a conveyance of the fee. Anciently, the mortgagor lost all title in case the condition was not performed by him within the time stated — i. e., in ease the money was not paid according to the condition of the mortgage. Our law now allows the mortgagor to redeem within twenty years and limits him to that period. On the other hand, our modern law limits the right of the mortgagee to foreclose for the same period of twenty years. At an}r time during a period of twenty years, either from 1878 or from 1887, when Mr. Mickens bought the tax title — I have not considered it important to determine which would be the correct date — the defendants could have filed a bill to redeem, and it is hardly necessary to point out that Mr. Brown could not have set up the tax title in any way against them.
    In rendering his account as mortgagee in possession, Mr. Brown would have been credited with .the interest upon his mortgage, and the amount of the taxes paid by him, and would have been charged with the rental value of the farm. On the other hand, Mr. Brown might have filed his bill to foreclose and he would have been obliged to render precisely the same account. After the expiration of twenty years from the correct date, whichever of the two before mentioned might be taken, the defendants lost their right to redeem and the complainant lost his right to foreclose, and the complainant, in my judgment, plainly is in possession under his mortgage deed, and under that deed holds an absolute title in fee, the equity of redemption formerly in the defendants having expired.

      I have not referred to the improvements which Mr. Brown has made, the extension of the residence, &c., becanse I do not understand that there is any evidence going to show that Mr. Berry or any of the defendants had notice of such improvements.
    A decree will be advised for the complainant according to section 6 of the statute, 4 Comp. Stat. p. 5402 § 6.

      Messrs. Howe & Davis, for the respondent.

      Messrs. Hudson & Joelson, for the appellant.
   Pee Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below bjr Vice-Chancellor Stevenson.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams-11.

For reversal — None.


text:
    In the matter of the appointment of a guardian of Catherine Morrisey, a lunatic.
    [Decided May 3d, 1918.]
    On appeal from an order of the prerogative court, made by the ordinary, whose opinion is reported ante p. 759.

      Mr. William D. WolfsKeil, for the respondent.

      Mr. Herbert Clark Gilson, for the appellant.
   Pee Curiam.

The order appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Walker, ordinary.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Gardner — 12.

For reversal — None.


text:
    In the matter of the probate of the last will and testament of Samuel Richter, deceased.
    [Decided May 3d, 1918.]
    On appeal from a decree of the prerogative court advised by Vice-Ordinary Stevens, whose opinion is reported ante p. 162.

      Mr. William Greenfield and Mr. Benjamin M. Weinberg, for the appellants.

      Mr. William H. Osborne and Mr. David Hahn, for the respondents.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Ordinary Stevens.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner-13.

For reversal — None.


author: WaTiKEE, Chanoelloe.

text:
    In re Agnes Brown.
    [Decided September 12th, 1918.]
    1. When a married woman owning lands in this state desires to sell them but is unable to do so by reason of the lunacy or other incapacity of her husband to join her in the execution of a proper deed of conveyance. and petitions the court of chancery to direct her to convey, such lands without her husband joining her, under 3 Oomp. Stat. p. 3233 § 8g, and for the conservation of so much of the purchase-money as shall represent the interest of the husband in the lands sold, under'ISid. § Sr, the husband, whose rights are affected, must be made a party to the proceedings.
    2. The xmactice to be observed in such cases pointed out.

      On petition of a married woman to sell real estate as a feme sole.

      Mr. Edwin F. Crane, for the petitioner.
    This matter was referred to Bayard Stockton, Esq., advisory master, who filed the following conclusions:
    “The petitioner alleges in her petition that her husband. John O. Brown, has been a feeble-minded person since 1907, and since that date has, been confined in various hospitals for the insane, and that he was on September 9th, 1914, committed to the Camden County Hospital for the Insane as a private patient by the judge of the Camden county common pleas, and that he is still confined in that hospital; that on March 8th, 1916, and on May 14th, 1917, the petitioner purchased with her own money certain lands in Haddonfield, Camden county, particularly described in the petition; that she is desirous of conveying said lands, and prays that the merits of her application may be inquired into and that she may be permitted to sell said premises and to execute proper deeds or conveyances therefor.
    “It does not appear from the petition whether or not the petitioner and her said husband had issue, the fruit of their marriage, but this is not material for the purpose of this application. The petitioner applies for an order of reference on filing the i^etition.
    “The statute invoked is found in Comp. Stat. p. 3233 §§ 8q and 8r. Section 8q provides that in case any married woman owning lands situate within this state shall desire to convey the same, but shall not be able to do so by reason of the lunacy or other mental incapacity of her husband to join with her in the execution of proper deeds or conveyances therefor, it shall be lawful for the court of chancery, upon petition filed for that purpose, to direct that such married woman may convey the said lands by deed or deeds executed by herself without concurrence of her husband, which deeds shall convey the lands free from any claim, estate or right of the husband, and shall be an absolute bar to any right of curtesy therein.
    “Section 8r provides that the court of chancery may, in a summary manner, inquire into the merits of the application by reference to a master or otherwise, and in case the court permits such deed to be made, said court shall ascertain the actual value of the estate or interest of the husband, and that the value thereof shall be paid out of the purchase-money to the committee or guardian of the lunatic or incapacitated husband, or, if there be no such guardian, to the clerk of the court.
    “The husband of a married woman has an actual estate or interest in the lands of his wife, capable of being estimated and valued. Doremus v. Paterson, 69 N. J. Eq. 188; affirmed, Ibid. 775; Hackensack Trust Co. v. Tracy, 86 N. J. Eq. 301. The interest of the husband in the wife’s lands does not depend on the birth of issue. His interest is that of a contingent estate in remainder before issue born. Hackensack Trust Co. v. Tracy, supra.

    “The petition alleges that the husband is now non compos mentis. As his rights are to be affected by this proceeding, he must be made a party thereto and have an opportunity, of making a defence. In re Martin, 86 N. J. Eq. 265.

    “He should be served with process, and brought into court, not necessarily by writ of subpoena or other writ.
    “The proper practice in this case is that an order be made on John C. Brown to show cause why the prayer of the petition should not b.e granted, and a certified copy of the petition and affidavits and of the order be served upon him in tire presence of some competent person. If upon the return of the order Mr. Brown does not appear, the clerk of the court will be assigned and appointed guardian ad litem to appear and answer for him. An order of reference will then be made to a special master, and the matter may be brought on for a summary hearing. This is in conformity with the practice adopted in In re Martin, supra, where the incapacitated party was a widow entitled to an estate in dower.”
   WaTiKEE, Chanoelloe.

An order will be made in conformity with the advice contained in the conclusions of Advisory Master Stockton, which are hereby adopted as the opinion of the court.