text:
    Isaac Kamens, complainant, v. Edward Anderson, Jr., and Agnes I. Anderson, his wife, defendants.
    [Submitted May 20th, 1926.
    Determined May 28th, 1926.]
    1. The statute of frauds does not require a contract for the sale of real estate to be signed by both parties to the contract.
    2. The requirement of the statute of frauds that a contract for the sale of real estate must be signed by the party to be charged therewith means the party sued.
    3. A contract in the body of which the name of the vendor is specified, and the name of the vendee is specified as “Isaac Kamens, or his nominee,” meets the requirement that the name of both parties to the contract shall appear in or by the writing, notwithstanding the contract is signed “Isaac Kamens, Agent,” below the signature of the vendor; and a bill for specific performence may be maintained by the vendee named in the body of the contract as the person for whose benefit the contract was made.

      4. The requirement for mutuality of obligation of the performance is met by the filing of the bill.
    On bill for specific performance. On hearing on motion to strike out bill.

      Messrs. Knight & Orlando, for the motion.

      Mr. Carl Kisselman, opposed.
   Leaming, V. C.

Defendant, as vendor in a contract for the sale of land, has moved to strike out a vendee’s bill for specific performance. The contract is signed by the vendor and is signed by the vendee in the following manner: “Isaac Kamens, Agent.”

Our statute of frauds does not require a contract for the sale of real estate to be signed by both parties to the contract. The requirement is that it "shall be in writing and signed by the party to be charged therewith, or some other person thereunto by him or her lawfully authorized.” The great weight of authority is to the effect that the phrase, "party to be charged,” means the party sued, and that the signature of the other party is not essential. See authorities collected in the American notes to Laythoarp v. Bryant, 2 Bing. N. C. 785, in 6 Eng. Rul. Cos. (at p. 254); also, Pom. Spec. Perf. (3d ed.) §§ 75, 170. But the courts, with great uniformity, also have held that the substantive parts of the contract must appear in the writing; accordingly the name, or a sufficient description of the party seeking enforcement of the contract, is indispensable, because without it no complete contract is shown. See cases collected in 25 R. C. L. (at p. 656), including Johnson v. Buck, 35 N. J. Law 338, and Clement v. Young-McShea Amusement Co., 70 N. J. Eq. 677. The contract here in question meets that requirement, since in the body of the contract it is set forth that it is “between Edward Anderson, Jr., and Agnes I., his wife, * * * of the first part, hereinafter called the sellers, and Isaac Kamens, or his nominee, * * * of the second part, hereinafter called the buyer.” The bill herein has been filed by Isaac Kamens in his own right and not by a nominee.

In support of the motion herein stress is made of the circumstance that the contract is signed "Isaac Kamens, Agent,” after the signatures of the vendors. This would be fatal to recovery but for the fact that the body of the contract specifically designates the vendee, since a vendee, undisclosed 'by the written contract, could not be supplied by parol. Schenck v. Spring Lake Beach Improvement Co., 47 N. J. Eq. 44. But in view of the fact that the vendee in this contract is specifically disclosed, and that it is unnecessary for the vendee to sign, the signature, “Isaac Kamens, Agent,” may be herein regarded as immaterial. Had this contract been signed by the vendor and by "John Smith,” the obligation of the -vendor to convey to the vendee specified in the body of the contract would have obtained. In its completed form as executed the contract of the vendor is for the benefit of the vendee specifically named in the body of the contract. In such circumstances the party for whose benefit the contract is made is entitled to enforce it. Pom. Spec. Perf. § 486; Van Dyne v. Vreeland, 11 N. J. Eq. 370; Pruden v. Williams, 26 N. J. Eq. 210; Cubberly v. Cubberly, 33 N. J. Eq. 82; affirmed, Ibid. 591; Joslin v. New Jersey Car Spring Co., 36 N. J. Law 141.

So far as mutuality of obligation of performance is concerned, that requirement was fully met when the vendee specified in the body of the contract filed his bill herein. Cohen v. Pool, 84 N. J. Eq. 77; affirmed, Ibid. 189. Prior cases in this state to that effect are collected in Pom. Spec. Perf. (3d ed.) note “a” to § 170.

The motion to strike out the bill must be denied.


source: Caselaw Access Project

author: Leaming, V. C.

license: Public Domain

text:
    Commercial National Trust and Savings Bank of Los Angeles, complainant, v. Huizinga Hamilton et al., defendants.
    [Submitted May 28th, 1926.
    Determined June 8th, 1926.]
    1. In an action at law to recover judgment on a promissory note the defense of fraud in the inception of the note is available in a court of law to the same extent as in a court of equity.
    2. The court of chancery will not grant relief against a judgment at law on the ground of its being contrary to equity, unless the defendant in the judgment was ignorant of the facts in question pending the suit, or the facts could not have been received as a defense, or unless he was prevented from availing himself of the defense by fraud or accident, or the act of the opposite party unmixed with negligence or fraud on his part, and it is immaterial whether the defendant has presented to the law court the matter which he claims as the ground of his relief or through negligence has failed to present it.

      On bill for discovery, &e. On hearing'on motion to strike out counter-claim.
    The bill herein has been filed by a judgment creditor of defendant Hamilton in aid of an execution issued on the judgment. It seeks discovery and r.elief against alleged fraudulent conveyances by the judgment debtor.
    Defendant has answered and has appended to his answer a counter-claim. The sufficiency of the counter-claim is now brought in question by complainant’s motion to strike it out.
    The counter-claim discloses that the judgment was entered in the law court on a promissory note made by defendant Hamilton, and alleges that the note was procured by one H. Tyree and certain associates, who are made defendants to the counter-claim through fraudulent connivances and misrepresentations, and is without consideration. Complainant is not alleged to have been a party to the original fraud. The averments of the counter-claim touching complainant are as follows:
    “4. The complainant, (Commercial National Trust and Savings Bank of Los Angeles, is not the dona fide holder of the said notes on which it recovered the judgment mentioned in the complaint. If complainant ever held the notes sued on to its own use it did not become the holder of the same in due course, because it made no inquiry in good faith into the facts and circumstances under which said note was given, if the same ever was signed 'by defendant, and if it had made reasonable inquiry in good faith the facts herein-before and hereinafter in this answer and counter-claim set out would have been readily ascertained and disclosed.
    “5. Said bank is not now the holder of said notes sued on in good faith to its own use; it did not cause the note to be presented for payment and protested when due, but permitted the endorsers to be released also; prior to the institution of the suit the said H!. Tyree sought to employ counsel, other than its present counsel, to sue on said notes to the use of the Tyree Chemical Company and/or the use of H. Tyree. And defendants charge that if the said notes ever were held by the plaintiff bank to its own use in due course it has, in fact, required the said • H. Tyree and the H. Tyree Chemical Company to take up said notes and pay to the (bank the amount they had advanced thereon at the time it was discounted, if, in fact, it ever was discounted, and that said suit in the common pleas is carried on under cover of the bank’s name in order to cover up and protect H. Tyree and the H. Tyree Chemical Company to whose actual use the action is being prosecuted.”

      The counter-claim seeks to enjoin the enforcement of the execution issued on the judgment.

      Mr. Frank R. Bacon, for the complainant, for whom appeared Mr. Walter H. Bacon, for the motion.
    ' Mr. J. Roy Oliver, for the defendants, for whom appeared Mr. Louis H. Miller, opposed.
   Leaming, V. C.

No averments are to be found in the counter-claim either touching complainant’s status or the relief sought, which were not available as a defense to the note in the law court to the same extent as in a court of equity. Even should the averments of paragraphs 4 and 5, above quoted, be deemed adequate to charge complainant with a knowledge of the fraud alleged touching the execution of the note, such fraud was available as a defense in the law court. Duncan, Sherman & Co. v. Gilbert, 29 N. J. Law 521; Hamilton v. Vought, 34 N. J. Law 187; Haines v. Merrill Trust Co., 56 N. J. Law 312; Mueller v. Buck, 71 N. J. Law 486; Woolsey v. Woolsey, 72 N. J. Eq. 898, 903.

We are not here concerned with the right of a court of equity to restrain the prosecution of an action at law before judgment has been entered in the law court, upon a bill based upon equitable defenses equally available in both courts, since the counter-claim here in question was filed after judgment had been entered in the law court. In the latter situation, the principles on which a court of equity may afford relief, appear to be well defined.

In the absence of laches an equitable defense, which the law court could not entertain, may be made the basis of equitable relief, even after judgment in the action at law. Smalley v. Line & Nelson, 28 N. J. Eq. 348; Hughes v. Nelson, 29 N. J. Eq. 547; Headley v. Leavitt, 65 N. J. Eq. 748; Atlantic City Railway Co. v. Johanson, 72 N. J. Eq. 332. And when an equitable defense has been tendered and rejected by the law court relief may be entertained in equity without first reviewing the action of the law court. Headley v. Leavitt, supra; Gallagher v. L. and B. Eagle Brewing Co., 86 N. J. Eq. 188. So may a court of equity restrain the prosecution of an action at law in order to reform an instrument or cause it to be surrendered and canceled. Metler’s Admr., v. Metler, 18 N. J. Eq. 270. Whether relief of that nature may be awarded after judgment at law need not be here considered, since the counter-claim seeks no such relief. Where a defense of accord and satisfaction has been made in law court, and has failed only by reason of incomplete satisfaction of the award, equity has relieved against the judgment. Headley v. Leavitt, supra. Relief has also been afforded against a judgment where the facts on which the equitable defense is based were unknown to the defendant at the time of the trial in the law court, or the judgment was fraudulent procured. Mechanics National Bank v. Burnet Manufacturing Co., 33 N. J. Eq. 486. Also, it has been held, though questioned, that in a court of equity the rules of evidence are more liberal than in a law court in permitting proof of a parol contract made at the time that a written contract has been executed, and that view has been made the ground of relief against a judgment at law. O’Brien v. Paterson Brewing and Malting Co., 69 N. J. Eq. 117. But the counterclaim filed herein is wholly based on fraud in the execution of the note, and is sought to charge complainant, as holder of the note, with the consequences of that fraud; the claim is that by reason of that fraud no contract existed, and not that a different contract was made. In an inquiry of that nature the law tribunal in no way is restricted in its jurisdiction or procedure.

The general rule which has been uniformly recognized in this state touching bills to restrain the enforcement of a judgment at law is substantially as follows: “The court of chancery will not relieve against a judgment at law on the ground of its being contrary to equity, unless the defendant in the judgment was ignorant of the facts in question pending the ¡suit, or the facts could not have been received as a defense, or unless he was prevented from availing himself of the defense by fraud or accident, or the act of the opposite party, unmixed with negligence or fraud on his part; and that it matters not whether the defendant has presented to the law court the matter which he claims as the ground of his relief or through his negligence has failed to present it. Kinney v. Ogden, Admr., 3 N. J. Eq. 168; Reeves v. Cooper, 12 N. J. Eq. 223; Brick v. Burr, 47 N. J. Eq. 189; Woolsey v. Woolsey, 71 N. J. Eq. 609; affirmed, 72 N. J. Eq. 898; Clark v. Board of Education, 76 N. J. Eq. 326. In the latter case the rule is summarized as follows: “Equity interferes with judgments at law only where there has been fraud, or mistake, or accident in procuring the judgment and where the legal remedies are inadequate.” In Woolsey v. Woolsey, supra, Mr. Justice Swayze, speaking for the court of errors and appeals, defines the rule as follows: “Haying thus, by acts of omission and commission, led to the result of which they -complain, they ought not to be allowed to set it aside. To permit that would amount to permitting suitors to experiment with the court, and if defeated in one court to resort to another. The principle upon which courts of equity intervene by way of injunction to restrain judgments in courts of law are applicable to a suit to restrain the enforcement of a decree of the orphans court. Those principles are thus stated in Mechanics National Bank v. Burnet Manufacturing Co., 33 N. J. Eq. [6 Stew.] 486 [at p. 488], and affirmed on the vice-chancellor’s opinion [36 N. J. Eq. 8 Stew. 344] : ‘Courts of equity sometimes give relief against judgments at law, but only where it is shown that the defendant was ignorant of the facts on which his defense rests until after the time for making defense at law had passed, or that he was prevented from making defense by the artifice or fraud of his adversary, ox by accident unmixed with negligence of fraud on his part, or that his defense is a matter of pure equity cognizance. But in cases where the grievance he attempts to urge is one that the court which pronounced the judgment is competent to hear and decide, and he has either urged it there unsuccessfully, or has negligently omitted to do so, this court can give no relief.’ In Phillips v. Pullen, 45 N. J. Eq. [18 Stew.] 880, where a question of fraud was raised, this court said: Tn so far as this contention rests upon fraud in the procurement of the written corn tract, it is no longer an open question. That was one of the issues directly involved in the suit at law. If true, there could have been no recovery. The thing to be proved and the quantum of proof do not differ in two jurisdictions/ and it was held to be res judicata that the agreement was not the product of fraud. In Ruck elschaus v. Oehme, 48 N. J. Eq. [3 Dick.] 436, [on appeal under the name of Borcherling v. Ruckelschaus, 49 N. J. Eq. — 4 Dick. 340], the jurisdiction of chancery was sustained only because the court of law overruled the defense of equitable estoppel, and it was held that the defendant had the option either to test the accuracy of that ruling by a writ of error or to accept it as the law of the case and present his defense to the court of chancery as one not cognizable by a court of law. The learned vice-chancellor has said [48 N. J. Eq. — 8 Bide. 445] that it was not for his adversary, on whose motion the defense at law had been excluded, to say that the ruling of the trial court was wrong and should have been tested by a writ of error. This court said that if he had taken a writ of error he would be undoubtedly estopped from litigating the same question anew in another court.”

It should be here noted that the answer accompanying the counter-claim filed herein states: “Defendant Huizinga Hamilton is now seeking to open said judgment, praying leave to defend the same.”

Gallagher v. L. and B. Eagle Brewing Co., 86 N. J. Eq. 188, is relied upon in opposing the present motion. I am unable to discern in that ease any departure from the rules theretofore defined by that court. In that case the law court had declined to entertain the defense presented. Eollowing Headley v. Leavitt, there cited, it was held that equitable relief could be awarded 'without defendant first reviewing the ■ ruling of the legal tribunal. Also, in that case, the bill sought the surrender of the note; following Metier v. Metier’s Admr., there cited, that relief was held appropriate. Also, that case, like O'Brien v. Paterson Brewing and Malting Co., there cited, involved a claim of parol proofs to vary the terms of a -written instrument. Here the claim is fraud in the procurement of the written instrument.

The motion to strike out the counter-claim will be granted.


text:
    J. Rodman Paul, trustee for Lucy P. Bigelow under the will of John Marshall Paul, deceased, complainant, v. Frederick M. Paul, Rosalie P. Pisek, J. Rodman Paul, executor of Lucy P. Bigelow, deceased, et al., defendants.
    [Submitted June 7th, 1926.
    Determined June 17th, 1926.]
    1. Whether the donee of a power duly executed it depends upon the intention of the donee as gathered from the terms of the will, but the terms of the will must be viewed in the light of circumstances surrounding testator at the time the will was executed.
    2. To aid in the determination whether the donee of a power intended to execute the power by his will, evidence is admissible showing the conditions of the donee’s estate and of the trust fund subject to the power of appointment.
    3. Where the donee of a power has practically no property of his own and by his will makes money bequests in large amounts aggregating approximately the amount of the trust estate over which he had power of disposition by his will, the circumstance that in his will no specific reference is made to the power should not be regarded as sufiicient to negative an intent to exercise the power if by necessary implication that intent is otherwise clearly manifest.
    4. Where there is practically nothing for the will of the donee of a power to operate upon except the property over which he had the power of disposition by his will, the power will be deemed exercised in the absence of other controlling elements.
    5. Evidence of testator’s declarations as to what he intended distinguished from declarations disclosing what certain word® signified to testator in his accustomed understanding and use of those words— the latter held, competent to identify which of two objects the words referred to.
    On final hearing on bill for eonstrnction of will.

      Messrs. Starr, Summerill & Lloyd, for the complainant.

      Messrs. Lindabury, Depue & Faulks, for the defendants Elizabeth Paget, Laura Paul et al.

      Messrs. French & Richards, for the defendants Frederick M; Paul and Rosalie P. Pisek.
   Leaming, V. C.

The single inquiry herein presented is whether by the provisions of her will testatrix intended to exercise the power of appointment which she enjoyed under the will of her father.

Nowhere in her will does testatrix make specific reference to the power. Standing alone, the instrument would be declared inoperative upon the trust estate. Farnum v. Pennsylvania Co., 87 N. J. Eq. 108; affirmed, Ibid. 658. But when the provisions of the will are viewed in the light of extrinsic circumstances disclosed by the evidence, it seems impossible to doubt that it was the obvious intent of testatrix to exercise the power given to her under her father’s will. Viewed in the light of these circumstances the major provisions of the will are practically futile and without any sane purpose or rational intent with any other meaning attributed to them. The situation presented is that of a testatrix with power to dispose of the trust fund by her will, and with practically no property of her own to dispose of. In that situation she made a great number of money bequests ranging from $300 to $3,000 in amounts, and aggregating, approximately, the amount of the trust fund. Since there was practically nothing for these several bequests to operate on except the trust fund, and under the trust testatrix was clothed with power to make these bequests, it seems unmistakably manifest that in making the bequests she was exercising that power. The -circumstance that in her will she made no specific reference to the power should not be regarded as sufficient to negative that intent, if, by-necessary implication, the intent is otherwise clearly manifest. Cueman v. Broadnax, 37 N. J. Law 508, 513; Mun-son v. Berdan, 35 N. J. Eq. 376; Wooster v. Cooper, 59 N. J. Eq. 204, 223; Meeker v. Breintnall, 38 N. J. Eq. 345, 356; Lippincott v. Haviland, 93 N. J. Eq. 585, 587. Nor is that intent less clear by reason of the circumstance that many years later assets came to testatrix through causes that no one reasonably could have anticipated at the time the will and its codicil were made. The testimony to the effect that at the time the will and its codicil were made testatrix owned practically nothing on which these bequests could operate, except the trust estate, is not as searching as might well be desired, but it adequately discloses that obvious situation.

The only circumstance which may be said to militate against the conclusion that it was the plain intent of testatrix- to exercise her power of appointment, is the fact that in the residuary clause of the will testatrix used the expression "my estate.” In the special circumstances of this ease that, to my mind cannot be said to overcome the views already expressed. The evidence discloses that only two days before the date of her will testatrix wrote to her trustee, saying: "Will you kindly tell me about the amount of my estate in your hands as trustee so that I can make disposal of it more intelligently in my will.” It is clear that this letter and the testimony disclosing the custom of testatrix to refer to the trust fund as her estate cannot be received as evidence in aid of construction, except, at most, for carefully limited purposes and in special circumstances; but I am convinced that in the special circumstances of this case that letter and testimony cannot be wholly ignored. It will be noted that the general situation presented is one in which, through competent -extrinsic evidence disclosing the property owned by testatrix and her power of appointment, it has been found that two estates existed from one or both of which the bequests may have been intended to be paid — one the estate of testatrix, which was almost infinitesimal as compared with the amount of the legacies ordered paid — the other the ample: trust estate of the father of testatrix, the income of which had long been paid to testatrix, and of which testatrix had the power of disposition by her will. By these parol proofs of surrounding circumstances a latent ambiguity was created as to whether the combined property, or only the meagre property of testatrix, was by her intended to discharge these legacies. This, to my mind, brings the case within the spirit of the general rule that declarations of a testator may be resorted to in case of a latent ambiguity which arises by reason of two or more persons or things, each answering exactly to the person or thing described in the will. Griscom v. Evans, 40 N. J. Law 402. And in Van Nostrand v. Board of Reformed Church, 59 N. J. Eq. 19, where the legatee was inaccurately named, Vice-Chancellor Reed (at ¶. 21 of the reported case) went further, and said: “This evidence was competent, although there was no latent ambiguity, for, says Mr. Hawkins, fit is to be observed that evidence in the shape of sayings, &c., of the testator may be in certain cases adduced to show that he habitually used certain words, even where the description is not equivocal, provided the sense thus sought to be put into them does not contravene their ordinary and legitimate meaning, this being distinct from evidence adduced to show in -what sense he used the words on the particular occasion of writing the will.’ ” Hawk. Wills 10; Duke of Leeds v. Amherst, 9 Jur. 359; In re Feltham Trusts, 1 K. & J. 528. Nor should it be overlooked that, in view of the nature of the trust, the expression “my estate” must be given a highly technical meaning to overcome its appropriately popular meaning, and this in a will drawn by a testatrix who was untrained in the law. Indeed, it has been held that the word “estate” in a will is not to be understood as a word of art, but of interpretation, and its meaning may be affected by other clauses and disposition in the will. Zimmerman v. Anders, 6 Watts. & S. (Pa.) 218. This parol testimony touching testator’s statements is not to be considered as showing what testatrix meant to say, since it.must be assumed that she meant to say what she did say, but at most is to be considered simply to show what she meant by what she did say — that is, what the words used by her signified in her mind. German Pioneer Verein v. Meyer, 70 N. J. Eq. 192, 195. It cannot' be doubted that a bequest to John Jones can be sustained in favor of William Jones if it be adequately disclosed that testator has always known John as William, especially if John should be found to be the more natural object of testator’s bounty. This in no way conflicts with the general rule recognized in this state to the effect that a general bequest by the donee of a power.in which testator refers to the property bequeathed as his estate will be held not to be an exercise of the power (Farnum v. Pennsylvavnia Co., supra), if it be accepted as a fact that in the mind or understanding of testatrix the term “my estate” embraced the trust estate, and I am unable to escape the view that in the circumstances of this case the evidence to that effect should not be ignored.

A decree will be advised in accordance with these views.


text:
    Charles H. Summerill et al., complainants, v. John M. Summerill et al., defendants.
    [Submitted July 2d, 1926.
    Determined July 9th, 1926.]
    The bill seeks to recover from a testamentary trustee losses alleged to ‘have been sustained by the estate by reason of the trustee’s wrongful refusal to sell or lease real estate at an advantageous price, and also losses alleged to have been sustained by the estate by reason of the trustee’s wrongful release of certain contractual rights which he should have enforced. Held, that the relief here sought should be pursued in the orphans court.

      On bill to charge trustee for negligence. On hearing on motion to dismiss the bill.

      Mr. J. Forman Sinnickson, for the defendant John M. Summerill, with whom appeared Mr. Walter M. Bacon, for the motion.

      Mr. James M. Davis, for the complainants, opposed.
   Leaming, V. C.

Defendant John M. Summerill was a testamentary trustee of the estate of Garnet Summerill, deceased, under a will probated by Salem county orphans court, until January 24th, 1924, when he resigned, and complainant City National Bank of Salem was by that court appointed as his successor in office.

The bill alleges that during the period of defendant Summerill’s trusteeship losses were sustained to the estate by reason of his wrongful refusal to perform certain acts which the bill alleges it was his duty to perform as trustee. The losses are alleged to have arisen by reason of the trustee’s wrongful refusal to sell certain real estate at an advantageous price, and also by reason of the trustee wrongfully releasing certain contractual rights which otherwise would have enured to the benefit of the estate. Eeeovery in behalf of the estate is sought for the amount of these losses.

The bill does not disclose whether any settlement of the accounts of defendant-trustee has been had in the orphans court.

Defendants object to this bill being entertained by this court on the ground that it is the duty of the orphans court to ascertain and determine and adjust at a settlement of the accounts of the trustee any liability of the trustee for misconduct of the nature stated in the bill, and that no adequate reason is disclosed by the bill for removing such settlement to this court. Filley v. Van Dyke, 75 N. J. Eq. 571.

Complainants’ broad contention is that the orphans court is without jurisdiction in the settlements of accounts of a testamentary trustee to charge the trustee with losses arising from the trustee’s neglect of duty in the performance of his trust.

In Hill v. Hill, 79 N. J. Eq. 521 (at p. 539), Chancellor Pitney, sitting as ordinary, cites the several sections of our act conferring authority upon the orphans court in matters of accounts of testamentary trustees, and concludes that the orphans court is invested with full jurisdiction over the accounts of executors, administrators, guardians and trustees, with all incidental powers necessary to effectuate that jurisdiction; that such jurisdiction is a general jurisdiction, similar to that of the chancery and prerogative courts, and that its authority over the accounts of trustees under wills is as ample as that of the court of chancery, and that the accounts of a trustee under a will must be stated and settled in the orphans court on equitable principles, according to the truth and substance of the matter in controversy. In that case on an appeal from an accounting in the orphans court the learned ordinary affirmed the orphans court in imposing upon a trustee liability for misconduct, and in enforcing principles of equitable estoppel against beneficaries of the trust, and also imposed liability upon a co-trustee for misconduct of the other trustee. It was there urged that the orphans court could not charge a trustee upon the ground of negligence. That contention was specifically overruled.

Under authority of that case it may now be said that our statute has conferred upon the beneficiaries in this cause the right to require an accounting by defendant trustee in the orphans court, and the further right, through the medium of exceptions to the account, to impose upon the trustee an obligation to the estate for losses that may have ■occurred through negligence or other wrongful conduct of the trustee, and that in such circumstances the powers of the ■orphans court in determining the trustee’s liability and ■charging him with an amount found to be just are coextensive with the powers of this court.

In re Eckert, 93 N. J. Eq. 598, on appeal to the prerogative court, an executor is charged with losses sustained by the estate through shrinkage in value of securities, clue to unreasonable delay of the executor in making settlement, and in the same ease the executor is charged with losses of interest to the estate arising from the removal of deposits in a savings bank to another bank where a lesser rate was received.

In Wyckoff v. O’Neill, 71 N. J. Eq. 729, loss to the estate by the neglect of an executor to pay an inheritance tax is made a ground of liability of the executor in the settlement of his accounts.

In Dey v. Codman, 39 N. J. Eq. 258, exceptions to the accounts of executors were filed in the orphans court seeking to charge the executors with losses sustained by the estate by reason of the refusal of the executors to sell real estate at an advantageous price. In both the orphans court and prerogative court on appeal these exceptions were entertained, and in both courts the surcharge claimed was denied because it was ascertained by the evidence that the executors had acted in good faith in refusing to sell.

In re Slater’s Estate, 88 N. J. Eq. 296 (on appeal from orphans court — at p. 802), negligence of executor is treated as the basis of liability and (at p. 304) an executor is charged with loss sustained by the estate by reason of his failure to promptly pay an inheritance tax.

It is, of course, clear that this court has jurisdiction to entertain the present bill, but why should it do so in view of the circumstances that the legislature has created a special tribunal for awarding the same relief now sought in this court. Since the orphans court has jurisdiction in the settlement of the .trustee’s accounts to entertain and adjudicate every charge made by the bill and award on equitable principles precisely the same relief which is here sought, and enjoys all the facilities for that purpose which are afforded in this court, there appears to be no special reason which justifies this court in entertaining the present bill.

My conclusion is that the matters set forth in the bill should be or should have been adjudicated in the orphans court, and that no adequate reason is disclosed for elsewhere seeking an adjudication of the matters set forth in the bill.


text:
    Camden Safe Deposit and Trust Company, trustee, &c., complainant, v. Annie G. Fricke et al., defendants.
    [Submitted May 28th, 1926.
    Determined July 2d, 1926.]
    1. In a will directing active trustees to pay the income of a trust fund to specifically named children of testator during their lives, with the added provision: “The representatives of any of said children who may be deceased to have' the share of his or her parent,” the ■word “representatives” held to refer to the children of a deceased child of testator.
    2. The gift above quoted to the children of a deceased child of testator held to be — (1) A contingent substitutionary gift as distinguished from an original 'or substantive gift; (21) a gift to a class to be ascertained at the death of the parent; (3) a gift creative of a joint tenancy in the members of the class as to income from time to time accruing.
    On final hearing on bill for construction of will of Welling Schrack, and for instructions.
    The bill filed herein seeks the construction of the will of Welling Schrack, deceased, touching the payment of the income from time to time accruing from a certain trust fund created by testator’s will.
    The will directs the trustees
    “to pay the [net] income thereof from time to time as received unto my wife, Annie Schrack, during her life, to her sole and separate use and benefit, and after her death to pay said income in equal parts to each of our four children, Annie G. Fricke, wife of Harry Fricke; Bertha L. Schrack, Harry B. Schrack and Nellie M. Schrack, during the term of their natural lives, to their sole and separate use and benefit, the representatives of any of said children who may be deceased to have the share of his or her parent, and, after the death of said children, I devise and bequeath, all of my said estate so held in trust, unto the heirs of the said Annie G. Fricke, Bertha D. Sehraek, Harry B. Sehraek and Nellie M. Sehraek, their heirs and assigns forever, that is to say the heirs of each of said children are to take one share of said estate.”
    Testator died in 1891. His widow died in 1905. Nellie M. Moller, me Sehraek, one of the daughters of the testator, died in 1901, leaving three daughters. Since the death of Nellie S. Moller the share of the income which she would have been entitled to receive, if alive, has been regularly paid to her three daughters until the year 1925, when one of them, Annie Moller Gorham, died without having had a child, but leaving a will giving all her estate to her husband, Standish B. Gorham, who also is executor of her estate.
    The present inquiry is to determine whether Standish B. Gorham is entitled to receive from the trustees the share of the income accruing subsequent to his wife’s death which his wife would be entitled to receive, if alive — that is, the one-third part of the income which Nellie M. Moller, daughter of testator, would be entitled to receive from time to time as such income should accrue, if she were still alive.

      Mr. George Reynolds, for the complainant.

      Messrs. McCarter & English, for the defendant Gorham.

      Mr. Charles E. Hendrickson, for the defendant Wolfe and others.
   Leaming, V. C.

It will be observed that the present controversy in no 'way is concerned with the distribution of the corpus of the trust fund. The present inquiry is to determine to whom the income shall be paid which has accrued since the death of Annie Moller Gorham, and which will from time to time hereafter accrue. The direction of testator is that: “The representatives of any of said children [of testator] who may be deceased to have the share of his or her parent.” Obviously, the word “representatives,” as here used, refers to children of a deceased child of testator, since the words “his or her parent” cannot otherwise be given recognition. Thus understood, the direction of testator is that the income of the trust fund, as it from time to time accrues, is to be paid to the widow of testator during her life. At her death the income as it from time to time thereafter accrues is to be paid to testator’s specified children. At the death of either of testator’s said children the share of the accruing income which such child would have been entitled to receive, if alive, is to be paid to the children of such deceased child. The interests which vest under provisions of that nature are well defined in this state. At the death of testator an interest in the income which should accrue during the life of testator’s widow vested in her in right and in possession for the period of her life. At the death of testator an interest vested in right in the several children of testator, limited to. the period of their respective lives, to receive the income which should accrue after the decease of testator’s widow; such several interests became vested in possession upon the death of the widow. These gifts to the children of testator were to them in severaltjr, since the gifts were to the children of testator, nominatim; but the gifts only embraced the right to receive the proportionate share of the income during their respective lives after the death of the widow. At death their interest in the income terminated. In the event of the decease of any of these several children pending the income-paying trust, leaving children, the share of the income which the parent would have received, if alive, was to be paid to the children of such parent so long as the trust continued. This provision for the substitution of the children of a deceased child to receive the share of the income theretofore payable to their parent is a contingent substitutionary gift to a class, the members of which are to be determined at the death of the parent, as distinguished from an original or substantive gift. At the death of the parent a right to receive the share of the income which the parent would receive, if alive, vested in interest and in possession in the members of the class.

The determining factor in this ease arises from the circumstance that the substitutionary gift is to a class with no words of severance or other expression denoting an intent of severance. Gifts of that nature create, a joint teaney in the members of the class. At the death of Nellie M. Schrack, leaving three children, the income which would have been payable to her, but, for her death, became payable to her three children; upon the subsequent death of one of them (Annie Moller Gorman) the remaining two in right of survivorship became entitled to receive their mother’s share of the income.

The views herein stated will be found adequately supported in the following adjudications in this state: Crane v. Bolles, 49 N. J. Eq. 373 (at pp. 381 et seq.); Redmond v. Gummere, 94 N. J. Eq. 216 (at p. 219); Hutchinson v. Ex-ton, 53 N. J. Eq. (at p. 690).


author: Lewis, V. C.

text:
    Pierre Lorillard et al., executors, &c., complainants, v. William Kent et al., defendants.
    [Decided July 15th, 1926.]
    The gift of a legacy “at,” “when” or “after” a given event occurs, vests only upon the happening of the event.
    On bill, &c.

      Mr. William Brinlcerhojf, for the complainants.

      Mr. L. Edward Herrmann, for the defendant Pierre Lorillard.

      Mr. Frank W. Hastings, for the guardians, &c.

      Messrs. Griffin & Griffin, for the defendant Lorillard S. Taylor.

      Messrs. Stewart & Hartshorne, for the defendants Gaspard Earrer and Baring Brothers & Company.
   Lewis, V. C.

This is a suit brought by the executors of the late Peter Lorillard to determine who is entitled to the principal of a certain fund which was created in accordance with paragraph 11 of the testator’s will.- The proceeding was regularly brought before the court, and all parties who claim any interest in the fund are named as defendants. I need not recite at length the paragraph in question, as all the defendants are represented by solicitors, and, being thus familiar with it, have sent me their views regarding it. I am satisfied from an examination of the will, which was evidently carefully prepared by a skillful hand, that there can be no doubt as to the testator’s intention. The object of the testator in accumulating the income is easily gained from a reading of the paragraph. It was for the purpose of protecting payments to his wife and to his sister-in-law under the terms of the will. He established the fund as a sort of insurance against any deficiency. He set it apart during his wife’s life and then provided for its distribution, a distribution upon her death which accords with the intention of the testator readily ascertained from an examination of the entire will, applying the well-settled rules of construction to it. It was not given to anyone before the wife’s death. He has fixed a time when this process of accumulation should cease, and that was upon the death of his wife, when there should be a distribution among his children surviving his wife, or their issue, in equal shares. The time arrived for the payment of the retained income, i. e., the death of the widow of Peter Lorillard. It never came in the lifetime of Emily L. Kent and Maud L. Baring, but each left issue surviving at the death of the widow. It appears clear to me that there could be no vested right in them during the lifetime of the wife, but, even if vested, the shares of those not living at the period for distribution became divested and went to the issue, share and share alike. It is well established, for instance, by our decisions that a gift of a legacy “at” or “when” or “after” a given event occurs vests only upon the happening of the event.

It therefore appears now to be the duty of the executors to divide the reserve fund in the following manner: One-fourth to Pierre Lorillard, son of the testator; one-fourth to grandsons, Pierre Lorillard and Griswold'Lorillard, in equal parts; one-fourth to the issue of Emily L. Kent; one-fourth to the issue of Maud L. Baring.

Let an order be entered accordingly.


text:
    Harrington Company, a corporation, complainant, v. Adam Frank et al., defendants.
    [Decided September 16th, 1926.]
    1. A motion to open a final decree foreclosing tax sales certificates should be by petition for rehearing and order to show cause. Mitchell v. Mitchell, 96 N. J. Eg. 89.

    2. Where a defendant had ample opportunity to redeem his property from a tax sale, but does not do so, he does not present a very strong ease for opening a decree against him.
    On motion.

      Mr. Harry B. Broclchurst, for the complainant.

      Mr. Andrew B. Foulds, for the defendants.
   Lewis, V. C.

This matter comes before the court upon motion of Adam Prank, a member of the New York bar, and one of the defenclants in the action, to open a final decree foreclosing tax sales certificates. It is an appeal to the discretion of the conrt.

It appears from the moving papers that the procedure adopted by the defendant does not follow the practice now established. Our court of errors and appeals, in one of its latest deliverances, speaking through Mr. Justice Parker, and reviewing the case of Mitchell v. Mitchell, 96 N. J. Eq. 29, does not sanction the procedure followed by the defendant, but says that the proceeding should be by petition to the court for rehearing, on which an order to show cause would issue. In the instant case the defendants merely gave notice of a motion to open the decree and appended an affidavit. On this ground the application in its present form should be dismissed as not being properly before the court.

As a meritorious proposition, the defendant Frank’s appeal is not very strong. It appears that he had more than the usual time to make answer to the bill of complaint. This bill was filed on April 3d, 1924. It named as defendants, in addition to Frank, Louis M. Isaacs, Estelle I. Frank and the holding company. The defendant Frank and the defendant Isaacs were non-residents, and after the filing of the bill an order of publication was' taken, and Frank and Isaacs were requested to answer the bill on or before June 24th, 1924. It appears-by affidavit that Frank and Isaacs were served personally on April 30th, 1924, and on May 3d, 1924, Estelle Frank was personally served. On October 25th, 1924, a decree pro confesso was entered in the matter, and the master heard the allegations of the complainant on November 22d, 1924. His report was confirmed by an order of the conrt of November 24th, 1924. By his report it appears that none of the defendants had appeared before him and redeemed the said lands and premises. A final decree followed on August 7th, 1925. No answer or any other steps were taken by Adam Frank or either of the other defendants until November 18th, 1925, when Frank gave notice of an application for an order to vacate the final decree for the purpose of permitting the defendants to redeem the property. The record discloses that despite the fact that Erank had more than the usual time to make answer to the bill of complaint, being a non-resident, that on June 30th, 1934, before his time to answer had expired, he obtained a written stipulation from the solicitor of the complainant extending his time to October 34th, 1934, a further period of four months. After this time had expired and on October 30th, 1934, Erank wrote the solicitor of the complainant asking for a further extension of ninety days, which was refused on November 3d, 1934, but the solicitor of the complainant promised that under the order of reference then made he would not take complainant’s testimony until November 15th. The defendant did nothing in the way of redeeming the land and premises before the time set, but on December 19th again requested an extension of sixty or ninety days in which to pay off or annul the proceedings, to which the complainant’s solicitor replied on December 19th that the time had been fixed by an order of the court as December 33d, 1934, giving the hour and place for the redemption by the defendant.. These facts clearly show that the defendant had ample opportunity to redeem or present any defense he might have had and must have understood the situation, being familiar with legal matters. If the amounts alleged by the complainant were not the true amounts due, an answer could readily have been filed setting up these facts, but in his affidavit now before me Erank does not question the master’s findings, but says complainant’s claim is excessive. However, I shall deny the motion on the first ground suggested and consider further an application in the "matter when the proceedings taken are in accordance with our practice.


author: Backes, V. C.

text:
    Ubaldo Traverso, Paul McMillin Butterworth and Bankers Trust Company, trustees under the last will and testament of Emerson McMillin, complainants, v. Estelle McMillin Traverso et al., defendants.
    [Filed June 10th, 1926.]
    1. A legacy to a trustee is deemed in equity to vest in the cestui que trust.

    2. A legacy is deemed vested at the death of the testator though the right of possession be postponed to some future period.
    3. A legacy is deemed vested if the income is directed to be paid the donee until the payment of the principal at a future period.
    4. The proceeds of real estate sold by an executor under positive directions of the will are regarded as personal property for the purpose of distribution.
    5. A legacy of personal property to “heirs” — Held to mean “distributees” under the statute of distribution, and one to “devisees”— Held to mean legatees.
    6. A bequest of the residue in trust for the members of testator’s family, share and share alike, payable to them “if then living” at the period of distribution, and if deceased to their “heirs” or “devisees,” the contingency attaches to the payment, not to the gift, and confers a vested estate subject to being divested, and vested in the substituted donees upon the death of the primary legatees.
    7. The same words in different parts of a will, used to express a common purpose, are presumed to have been used in the same sense.
    8. A legacy by way of limitation over to the “devisees” of a primary legatee upon the latter’s death before distribution does not confer a power of appointment. The legacy does not rest on a delegated authority to select the substituted donee.
    9. A bequest to members of a family is not presumed to be to them as a class, so that the survivors take upon the death of a member before distribution, when the legatees are named and the legacy is to them, share and share alike.
    On bill for construction of will.

      Mr. John L. Griggs, for the complainants.

      Messrs. Lindabury, Depue & Faullcs (Mr. Stryker), Messrs. Pitney, Hardin & Skinner (Mr. Shelton Pitney and Mr. Mahlon Pitney) and Messrs. Wall, Haight, Carey & Hart-pence (Mr. Wall), for the defendants.
   Backes, V. C.

The first fifteen paragraphs of the last will and testament of Emerson McMillin, deceased, are devoted to pecuniary legacies to relatives. This litigation involves the true meaning of the following sections:

“Sixteenth. My direct 'heirs at law, members of my family, and residuary legatees of the Estate Trusteed in Section Seventeen, and all of whom are to be equal, in every respect, as to his or her interest in the Trusteed Estate, are: my wife, Isabel Morgan McMillin, now of Darlington, Mahway, New Jersey, my daughters, Mary MeMillin Norton, wife of Oliver D. Norton, now of Santa Barbara, California ; Estelle McMillin Traverso, wife of Tibaldo Traverso, now of Florence, Italy; Maude McMillin [unmarried] of Darlington, Mahway, New Jersey; my son, Marion McMillin, of Darlington, Mahway, New Jersey; and my granddaughter, Helen Isabel Mc-Millin [only child of my deceased son, Emerson McMillin, Jr.], now of Darlington, Mahway, New Jersey. For all the persons named, I have previously made ample provision for their own welfare as well as for the welfare of those depending upon them. My granddaughter, Helen Isabel, the only child of my deceased son, Emerson, inherited liberal sums from her father and from her mother. To the above named direct heirs, residuary legatees, and designated members of my family, I express my earnest desire that the Darlington Estate shall remain intact in the family, and I stipulate that this must be so during the life of my wife, Isabel Morgan McMillin.
“Seventeenth. I give devise and bequeath unto my Trustees to be hereinafter named, and their successors, in trust, however, for the persons named in Section Sixteen, all the residue of my Estate, including leases of my summer home at Beaver Island, Upper Dam, Oxford County, Maine; the eighty-six acre plot of land known as the Marion Cottage property of Mohegan Bake, West Chester County, New York; Apartment House at 320 West 86th Street, New York City, New York; and my Darlington Estate, Mahway, New Jersey; and all the farm equipments, produce, live stock and household furniture, paintings, tapestries, textile fabrics, porcelains, potteries, bronzes and art objects of every kind and character; and all the stocks, bonds, notes, cash, credits and assets of any kind and of which I may die possessed, and not herein before disposed of, but with the following conditions and stipulations: [a] The Beaver Island leases, the Marion Cottage property and the 'City Apartment House in New York, are all to be sold as soon as may be, and the proceeds to be invested as the Trustees shall deem to the best interests of the estate. [b] The household furniture, libraries and camp equipment at Beaver Island, including steam boat — to be disposed of — if convenient with the leases. The proceeds of all sales shall be invested by the Trustees for the Trust Estate. The Trustees shall permit the Darlington Estate with all its comprehends to be used free of all rent and with absolute control by the family, with power, through my son, Marion, or other chosen head of the family, to operate the Farm, to purchase machinery and supplies, to buy and sell farm products, including live stock of all kinds, but not to convey real estate, nor to sell any objects of art or household furniture except with the approval of the Trustees.
“Eighteenth. All income from rents, dividends on stocks, interest on bonds or other securities not herein otherwise disposed of, in fact, all income of every kind and character, except the income of the Darlington Estate during its retention by the family, shall be paid to and received by the Trustees for the benefit of the Trust Estate, and the Trustees are empowered to sell, dispose of, convey and give title to any kind of property, real or personal, at any and all times, when deemed advisable by them, except as to the disposition and sale of the Darlington Estate during the life of my wife.
“Nineteenth. From the income of the Trust Estate the Trustees shall [a] pay to my wife, Isabel Morgan 'McMEUin, and to my son, Marion McMillin, jointly, the sum of fifty thousand dollars per year, payable quarterly for the maintenance of the family at Darlington and the upkeep and improvement of the Darlington Estate. In the event that my wife shall predecease me, then the fifty thousand dollars shall be paid to my son alone, for the purpose above mentioned. If the family desire to retain Darlington after the decease of both my wife and my son, they shall designate a head of the family in a manner that shall be satisfactory to the Trustees, and the person so designated shall receive and disburse the Darlington Estate Annuity. Should any of the persons named as my direct heirs and members of my family prefer not to make their home at Darlington, then such person or persons shall each receive twenty-five hundred dollars per year, in quarterly payments, to be taken by the Trustees from the Darlington Estate fund of fifty thousand dollars per year herein above provided for.
“Twentieth. From the' income of the Trust Estate, after deducting the provisions of Section Nineteen, the Trustees shall pay to each of my direct heirs [and persons designated as member of the family and legatees of the Trust Estate], that is to say — pay to Isabel Morgan McMillin, my wife, to Mary McMillin Norton, to Estelle Mc-Millin Traverse, to Maud McMillin, to Marion McMillin and to Helen Isabel McMillin, or in the event of the decease of any of the above named members of the family, then to the heirs or to the devisee of such member, the aum of fifty thousand dollars per year, payable quarterly. In the event of the Trust Estate not producing in any year an income sufficient, together with any accumulated income from previous years — to pay fifty thousand dollars for the maintenance of the family and the upkeep of the Darlington Estate, and fifty thousand dollars to each -beneficiary named in this section, then the sum of annual payments to the Darlington fund and to each individual named shall be reduced pro rata. On the other hand, the Trustees may increase the several annual payments pro rata, whenever — in their judgment — the excess of annual income, or excess of accumulations shall warrant such increase. The matter of increase of payments to be wholly discretionary with the Trustees. It is not the intent of the testator that the Trustees shall strive to increase the total value of the Estate; but that they shall be liberal in their distribution. The Trustees may pay any part, or all of the annuities, in stocks, bonds or other securities instead of cash, if for any reason they, the Trustees, shall deem it advisable so to do.
“Tioenty-ftrst. Upon the decease of both my wife and my son, the Trust -shall, except as hereinafter provided, cease and determine, through the Trustees disposing by sale of all the undivisable property [excepting only my Mausoleum in Woodland Cemetery in the City of New York, which Mausoleum is to 'be and remain the property of my family, as designated in Section Sixteen of this instrument, and to their heirs, and to be used for the purpose for which it was constructed]-; and [after paying the cost of administration] by making an equal division of all the assets between the persons named [in Section Sixteen] as direct heirs and members of the family and who are named as residuary legatees, if then living, share and share alike, or to their heir or heirs or to the devisee of any deceased member or members. Provided, however, that -so long as a majority in number of the surviving members of the family [as named in Section Sixteen] so desire the Trust shall be continued.
“Twenty-second. After the decease of my wife and before the decease of my son, if such be the order of their decease, the Darlington home may be disposed of by sale, if two Trustees shall — for financial reasons — deem it advisable. Or if a majority of the remaining or surviving direct heirs and members of the family shall formally request the Trustees to dispose by sale of the said -Darlington Estate, it shall be disposed of accordingly, and the annual payment for its maintenance shall cease. Upon the sale and disposition of the Darlington Estate, from, or for, whatever reason, it shall be the duty of the Trustees to promptly divide up the divisable assets, sell the remainder and divide equally all the assets between the residuary legatees, share and share alike, or, if any be deceased, then to their heirs or devisees.”

The testator died May 31st, 1922. All the beneficiaries mentioned in' the sixteenth paragraph survived him. His widow died October 5th, 1922, testate, leaving the residue of “her estate to her two daughters, Estelle McMillin Traverso and Maude McMillin, and her son, Marion McMillin, each a fourth, and to trustees, for the use of two grandchildren and a step-grandchild, the remaining fourth. Her heirs-at-law were her two daughters, her son, and a granddaughter, Helen Isabel MeMillin, daughter of a deceased son, Emerson McMillin, Jr. Marion McMillin died January 5th, 1931, without issue and intestate, leaving a widow, Jane M. McMillin, his administratrix. The trust was terminated on the death of Marion. The real estate has been sold and the estate is ready for distribution. The trustees seeks the guidance of the court as to the disposition to be made of the shares given to the widow and Marion, and propound these questions: Was the gift to the widow vested absolutely and is it payable to her executors, or is it payable to her heirs-at-law or next of kin, or to the residuary legatees under her will? And as to the gift to the son, Marion, deceased, Was it vested absolutely and is it payable to his administratrix, or is it payable to his heirs-at-law or next of kin ? The further question is, Are the proceeds of the sales of lands to be treated as realty or personalty?

The testator evidently drew his own will, embodying a comprehensive and well-rounded scheme of testamentary disposition, and no doubt felt he had set down his wishes in such plain fashion that there could be no two notions as to its meanings. And were it not for the inept use of technical terms, of which, it seems, he had a conversational familiarity, much confusion would have been spared. The will is evidently the product of a straight-thinking mind of unequivocal purpose, and whatever may be the primary legal import of the variety of expressions used, the testator’s meaning is not obscure from the lay viewpoint, nor from the judicial standpoint, if we apply the rules of construction to the development of his intention rather than try to’Square the will with the rules. The cardinal rule is the real intention of the testator in whatever form it finds expression.

The testator died possessed of a large fortune and “Darlington,” his homestead of many hundred acres. His all-engrossing thought was to leave his estate (except pecuniary legacies to his relatives) to the six members of his family, in equal shares, and gave emphasis to this in the keynote section (sixteen), wherein he described them by name and as the “residuary legatee of the estate trusteed in section seventeen, and all of whom are to be equal, in every respect, as to his or her interest in the trusteed estate.” Each was to have a vested undivided sixth in his or her own right.

The estate was given, in language of express and immediate gift, to the trustees “for the persons named in section sixteen,” and in equity the gift is deemed to be to the cestui que trust as though it had been made directly to them. Neil-son v. Bishop, 45 N. J. Eq. 478; Miller v. Worrall, 59 N. J. Eq. 184- The postponement of the enjoyment of the corpus was not because of anything personal to the legatees. The intervention of the legal estate in the trustees was merely for the convenience of the estate, i. e., for more advantagously handling the interest pending the trust, and the legacies vested at the death of the testator. Post v. Herbert, 27 N. J. Eq. 540.. And upon the death of a legatee it vested in the substituted donee in his or her stead. Crane v. Bolle, 49 N. J. Eq. 373. The gift of the income in equal shares to the legatees until they should come into the principal in equal shares also marks the vesting of the estate. Dusenberry v. Johnson, 59 N. J. Eq. 336; Fidelity-Union Trust Co. v. Rowland, 99 N. J. Eq. 72. Another strong indication that the estate vested is the gift of an undivided sixth interest to the widow, though the testator knew she could not live to come into possession of the corpus. She would have been let in but for the trust for the maintenance of “Darlington,” or had the trust been destructible in her lifetime.

Having first secured his estate to the six members of his family the testator planned to continue the home, in all its splendor, for their use, at least, during his widow’s remaining years, and to provide for their maintenance in keeping with their ultimate inheritance. By the variable gifts for the upkeep of “Darlington” and to the members of his family during the period of the trust, he, in effect, appropriated the entire income to their use.

The testator’s idea was that the division of the corpus should be in liquid assets, and to that end directed that all his real estate be sold for the purpose of distribution, and under -well-recognized principles the proceeds are deemed to be personal property. Cook’s Executors v. Cook’s Administrators, 20 N. J. Eq. 375; Baldwin v. Taylor, 37 N. J. Eq. 78.

Upon the termination of the trust, after the death of the widow, the trustees were directed to pay over the residuary estate “by making an equal division of all the assets between the persons named [in section sixteen] as direct heirs and members of the family and who are named as residuary legatees, if then living, share and share alike, or to their heir or heirs, or to the devisees of any deceased member or members.” Here the testator dealt with the distribution of the corpus, not with the substance of the gift. The members of his family “if then living” (at the distribution) were to receive their shares, and deceased members’ shares were transmitted by way of substitution to their “heirs or devisees.” The payment to them and not the gift of the shares was upon condition that they survive the period of the trust. Security Trust Co. v. Lovett, 78 N. J. Eq. 445. The testator’s widow, obviously, could not, and his son, Marion, did not, live to come into the enjoyment of the corpus, and their shares, consequently, devolve upon those who would take as “devisees” under their last wills and testaments, or, in default of a will, to their “heirs” by operation of law, as though they had died possessed. The testator intended, and it is clear, that the-shares to the members of his family, who could not, or would not, come into possession, should pass to those who would inherit from them. He conceived that “devisees” supplanted “heirs,” and meant that the devisees should take to the exclusion of heirs, if there was a will, if not, the heirs were to take, not, as has been argued, that it was given without choice to either the one class or the other. This applies also to the income given to the heirs or devisees of a deceased legatee, consistent with the testator’s intention that the share of each member of his family in the residuary estate should be equal to the share of the others.

The subject-matter of the gift being personal property, the word “devisees” is referable to “legatees” and “heirs” to those who take under the statute of distribution. The word “heirs,” when applied to the disposition of personal property, has been uniformly held in this state to indicate distributees under the statute. In Leavitt v. Dunn, 56 N. J. Law 309, an insurance policy payable to the “heirs” of the insured was held by the court of errors and appeals to include the widow. In Meeker v. Forbes, 84 N. J. Eq. 271; affirmed, 86 N. J. Eq. 855, Yice-Chancellox Stevens held that a substitutionary gift of personal property to the “heirs-at-law” of a legatee who died before distribution without issue passed to his widow, and the ruling is dispositive of the claim of Marion’s widow.

The doctrine of these authorities is not criticised, but it is contended that the word “heirs” was used in the sense of issue. This is based on the testator’s supposed love of kin or “pride of blood,” and is said to be indicated in other parts of the will. The fact that he gave the share of his widow to her “devisees” without restriction as to kinship is a forceful denial. It is, however, pointed out that by the fourth section of the will a pecuniary legacy was given to the grandchildren of the testator’s sister Eliza J. Ewing, children of her son and daughter, and “in the event that any of the said grandchildren predecease me leaving issue, such issue shall be the beneficiaries;” and by sections 5 to 10 pecuniary legacies are given to the children (or their heirs), of his remaining brothers and sisters, and that by the eleventh section it is provided that “gifts to the children [or their heirs] means to the direct issue of my brothers’ or sisters’ children, and not to issue beyond the second generation, or to others who, by adoption or otherwise, might be heirs-at-law, except in the case of my sister Eliza, where it is her grandchildren and not her children who are made the beneficiaries. In that case her great-grandchildren who do no not predecease me shall be the beneficiaries,” and it is argued from this that the testator thereby indicated an intention that his estate should not go to strangers — to Marion’s widow, and to the step-grandchild under the will of the testator’s widow. It is, undoubtedly, the rule that the same words in different parts of a will, used to express a common purpose, are presumed to have been used in tbe same sense — 2 Jam. (5th ed.) 773 — but it is difficult to see how tbe application of tbe rule is helpful. By tbe eleventh section tbe testator simply meant to limit tbe representation, not to restrict tbe gift to bis kin. By “direct issue” be referred to immediate issue, to tbe children of tbe primary legatees — the second generation; and this he clarified by excepting tbe case of bis sister Eliza “where it is her .grandchildren and not her children who are made the beneficiaries.” Cases in this state, cited as bolding tbe word “heirs” to mean issue, will be found, upon examination, were decided upon peculiar circumstances calling for that meaning. Bruere v. Bruere, 35 N. J. Eq. 182; Baldwin v. Taylor, supra; Randolph v. Randolph, 40 N. J. Eq. 73; Dawson v. Schaefer, 52 N. J. Eq. 341; Dean v. Nutley, 70 N. J. Law 217; In re Smisson, 79 N. J. Eq. 233. Tbe claim of Jacob Schaab as an “heir” of bis widow’s personal estate was not considered, as it was not in tbe later case involving the same estate. Cranstoun v. Westendorf, 91 N. J. Eq. 34.

The insistence that the alternative gift to tbe “devisees” of a deceased member of testator’s family conferred ' only a power of appointment, and that tbe power was not exercised by tbe testator’s widow, is without merit. Farnum v. Pa. Co., 87 N. J. Eq. 108; affirmed, Ibid. 652, is cited. Tbe gift over does not rest on tbe exercise of a delegated authority to tbe widow to select tbe donees. Tbe widow bad the power to create, not to appoint tbe substitutes. Tbe executory bequest defines tbe donees who take by tbe limitation over as those who answer the description of “heirs” or “devisees” of a deceased legatee. Tbe bequests are self-executing to their devisees if there is a will, to their “heirs” if there is not. Tbe gifts to them are effected by tbe testator’s will, not by tbe legatee’s direction.

Tbe contention that tbe gift of tbe residue to tbe six members of the testator’s family was to them as a class, and that Marion’s share, be having died without issue, fell into tbe residue and is divisible among tbe survivors of tbe class, ignors the distinguishing features of tbe bequest, that it is to the legatees severally by name and the distribution of the undivided residue among them in equal shares. Dildine v. Dildine, 32 N. J. Eq. 78.

The contention that the vested estate of the widow was not divested by her death before the period of distribution, because the gift over is void for uncertainty in that it is given indefinitely to her heirs or devisees (11 B. C. L. 484; Dusenberry v. Johnson, supra), presents a purely academic question. The legatees under the widow’s will and the widow of Marion under the statute of distribution (Comp. Btat. p. 2629) take whether the limitation over be good or bad, and the executors are advised to pay the respective shares to them.


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    Frank Hand et al., trustees for creditors of the Parsons Manufacturing Company, complainants, v. Parsons Manufacturing Company et al., defendants.
    [Filed May 26th, 1926.]
    A trustee for creditors, under a trust agreement, cannot, in, the absence of an express contract, recover compensation out of the proceeds of sale of the mortgaged premises. He must look to the creditors.
    On motion for allowance.

      Mr. Sidney W. Eldridge, for the motion.
   Backes, V. C.

The Parsons Manufacturing Company executed a mortgage on its manufacturing plant to the complainants; .in trust, to secure the payment of all the debts of the company, in pursuance of a composition agreement approved by the bankruptcy court. The trustees went into possession of the mortgaged premises and operated the plant and paid the larger part of the debts out of the income and realized the balance out of the proceeds of the sale of the mortgaged premises under foreclosure of their .mortgage. There is a surplus of $7,500 which has been paid into court. This represents the equity of redemption and belongs to the company, and would, have been ordererd paid to it in the ordinary course, except for the claims made upon it by the trustees and their counsel for compensation for their services.

The trustees agreed to act for three years without charge, but they labored nearly six years and liquidated several hundred thousand dollars of debts during the overtime for which they ask remuneration. If they are entitled to be compensated it is difficult to see upon what theory the company or its funds can be held accountable. The trust was strictly inter-parties and contractual. The company pledged its property to its creditors to pay its debts, and instead of making the mortgage to each creditor individually, pro tanto, it was, for convenience, executed to trustees for them. The estate conveyed by the mortgage was limited to the sum total of the debts, and, by implication, the necessary expenses of realizing the debts, and, when these were satisfied, the trustees’ estate in the mortgaged premises terminated. In discharging the duties imposed upon them by the mortgage the trustees represented the creditors, not the company. The company did not obligate itself to pay them, and no duty rests upon it to do so. The trust is not within the judicial administration of this court. The fund is accidentally in its hand in the foreclosure suit, and, as the trustees have.no claim upon it, it will be paid to the company, less the following administration expenses,

The trustees were put to an expense of $865 for which they have not been reimbursed. There is no objection to payment.

The trustees employed counsel-, as they had the right to do, who advised them over a long period of years, and appeared for them in some litigation, fox which he is entitled to compensation. That was a proper administration expense. He will be allowed $1,000.


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    Anna Hercey, complainant, v. Board of Chosen Freeholders, Liberty Trust Company and Louisa Powell, defendants.
    [Decided July 2d, 1926.]
    The measure of damages in condemnation proceedings, to a lessee foor the taking of his unexpired term and an option for a renewal term, is the value of his lease for the unexpired term, plus the sum that the value of the option adds to the value of the lease for the unexpired term. In a practical sense the value of the unexpired term, plus the value of the option term, as though it were a part of the leased term.
    On bill, &e.

      Messrs. Pomerehne, Laible & KauU, for the complainant.

      Mr. William P. Hurley, for the defendants.
   Backes, V. C.

The board of chosen freeholders of Essex county condemned the complainant’s property for public use and paid the award into court. Instead of filing a petition in the original cause, as is the usual and correct practice, the complainant filed this bill to obtain the money and have determined how much should be allowed Louisa Powell, lessee of the premises under a three-year lease expiring July 1st, 1926, with an option for an additional two years, which option was to be deemed exercised if the tenant remained in possession after July 1st, 1926, and it was stipulated “in such event this memorandum shall be deemed to be a lease.” The lessee occupied the building as a boarding-house and vacated the premises June 15th, 1925, after the award was made, but before it was paid into court, on July 14th, 1925.

It is conceded in complainant’s brief that the value of the lease for the unexpired term, from July 1st, 1925, to July 1st, 1926, is $25 a month, and that the lessee is entitled to $300 damages. The question is what amount, if any, is she entitled to for the two years’ option. The complainant contends that she is not entitled to any because she abandoned the premises before the county paid the award and took possession. The fact is that she vacated under pressure of the condemnation proceedings and the threatened destruction of the building, which followed shortly after she moved. She lost none of her legal rights nor was she relieved of her legal obligation under her lease by doing in advance what eventually she would have been compelled to do. She continued liable for the rent until the constructive eviction by the payment of the award into court. The lessee is entitled to compensation for the value of her lease for the unexpired term, plus the sum that the value of the option adds to the value of the lease for the unexpired term. In a practical sense the value of the unexpired term, plus the value of the option term, as though it were part of the leased term. The courts have adopted both the technical and the simple measure. In re William & Anthony Sts. (New York), 19 Wend, 678; Niederstein v. Cusick, 110 N. 7. Supp. 287; affirmed, 195 N. Y. 594; North Pennsylvania Railroad Co. v. Davis& Leed, 26 Pa. St. 288. Under the proofs and admissions the added value of the option term is $300 per year. The allowance will be for the unexpired term from the time of the fictional eviction, July 14th, 1925, $287.50, and the value of the option term, $600. The present value of the total at six per cent, will be calculated according to the rule laid down in Holcombe v. Trenton White City Co., 80 N. J. Eq. 122, and paid to the lessee. The unpaid rent from June 1st to the eviction will be deducted.