text:
    Smith Costill v. Annie E. Hill.
    Where a man and woman constantly live together, ostensibly as man and wife, claiming to be such, and so demeaning themselves towards each other, and are received into society, and are treated by their friends and relations as having and being entitled to-that. status, the law, in favor of morality and decency, will presume that they have been legally married. Such cohabitation and repute are said to be matrimonial in distinction from that occasional, hidden and limited cohabitation which marks the meretricious relation. It is always a question whether the cohabitation proved is of the character which will raise the presumption and make prima facie proof of marriage. At best, it can do no more, for the presumption may be rebutted.

      On appeal from a decree which distributes the estate of Capitol S. Hill, made by the Camden county orphans court.

      Mr. Jonathan W. Acton and Mr. Samuel E. Perry, for the appellant.

      Mr. John W. Wescott, for the respondent.
   The Ordinary.

Capitol S. Hill died intestate on the 27th of May, 1894, leaving him surviving, as his next of kin, three brothers, Smith Costil!, of Camden, who is the appellant, and John and Caleb Costill, of Salem county. His father’s name was Costill, and the name he took from his parents was Hill Costil!. From time to time he assumed different names. For several years immediately preceding his death he was known as Capitol S. Hill. He was drowned by falling from a boat which he owned, and on which he lived with the respondent.

The decree appealed from recognizes the respondent as the widow of Hill, and after reciting that the costs of the litigation in the orphans court concerning the distribution of his estate, which were taxed at about $733, had been paid pursuant to the order and direction of that court, and that the remaining estate was less than $2,000, proceeded to distribute it, one-half to the respondent and one-sixth to each of the decedent’s brothers.

The petition of appeal asserts that the decree allows a counsel fee of $300 to the respondent’s counsel. I presume that fee was allowed by some previous order of the orphans court and was directed to be taxed with the costs in the case. The decree appealed from recites merely the fact that payment of the costs has been made, but does not itself order the payment of any counsel fees or costs.

The main contention in the case, and the only question to be now decided, is as to the status of the respondent as the widow of Capitol S. Hill.

The appellant claims, first, that the respondent was never married to Hill, and second, that if married, the marriage was a nullity because at the time of it the respondent was the lawful wife of another man.

In her effort to prove her status as the widow of the decedent, the respondent was herself sworn as a witness, and testified that on the night of the 8th of August, 1889, while she lived in the house of the decedent at 711 Mount "Vernon street, in Camden, in the capacity of his housekeeper, the decedent brought to the house a man whom he said was a Methodist minister, who, without witnesses, married them; also, that this man gave them a marriage certificate, which they framed and kept hanging upon the wall in their several places of abode until Hill’s death. She does not know what has now become of that certificate, except that it disappeared from the boat where she and the decedent had lived, after his death, and while she was incarcerated in prison upon some authority and for some reason which she professes to be and to have been unable to comprehend, and which has not been explained in the case. The respondent is uncertain and vague in her attempts to describe the minister, and although she had the marriage certificate for about six years, fails to remember his name. She has never seen him since the marriage.

Coupled with this testimony is proof which shows that about the date of the alleged marriage and thereafter, the decedent declared the respondent to be his wife and introduced her as such ; that in September, 1892, as his wife, she joined him in the conveyance of their residence at 711 Mount Vernon street, to one Joseph Loeb, executing and acknowledging the deed in the capacity of wife; that in 1892 she and Hill moved to a house on Mechanic street, in Camden, and there resided for two years, where they were known and recognized by the neighbors as husband and wife; that while at that place Hill repeatedly introduced her and talked about her to the neighbors, as his wife; that a witness saw a marriage certificate hanging upon the wall in the Mechanic street house, and heard Hill refer to it as the respondent’s; that as man and wife they, in their house at Mechanic street, entertained their neighbors socially; that upon one occasion, in a police court, the decedent complained of children annoying the respondent, styling her his wife; that in October, 1893, another sale of real estate was made to a man named Jung, to whom, in 1891, Hill had introduced the respondent as his wife, and that Jung’s lawyer was instructed by Hill to prepare the deed making the respondent a party as his wife. The lawyer testifies when the time came to execute the deed, the respondent refused to sign it unless she should personally receive $50 out of the $1,700 purchase-money that was to be paid, and that Hill demurred to giving her that sum, and in her absence tried to persuade the lawyer to strike her name out as a party to the deed, alleging that she was not his wife, but that ultimately peace was restored and she joined in the execution of the document. It is shown, also, that shortly after the sale last mentioned, Hill determined to build a boat upon which he and the respondent could live, and for that purpose employed a boat builder, who called at his house to confer about the plans and contract for the vessel, where he was introduced by Hill to the respondent as Hill’s wife, and where subsequently he visited several times and found her, on every occasion, to be recognized by Hill as holding the relation of wife to him; that in the spring of 1894, the respondent and Hill moved on the boat before the builder had finished his work, and Hill then expressed to the builder his gratification at finding his marriage certificate, which had been lost; that subsequently Hill pointed out to another witness the certificate hanging in the boat, and the witness looked at it and saw the names of Hill and the respondent in it.

On the other side, the appellant and his brother John testified that Hill told them that he was not married, and a young man who works for the appellant testified to the same effect. The appellant’s wife, being called to speak of an occurrence in the year 1892 or 1893, said, first, that the respondent was then in the habit of calling at the appellant’s house, sometimes with and sometimes without Hill, and was known as Hill’s wife, but afterwards, in the same examination, contradicting her former assertion, persisted in the position that the respondent was not Hill’s wife, but his housekeeper. The wife of one of the brothers, living in Salem county, testified that she called at Hill’s house, on Mount Vernon street, immediately after the respondent came there, and that Hill then said to her that the respondent was his housekeeper. Such a statement would not be inconsistent with the respondent’s testimony, for it is remembered that the respondent does not claim to have married Hill until after she had been his housekeeper nearly a year.

It is noticed that all this contradictory testimony comes from parties in interest in this controversy and their dependents, and that it is subject to the criticism which is properly accorded to interested testimony.

With few exceptions, the witnesses appear to belong to a low and ignorant class of people, and I have doubt in several instances as to the credit to which they may be entitled. I believe that the judges who heard them testify and noted their intelligence and bearing upon the witness-stand are much better able to pass upon their credibility than I am. My inclination is to doubt the story of the respondent because it is meagre and vague in details, verging in some respects upon that which appears to be improbable, but at the same time I feel that those conditions may be attributable to the stupidity or ignorance of the witness, for when her testimony is regarded in the light of the subsequent acknowledgments and recognitions of a marital relation between her and Hill by both Hill and herself, which cannot be doubted, I conclude that when it is taken with such subsequent conduct, there is sufficient in the case to raise the presumption that she and Hill were man and wife, a presumption that has not been rebutted by the testimony which conflicts with it. As has been intimated, the last-mentioned testimony comes almost entirely from interested sources and relates only to declarations by Hill which are very limited in number and may have been made to answer some ulterior purpose, such as was obviously the case in his denial of marriage at the time of making the deed to Jung, where, if his insistence had been acquiesced in by Jung’s lawyer, it might have served to save him a few dollars.

It is plain that the cohabitation shown was with matrimonial habit and repute, constant and free from clandestinity, known, as the proofs indicate, to the relatives of both parties. It is true the wife of the appellant, after first testifying that the respondent was recognized in the brother’s family as Hill’s wife, insisted that the relation was not wife but housekeeper, yet she said enough in her testimony to satisfy me that social relations were sustained between the two families which could hardly have existed if a meretricious relation had been all the while known to exist.

The general rule, under proofs of the kind considered, is that where a man and woman constantly live together, ostensibly as man and wife, claiming to be such, and so demeaning themselves towards each other, and are received into society and are treated by their friends and relations as having and being entitled to that status, the law, in favor of morality and decency, will presume that they have been legally married. Such cohabitation and repute are said to be matrimonial, in distinction from that occasional, hidden and limited cohabitation which marks the meretricious relation. It is always a question whether the cohabitation proved is of the character which will raise the presumption and make prima facie proof of marriage. At best it can do no more, for the presumption may be rebutted. Wallace’s Case, 4 Dick. Ch. Rep. 530, 534.

The second ground of attack upon the decree is that if the proofs offered by the respondent shall be held to be sufficient to establish, by presumption or otherwise, the existence of the marriage relation, their effect is nullified by proof that during all her cohabitation with Hill, the respondent had another husband alive.

If the proofs sustain this proposition, it is undoubtedly sound, but I think it is clear that they do not sustain it. Upon this point it is established that the respondent had a child by a man supposed to be a Mexican, called French, who was a cook in one of the Camden hotels, in the year 1887, and that she lived with him, in the house of her father and mother, for a year or more, during which time, for the sake of maintaining the semblance of respectability, she and her family and French gave it out that they were married. After, a year they, separated, and since then have not been together. She has retained the child, and at times, when its paternity has been questioned, has pretended that she was married to its father. There is no proof of the marriage with French, except in the declarations alluded to and the limited repute consequent upon them. On the other hand, the testimony of the respondent and two of her brothers, corroborated by the complete termination of all relations with French, show that the previous relation was purely meretricious. The respondent’s parents are dead.

I have not failed to consider the influence which the cohabitation with French should have upon the proof of marriage with Hill. It exhibits not only a case of moral depravity, but also an ability in the respondent to create deceptive appearances to, cover shame, and suggests the question whether the life with Hill may not have been similar to the life with French. That, question may justly arouse strong suspicion, but, in face of the policy of the law, which favors morality and decency, and charitably contemplates the possibility of a seduced woman after-wards leading a better life, the suspicion fails to rise to the dignity of the proof which is necessary to rebut the law’s presumption.

I will affirm the decree of the orphans court, with costs. Ho counsel fees will be allowed.


source: Caselaw Access Project

author: The Ordinary.

license: Public Domain

text:
    Laura N. Ford et al. v. Daniel D. Westervelt et al.
    Personal property is liable, in the hands of executors, for the payment of debts before the satisfaction of any description of legacy. Specific legacies must yield to this payment. Lands will not be ordered to be sold to pay debts, when it appears that sufficient personalty came to the hands of the executors to enable them to make such payment.

      On appeal from a decree of the orphans court of Middlesex, county, which directs the sale of lands for the payment of debts.
    Mary-Ford Westervelt, by her will, devised a house and lot in the city of New York, then directed that the residue of her property, real and personal, should be divided between three nieces, whom she named, then made specific bequests of jewelry, furniture &c., and then, after indicating how and where she should be buried, appointed three executors, one of whom was Daniel D. Westervelt, her husband.
    By a codicil to the will the devisee of the New York property was charged with the payment of $1,500 to each of the three nieces, and two savings bank deposits in New York city, one for $1,200, in the Dry Docks Savings Bank, and one for $226.30, in the Bowery Savings Bank, were bequeathed to the husband of the testatrix, aud some real estate in Monmouth county, New Jersey, was devised to him. The codicil then gave the residue of the property of the testatrix, declared by it to be real estate, to her three nieces.
    The will and codicil were proved before the surrogate of Middlesex county and admitted to probate, and letters testamentary were issued to two of the executors named, one of whom was Daniel D. Westervelt. The executors who took letters then inventoried the personal estate, including and enumerating therein all the specific bequests, which constituted the whole personalty except property worth something less than $10.
    Later they reported to the orphans court that the two savings bank accounts in New York, which had been inventoried by them, had not come to their hands, but had been administered in New York under an ancillary administration, and had been there paid to the legatee of them, Daniel D. Westervelt, and that, in obedience to the direction of the will, that the other specific legacies should be paid at once or soon, they had delivered them, valued at $679, to the legatees to whom they were respectively to go. Also that they had paid debts enumerated, for which they should be reimbursed by sale of real estate. The court adjusted the balance due them for the debts paid and other charges, after making allowances and disallowances, at $530.61, and ordered the sale of the lands of the residuary legatees to pay that sum. Daniel D. Westervelt admits that he has taken possession of the property in Monmouth county which was devised to him, and also that he became the ancillary administrator in New York, and collected the savings bank accounts there and paid. them to himself as legatee under the will; also that he individually has paid all the debts for which the sale of lands has been ordered. None of the debts are on specialty. They are all simple contract debts.

      Mr. Alan H. Strong, for the appellant.

      Mr. William II. Barricklo, for the respondents.
   The Ordinary.

The debts of the testatrix are not referred to in her will, nor are they charged upon her lands by the will or codicil. The legacies are-all specific, and are not charged upon the land. It was suggested at the argument that the effect of the gift of the residue of the estate by the will in a blended mass of realty and personalty, was to charge the debts and legacies upon the realty as well as upon the personalty. I do not understand this to be the effect of the gift, for the will does not contain provision for the payment of debts; but, without deciding that question, I think that the codicil revokes the will’s gift of the residue in a blended mass. It manifests an intention to dispose of the entire residue by bequeathing all the personalty and giving realty only, as residuary estate. So far as the payment of debts was concerned, she was intestate.

Personal estate is liable in the hands of the executors for the payment of debts, and the executors are required to discharge the debts thereout before they satisfy any description of legacy. There is no distinction in this respect in favor of specific legacies. 2 Wms. Ex. (R. & T. ed.) 653; Crosw. Ex. § 478 ; Schoul. Ex. & Adm. § 476; Shreve v. Shreve, 2 Stock. 391; S. C. on appeal, 2 C. E. Gr. 487; Coddington v. Bispham, 9 Stew. Eq. 224; S. C. on appeal, 9 Stew. Eq. 576. If a debt be of a character to give the specific legatee who satisfies it or contributes to its payment an equity against the real estate, that is a matter to' be affirmatively urged by the legatee in the proper tribunal.

The case considered is decided at this point, for chattels given as specific legacies of the value of $679, or of value more than enough to fully pay the debts, came to the executors’ hands. There was no deficiency of personal assets.

The decree appealed from will be reversed.


author: Magie, C. J.

text:
    Enoch B. Scull et al., appellants, v. J. Percy Brinton, respondent.
    1. Proof that an owner óf lands employed agents to sell the lands aá mere real estate brokers will not he sufficient to establish authority in such agents to bind their principal by a written contract of sale.
    2. The doctrine announced in Lindley v. Keim, 9 Dick. Ch. Rep. 418, reaffirmed.
    On appeal from a decree ádvised by Vice-Chancellor Grey, whose opinion is reported in Brinton v. Scull, 35 Atl. Rep. 843.

      Mr. August Stephany and Mr. Clarence L. Cole, for the. appellants.

      Mr. Lindley M. Garrison, for the respondent.
   The opinion of the court was delivered by

Magie, C. J.

The decree appealed from required the specific performance of an agreement in writing for the sale of lands belonging at its date to Enoch B. Scull, one of the appellants, to J. Percy Brinton, the respondent, which agreement was signed, not by Scull, but by Porter & Crowley as agents for him. The decree further required E. Bartine Johnson, the other appellant, who had taken a conveyance of the lands from Scull, after notice of the Porter & Crowley agreement, to convey the same to Brinton.

To justify such a decree, proof that Porter & Crowley had authority to bind Scull by such an agreement was essential. The case shows that they had no written authority from Scull. The contention was that such authority had been conferred by parol.

This court has lately had under consideration contracts for the sale of lands executed by an' agent whose sole authority to thus bind his principal, the owner, was claimed to have been conferred by parol. Mindful of the easy opportunity for evading the provisions of the statute of frauds in respect to contracts for the sale of lands afforded by the settled doctrine that an owner who cannot make a valid contract for such sale except by writing, yet may confer authority by parol to make a contract in writing which will bind him, it was determined, without dissent, that proof of the conferring of such authority by parol must be clear and decisive; that the employment by an owner of a real estate agent or broker to sell lands, i. e., to procure a purchaser for them, will not confer authority to bind the owner to sell by a contract in writing, and that proof of circumstances merely justifying the inference of employment as real estate broker will not justify an inference of a grant of power to execute a written contract of sale. Lindley v. Keim, 9 Dick. Ch. Rep. 418.

We have no desire to reverse or modify in any respect the adjudication in Lindley v. Keim.

An examination of the evidence in the case before us is convincing that-, tested by the views then expressed, there is no sufficient proof that authority to bind Scull by the written contract in question had been conferred upon Porter & Crowley. They were evidently employed as mere real estate brokers and no greater authority is shown.

For this reason the decree appealed from must be wholly reversed and set aside, with costs.

For reversal — The Chiee-Justice, Collins, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Yan Syckel, Bogert, Dayton, Hendrickson, Nixon — 13.

For affirmance — None.


author: Magie, J.

text:
    William T. Taylor and Harry C. Taylor, appellants, v. Frederick J. Wands, respondent.
    1. ' A married woman may embark her own money and capital in any separate business or trade, may employ agents to carry on such business or trade and may avail herself of their skill and ability to make it successful.
    2. When a married woman employs her insolvent husband as such an agent, the transaction will be carefully scrutinized, but if there is evidence that the business was established by her with her own money and no evidence that money or capital of the husband was embarked therein, or that his employment was a device to shield from his creditors property or money which ought to be devoted to the payment of his debts, then the profits and earnings of the business will belong to the married woman, though partly due to the business-ability, experience and energy of her husband.
    3. A married woman united with her two sons and her insolvent husband in the formation of a trading corporation and she and her sons took all the stock issued except one share, which was allotted to the husband without payment. The money paid in by her on her shares was her own. The husband was employed as president and manager of the corporation upon a salary not shown to be unreasonable. There was no sufficient proof that the arrangement was devised to cover from his creditors any property of his —Held, that the undivided earnings of the corporation, represented by her shares of stock, belong to her, though due in part to the skillful management of the business of the corporation by her husband.

      On appeal from a decree advised by Vice-Chancellor Bird, whose opinion is reported in Wands v. Taylor, 34 Atl. Rep. 142.

      Mr. Garret D. W. Vroom and Mr. Chaunay H. Beasley, for the appellants.

      Mr. Peter Backes, for the respondent.
   The opinion of the court was delivered by

Magie, J.

The decree appealed from was made upon a bill filed by Frederick J. Wands, assignee, the respondent, against John Taylor, Harry C. Taylor, William T. Taylor, the Taylor Provision Company and others, the general purpose of which was to subject certain real and personal property, charged to be property of John Taylor, to a judgment entered by confession in the supreme court on April 7th, 1893, in favor of respondent and against John Taylor .md. William C. Brandt.

The decree gave the relief prayed for by respondent in various particulars. Harry C. and William T. Taylor have appealed from the whole of the decree, but since they are only affected by it in two particulars, our attention may be confined to them. It adjudged that the surplus (by which was evidently meant the undivided earnings) of the Taylor Provision Company, so far as such' surplus represented forty-eight shares of its capital stock standing in the name.of appellants, was subject to the lien of respondent’s judgment, and directed a reference to ascertain what surplus the company has. It further adjudged that the lands described in the bill, which formerly belonged to John Taylor, were also subject to respondent’s judgment, and decreed that conveyances thereof made by John Taylor, under which, by divers mesne conveyances, the title to one of the tracts had come to Harry C. Taylor and the title to the remaining tracts had come to the Taylor Provision Company, should be annulled and set aside.

With respect to the part of the decree which dealt with the undivided earnings of the Taylor Provision Company, the issue made by the pleadings, briefly stated, was this: The bill charged that John Taylor, Catharine M., his wife, and Harry C. and William T. Taylor, who are sons of John and Catharine M. Taylor, organized that company, but that all the stock was the property of John Taylor, and the shares held by Harry C. and William T. Taylor were held for John Taylor and to protect them from respondent’s judgment. The prayer was that appellants should be decreed to transfer all their stock in said company to a receiver to be appointed in the cause. Each appellant answered and denied the charge of the bill in this respect.

With respect to the part of the decree which dealt with the lands, the bill charged that John Taylor, with intent to defraud respondent and to protect said lands from respondent’s judgment, had conveyed them to Edward H. Murphy, who after-wards conveyed them to the Mechanics’ National Bank of Trenton, which afterwards conveyed them to Benjamin Van Cleve, who conveyed one tract to Harry C. Taylor and the remaining tracts to the Taylor Provision Company. The prayer on this subject was that the deeds should be set aside. Appellants’ answers contained a specific denial of this charge.

The Taylor Provision Company did not at first file an answer, and a decree pro confesso was entered against it. But that decree has since been opened and an answer has been filed by the company, containing like specific denials.

It is scarcely necessary to observe that respondent’s decree, upon these issues, can only be supported by sufficient evidence of the fraudulent character of the impeached transactions. Evidence which merely excites suspicion that fraud may have existed will not be sufficient. It must reasonably justify an inference of the actual existence of fraud.

As to the organization and stock of the Taylor Provision Company, the only witnesses called by respondent were John Taylor and the.appellants. Upon their evidence the following facts were established:

In 1860, upon the marriage of John Taylor with Catharine M. Taylor, a policy of insurance upon his life for $5,000 was, in some mode not- disclosed by the evidence, made payable to her. It does not appear who kept the policy alive by the payment of the premiums. It does not appear that John Taylor-paid any premium upon that policy after incurring the debt whereon respondent’s judgment was founded. In August, 1888, the firm of John Taylor & Company, composed of John Taylor and William C. Brandt, failed for a large amount. At that time Mrs. Taylor had held the policy of insurance in question for twenty-eight years, and there is nothing in the case to justify a doubt as to her absolute right to it, free from any claim by John Taylor’s creditors. About the 1st of September, 1889, she surrendered the policy to the company which had issued it in consideration of a present payment to her of $2,400. On the 4th of September, 1889, the Taylor Provision Company became incorporated by the filing of a proper certificate declaring that its capital stock was to be $250,000, divided into two hundred and fifty shares of $100 each, but that the company would commence business upon payment of $5,000. It also appears that fifty shares of the capital stock were subscribed, of which Mrs. Taylor took forty-seven shares, each of the appellants took one share and John Taylor took one share.

About the same time appellants obtained some money by the surrender of a policy of life insurance upon the life of their father, payable to them. There is no evidence that the money thus acquired was not their own, free from any claim of their father’s creditors. If the fact were otherwise, it has not been made to appear.

All the money procured by the surrender of the life insurance policies was paid into the newly-formed eompany. Mrs. Taylor paid in $2,400 and gave her due-bill to the company for the difference between that sum and the par value of her forty-seven shares. John Taylor paid nothing for his share.

It is unnecessary to discuss whether this transaction was conducted in accord with the provisions of the Corporation acts, for it could only be questioned in that respect by other stockholders or by creditors of the company.

Shortly after the formation of the company Mrs. Taylor became sick and continued so until her death, in April, 1890. On January 31st, 1890, when her death was expected by herself and her family, she transferred twenty-three of her shares of its stock to one of the appellants and twenty-three more to the other appellant, retaining one share in her own name. Her certificate was surrendered and new certificates issued to appellants. Ho consideration was paid for the stock; the transaction was a gift from the mother to her sons.

The vice-chancellor criticised this transaction as having been suggested by John Taylor. I am unable to perceive the justice of such criticism. John Taylor was hopelessly bankrupt. If his wife owned these shares of stock, or an interest in them, and died intestate, his creditors could require them to be applied to the satisfaction of their debts. But his duty to his creditors did not extend beyond such property as he had acquired. It did not require him to refrain from advising her as to the disposition of her property. There was, therefore, no legal or moral wrong in suggesting to her, or even entreating her, to bestow her property upon their sons, either by will or by gift inter vivos. Such a disposition by gift was made, and, in my judgment, appellants thereby acquired all the rights of their mother.

Prom this resumé of the evidence it is obvious that the decree prayed for, viz., the transfer of appellants’ stock to a receiver for payment of respondent’s judgment, was properly denied. There was no evidence to rebut the presumption that the $2,400 acquired by her by the surrender of the policy of life insurance, was her own money. It follows that the shares of stock in the Taylor Provision Company or such interest therein as she acquired with that money became hers, and that she transferred her interest therein by the gift to appellants. The right of appellants to the shares originally taken and paid for by them is in no wise challenged.

The decree, however, subjects to respondent’s judgment the accumulated earnings of the company which, upon division, would pertain to appellants’ shares. In other words, it recognized the bona jides of the transaction by which such shares were acquired, but decrees that the earnings upon the shares belong not to appellants but to John Taylor and are subject to his debts.

The evidence upon which the decree in this respect seems to have been made may be thus stated: The Taylor Provision Company engaged in the same business as that which the firm of John Taylor & Company had previously carried on. John Taylor became the president and manager of the corporation. It does not clearly appear but it may be inferred that the corporation owed its success to his business ability and exertions. It appears, at least, that while he was, as the vice-chancellor finds, the controlling spirit of the company, it established a good business and has accumulated earnings of about $30,000.

From the opinion below, it seems that the conclusion respecting these earnings was based upon the lack of evidence to show any agreement between the company and John Taylor as to accountings, or compensation or profits. But this put upon the defendants below a burden which ought not to have been imposed on them. It was for respondent to establish fraud in the transaction. As to accountings, it should be presumed, in the absence of proof to the contrary, that such accountings as shareholders may require from officers of corporations were provided for. The mere fact of large undivided accumulations of earnings justifies no inference of fraud, because the shareholders had a right to leave their earnings undivided, and it may be inferred that there was a necessity for more working capital than that supplied by the original subscriptions. In respect to compensation of the president and manager, there is obvious error, for the evidence shows that John Taylor is and has been receiving a salary of $3,000 a year as an officer of the company, for his services.

The decree, in so far as it subjects the accumulated earnings of the Taylor Provision Company which represent appellants’ forty-eight shares of stock, to respondent’s'judgment, upon this evidence, is plainly erroneous.

In respect to such of the earnings as represent the two shares originally subscribed and paid for by appellants, the decree has no foundation to rest upon. In respect to so much of the earnings as represent the forty-six shares subscribed for by the deceased Catharine M. Taylor, or such interest as she acquired therein by the money she actually paid thereon, it is also without support.

Under our Married Woman’s act and the deliverances of our courts on the subject it is thoroughly settled that a married woman may embark her own money and capital in any separate business or trade; may make valid contracts respecting the same ; may employ agents in carrying on such business or trade, and may avail herself of their skill and ability to make it successful. She may employ her husband as such an agent, and make use of his business ability, experience and energy to the same purpose. Earnings upon or increase of her capital in such business or trade, though due in part to the services rendered by her husband, will still belong to her and will not be liable to be seized by the husband’s creditors as his property. This was the doctrine declared in the court of chancery by Vice-Chancellor Van Fleet and approved by this court in Tresch v. Wirtz, 7 Stew. Eq. 124; S. C., 9 Stew. Eq. 356. It was applied in the court of chancery in Kutcher v. Williams, 13 Stew. Eq. 436, and more recently in this court in Coyne v. Sayre, 9 Dick. Ch. Rep. 702.

Had Mrs. Taylor established a business such as was carried on by the Taylor Provision Company and invested in it the money acquired by her upon the surrender of the life insurance policy and employed her husband to carry on that business in the same manner as he carried on the company’s business, this doctrine would have been plainly applicable. For, while a court of equity will carefully scrutinize the employment of an insolvent husband by a wife in such a case, it could find nothing in the facts to indicate that the husband acquired any interest in the profits or earnings of the business. Had the husband’s services been rendered to her gratuitously, such would probably be the conclusion, for the debtor is not obliged to work for the benefit of his creditor, but when, as in this ease, the services were rendered upon compensation, not shown to be unusual compensation for such services, it is beyond doubt that the profits and earnings of the business belonged to the wife, notwithstanding they were in part due to the husband’s skillful services, precisely as they would do had she employed a stranger of like ability to carry on the business.

I am unable to distinguish between the case supposed and which the vice-chancellor concedes would require a different conclusion than that he reached, and the case actually presented by the evidence. Mrs. Taylor, instead of embarking her capital alone or in partnership with her sons in the business, organized a corporation to establish the business, and she and her sons took all the stock issued except one share and paid in all the working capital. Instead of employing her husband as her own agent or the agent of a firm composed of herself and her sons, the corporation, which they practically controlled, employed him as president and manager. The cases are identical and the profits and earnings represented by her stock were her own property and not liable to respondent’s judgment.

There is nothing in the évidence to indicate it, but it may reasonably be inferred that a large part of the undivided earnings of the company were made after the stock of Mrs. Taylor had been transferred to appellants. With respect to the earnings after the transfer, the evidence is equally insufficient to justify the conclusion that they became the property of John Taylor.

For these reasons the decree in the respect under consideration was erroneous.

It remains to consider that part of the decree appealed from which set aside certain conveyances and subjected the lands thereby conveyed to the Taylor Provision Company and to Harry C. Taylor to respondent’s judgment.

To support the judgment in this respect respondent’s evidence must show that John Taylor was the owner of said lands or of some interest in them liable to be taken in satisfaction of respondent’s judgment.

The only witnesses called upon this subject were John Taylor and Benjamin Van Cleve. Neither Edward H. Murphy nor any officer of the Mechanics’ National Bank of Trenton was examined as a witness.

From the evidence of John Taylor the following facts appear: All the lands in question belonged to him at the time of the failure of the firm of John Taylor & Company, and the title was in him. The Mechanics’ National Bank of Trenton was a large creditor of the insolvent firm. John Taylor conveyed the lands to Edward H. Murphy without any consideration, but with the intent that Murphy should convey them to said bank, which he afterwards did. There was no agreement or understanding with the bank, except that it was to credit upon the debt of the firm whatever moneys it should obtain by a sale of said lands.

If the evidence of John Taylor is believed — and he is the only witness called respecting the transfer of his title to the bank — it is plain that his conveyances were absolute, and conveyed all his right, reserving no right of redemption. If the peculiar manner in which the title was conveyed to the bank is adapted to excite suspicion of the bona fides of the transaction, such suspicion is not sufficient to justify the rejection of the sworn statements of respondent’s witness, to the effect that the design was to prefer the bank to the other creditors of John Taylor. Such a preference is not forbidden by law. ■

Since it thus appears that John Taylor parted with all his interest in the lands upon the transfer to the bank, it is obvious that the decree can only be supported by evidence establishing the fact that he subsequently acquired the title to said lands or some interest therein.

The bank conveyed the lands to Van Cleve, who paid for them partly in cash and partly by a note, which he afterwards paid. Both Van Cleve and Taylor testify that after Taylor had heard that Van Cleve had agreed to buy the lands from the bank, he expressed a desire to redeem the property at some future time, but both deny, in the most positive terms, that there was any agreement or understanding by which Van Cleve was bound to permit such redemption.

If this evidence is credited, it is plain that John Taylor acquired no interest in said lands from Van Cleve. But it is argued in behalf of respondent that facts admitted by these witnesses are at variance with their evidence, and justify a refusal to credit their denial that Van Cleve’s purchase of the lands from the bank was for the benefit of John Taylor. The facts relied on are these : Van Cleve and John Taylor were old and intimate friends. The sales of the greater and more valuable parts of the lands made by Van Cleve to the Taylor Provision Company were made for prices which reimbursed him for his outlay in the purchase from the bank. The conveyance by Van Cleve of one tract to Harry C. Taylor was without consideration.

A theory deduced from such admitted facts will not justify discrediting the sworn evidence of unimpeached witnesses in respect to the intent and purpose of the respective conveyances, unless it is absolutely inconsistent therewith. I do not think such inconsistency appears.

With respect to the lands conveyed to the Taylor Provision Company, there is no sufficient evidence to show that the prices paid were below the lair market value at the time of the respective conveyances. The lands were conveyed to the company in which John Taylor had but a nominal interest as holder of one share of its stock.

With respect to the tract conveyed to Harry C. Taylor without consideration, it appears that it was heavily mortgaged. There is no sufficient evidence of the market value of the equity of redemption at the time the conveyance was made, but the fair inference is that it was very small. If John Taylor’s friend, being protected from any loss upon his purchase from the bank, chose to convey to his friend’s son this equity of redemption of trifling value, the inference that it was a gift is at least as reasonable as the inference sought to be deduced that the transfer was for the benefit of John Taylor. There is no evidence whatever that Harry C. Taylor accepted the conveyance with any agreement or understanding that he was to hold the tract for the benefit of his father.

Whatever suspicion the-evidence on this subject may'excite, it falls short, in my judgment, of establishing the claim of respondent. The decree, in the respect lastly considered, is therefore also erroneous.

The result is that the decree appealed from, in the two respects which have been - considered, and which are all in which appellants have an .interest, must be reversed.

For reversal — The Chief-Justice, Depue, Garrison, Gummere, Lippincott, Ludlow, Van S yokel, Bark alow, Bogert, Dayton, Hendrickson, Nixon — 12.

For affirmance — Hone.


author: Depue, J. Dixon, J.

text:
    George R. Gray, receiver of the United States Credit System Company, appellant, v. L. M. Reynolds, trading under the firm name of L. M. Reynolds & Company, respondent.
    1. A policyholder in a company insuring traders against losses occurring through the insolvency of their customers cannot recover for losses sustained after the company’s insolvency, whether on sales made by him before or after the date, but is only entitled to a return of the unearned premium, there being no reserved value to the policy, nor any method of reinsuring.
    2. Dixon, J., dissents as to sales made before the company’s insolvency.
    On appeal from an order of the court of chancery.

      Mr. Howard W. Hayes, for the 'appellant.

      Mr. Edward A. Day, for the respondent.
   The opinion of the court was delivered by

Depue, J.

The respondents are merchants carrying on business in Virginia. The United States Credit System Company is a corporation of this state, incorporated in 1888. The business for which this corporation was created was the issuing of certificates of guarantee, which may be called contracts of insurance, or indemnity to traders for losses incurred by the failure of their customers who are debtors to the traders and become insolvent. A policy issued by this company runs for one year and covers losses on goods sold during that year by the insolvency of their customers during that year; in other words, the goods must be sold and the insolvency of the customer must also occur during the period of time covered by the policy. Losses incurred after the certificate expires, on sales made during its term, are provided for by other parts of the contract not material to this case. The vice-chancellor very properly describes the kind of insurance undertaken by this company as sui generis. Indeed, so peculiar is the system of insurance engaged in by this company that its contracts of insurance appear to be protected as its exclusive property by a copyright. In this adventure there is no reserve fund to meet the obligations it incurs, no surrender value and no opportunity for reinsurance in other companies.

The complainants took out a policy, No. L 169, dated and issued May 24th, 1894. This policy covered the period from June 1st, 1894, to May 31st, 1895. The company became insolvent August 23d, 1894. The order appointing a receiver adjudges that upon that day the company was insolvent. The day on which insolvency occurred, as adjudged by the order appointing a receiver, fixes the time to which the several claims of creditors must be referred for adjustment. Mayer v. Attorney-General, 5 Stew. Eq. 815. The complainants presented to the receiver a claim of $517.60, which was the amount of loss actually suffered on goods sold during the continuance of ths policy up to the date of insolvency, which was allowed. They also presented claims for losses on goods sold after the policj was issued, where the losses were incurred after the insolvency of the company, to the amount of over $2,000. The latter the receiver disallowed.

On appeal to the court of chancery the vice-chancellor set aside the adjudication of the receiver in the latter respect. The vice-chancellor very properly held that under the scheme of insurance there was no reserve value to the policies and that it did not appear that it was possible to reinsure in any solvent company so as to put the insured on the same footing he occupied at the time of the insolvency of the company.

The vice-chancellor also held that where no provable loss had occurred either at the time of the insolvency or at the time of exhibiting final proof of loss, the only method of fixing the loss occasioned by the breach of the contract was to assume that the premium paid was a fair price for the risk, and the risk was equally distributed throughout the period covered by the certificate, and that a rebate of that portion of the premium which represented the unexpired term of the policy would be a practical method of determining the amount of damage to the insured.

But the vice-chancellor also held that where the loss has actually occurred after the date of the insolvency, but before the exhibition of the final proof of loss, the occurrence of such an event was competent evidence in respect to the value of the policy at the date of the insolvency, and that the method of ascertaining such value was the amount of such losses, with a rebate of interest from the time they were payable, back to the date of the insolvency; and that as to the losses that happened between the time the claim was presented to the receiver and the expiration of the policy, the insured should have a right to prove them on the hearing of his appeal, as showing the amount of 1ns loss, and that there was no distinction between losses happening on merchandise shipped after the insolvency of the company and on that shipped before.

These conclusions of the vice-chancellor, if sustained, must rest upon the assumption that the policyholders were entitled to treat the insurance company as a going concern until all its policies expired. In this'view, with respect to companies of this character, we cannot concur.

The order in the insolvency proceedings put an end to the business of the company and terminated its contracts, leaving the holders of policies to be indemnified as indemnity might be awarded. Any other view would compel the creditors of the company to continue the insurance business with the property and funds of the company, which the. insolveney proceedings contemplate shall be divided among the creditors as of the time when the insolvency occurred; and there being no reserve value to the policies and no method of obtaining reinsurance, the only practical mode of determining the compensation to be made to the insured, where no provable loss had occurred at the time of the insolvency, would be by a rebate of that portion of the premium which represented the unexpired term of the policy.

This view of the nature and effect of policies where the insolvency of the company had occurred, was adopted by the supreme court of Minnesota in the case of Smith, Insurance Commissioner, v. National Credit Insurance Co. (April Term, 1896).

The order appealed from should be reversed and an order entered in conformity .with these views.

Dixon, J.

(dissenting).

I vote to reverse this decree only so far as it allows losses resulting from sales which were made after the insolvency of the insurance company. Against such losses the insured should have guarded himself by reinsuring, for the cost of which a return of the proportionate part of the premium will be compensation.

But for losses resulting from sales made before insolvency, I find no way to indemnify the insured, except by permitting such losses to be proved, according to the terms of the policy, against the assets held by the receiver. His right to such indemnity seems indisputable, and no inequity can be done to other creditors by postponing (if necessary) the distribution of the fund, until the amount of those losses can be ascertained.

For reversal — Depue, Dixon, Garrison, Gummere, Lippincott, Magie, Van Syokel, Bark alow, Bogert, Dayton, Hendrickson, Nixon — 12.

For affirmance — None.


author: Van Syckel, J.

text:
    The Inhabitants of the Township of Bloomfield, in the County of Essex, appellant, v. The Mayor and Council of the Borough of Glen Ridge et al., respondents.
    1. When a municipal corporation is divided, the old corporation retains title to all its property, unless provision is made to the contrary by the act authorizing the division.
    2. Where the new corporation attempts to interfere by ordinance with such property, the appropriate remedy is by certiorari to set aside the ordinance.
    3. Trespasses of an ordinary character-, upon public works, are to be redressed by an action at law in the usual manner.
    On appeal from a decree advised by 'Vice-Chancellor Reed, whose opinion is reported in Bloomfield v. Glen Ridge, 9 Dick. Ch. Rep. S876.

      Messrs. Colie & Swcvyze, for the appellant.

      Messrs. Coult & Howell, for the respondents.
   The opinion of the court was delivered by

Van Syckel, J.

The township of Bloomfield, in connection with the city of Orange, constructed a system of sewers by which the territory of Bloomfield was sewered. Afterwards, on the 12th of February, 1895, the borough of Glen Ridge was formed out of part of the township of Bloomfield. Prior to that date Bloomfield had constructed lateral sewers in what is now the territory of Glen Ridge, at an expense of over $30,000.

On the 20th of May, 1895, the common council of said borough of Glen Ridge passed an ordinance entitled “An ordinance to establish rules and regulations for the management and use of the public sewers, drains and appurtenances and connections therewith,” by which it is ordained that the sewer committee of the said council shall have charge of all public sewers and drains within said borough, and that all connections therewith shall be made under the supervision of said committee, and that no connection shall be made without a permit from said committee ; and that any person who shall make connection with such sewers contrary to the provisions of said ordinance, shall forfeit $25 for each offence.

The inhabitants of Bloomfield filed their bill, setting up these facts, and alleging that the borough of Glen Ridge had, by virtue of the aforesaid ordinance, asserted its ownership of so much of said sewer system as lies within the limits of said borough, and threatened to take absolute control and management thereof. The prayer is for an injunction restraining the borough from interfering with the complainant’s sewers within the limits of the borough, and from exercising any authority over them.

The question which the complainant submits for decision is whether the title to, and the right to control, the sewers lying within Glen Ridge resides in the township of Bloomfield or has passed to the borough government.

There is no legislation providing for a division of property between the two local governments.

The Borough act of 1878 gives no power over sewers.

The first act relating to sewers in boroughs is that of March 23d, 1892 (P. L. of 1892 p. 196), which gives power to purchase sewers from private individuals or corporations owning them.

The act of April 7th, 1892, applies only to boroughs having authority by their charters to adopt a general plan of sewerage, and does not apply to Glen Ridge.

The act of March 14th, 1893 (P. L. of 1898 p. 271), does not apply to existing sewers, but simply provides for the construction of sewers.

The act of March 27th, 1893 (P. L. of 1898 p. 460), is of like purport.

There is no other pertinent legislation in this respect. The acts of 1895 and 1896 do not divest the title of the old corporation or transfer the title to its property to the detached territory. They provide a way in which property may be divided between certain local governments, but so far as appears no action has been taken in this case under these laws, and it is questionable whether they apply to Glen Ridge.

The township of Bloomfield constructed the sewers and issued bonds to an amount exceeding $55,000 for the money expended upon them. Those bonds are still outstanding, and the township as now existing is alone responsible for them. Dill. Mun. Corp. § 128. That the sewers thereby became the property of the township will not be denied.

Do they continue to belong to Bloomfield or have they passed to that part of the territory severed from it and now forming part of Glen Ridge?

The cases relied upon to support the title of Glen Ridge are the following: Bridge Company v. East Hartford, 16 Conn. 171; School District v. Tapley, 1 Allen 49 ; Laramie County v. Albany, 92 U. S. 315; Mount Pleasant v. Beckwith, 100 U. S. 525; North Hempstead v. Hempstead, 2 Wend. 109.

'The case in 16 Conn, does not hold that the title to lands and buildings will pass to the territory in which they lie; the court said that when territory of a municipal corporation is divided, and a new one erected, the old corporation retains all the property, rights and privileges formerly belonging to it, at least so far as regards property which has no fixed location.

The case in 1 Allen p9 presents this situation: A town formed new school districts within its own territory by abolishing the old ones, and it was held that the legal title to the existing school-houses vested in the new districts within whose territory they were. The town had power to change the districts at will. All the districts being within its own limits, it was a matter of internal concern only, and did not affect another municipality. Judge Hoar based his opinion upon the fact that the old districts were wiped out, and said it was unnecessary to determine what the rule would be where there was only an alteration of the limits of the old district.

Laramie County v. Albany, supra, involved only the question of the liability of the old corporation for all its debts con-, tracted prior to the severance.

Mount Pleasant v. Beckwith, supra, is a case where the old corporation was legislated out of existence, and all its territory annexed to other corporations. The property of the extinct corporation, as well as the liability for its debts, passed to the corporation which had absorbed it. There was no other place in which the title could reside.

The case in 2 Wend. 109 was where a town had been divided into two distinct and separate municipalities, and the old corporation no longer existed. ;

It must have been the legislative intent that each division should succeed to the title, to the property within it. •,

In my judgment, the weight of authority is decidedly on the side of the township of Bloomfield.

In Windham v. Portland, 4 Mass. 384, in discussing this, question, Chief-Justice Parsons said: “ If a part of the territory and inhabitants of a public corporation are separated from it by the erection of a new corporation, the former corporation still retains all its property, powers, rights and privileges, and remains subject to all its obligations and duties, unless some new provision be made by the act authorizing the separation.”

Windham v. Portland was approved in Hampshire v. Franklin, 16 Mass. 76, where Chief-Justice Parker declared that the rule as stated in the former case was correct, unless some express provision to the contrary be made by the act authorizing separation. It was not suggested in these cases that it would make any difference in the rule where the property was situated in the detached territory.

In Society v. Candia, 2 N. H. 20, it appeared that Caudia was formed from Chester, and that the land in question was' in Candia, yet it was held that the title to it remained in Chester.

South Hampton v. Fowler, 52 N. H. 225; Board v. City of East Saginaw, 45 Mich. 257, and Winona v. School District, 10 Minn. 13, support the proposition that the old municipality retains title to all its property, including, that which, upon the change of boundaries, happens to fall within the limits of the other corporation.

The cases in Wisconsin are to the same effect. Town of Milwaukee v. City of Milwaukee, 12 Wis. 93; Town of De Pere v. Town of Bellevue, 31 Wis. 120.

These cases rest upon sound principle, as it is difficult to perceive how the title to property passes from the old to the new corporation by the mere fact that it falls within the limits of the latter. Glen Ridge acquired by its incorporation mere municipal control over the territory within it. The legislation under which it acquired such municipal control contains no provision bestowing upon it title to lands or property of any kind; it has" simply a capacity to acquire property for its public purposes.

• The argument advanced that the new corporation will take the property within it because the old corporation cannot use the property outside its limits for the purposes for which it was designed, will not apply to this case. This sewer system is an entirety, and cannot be advantageously controlled and devoted to its intended uses unless it is under one management.

If a new municipality should be carved out of part of the territory of the city of Newark, the right of such new municipality to exercise an independent control over such sewers and water-mains as were within .its limits could not be recognized without impairing the safety of the entire system. Public policy is manifestly against the admission of such dual control.

The difficulty of suggesting a way in which a public corporation could be divested of its title, except by making a grant or by legislative enactment, presented itself to our supreme court in Dummer v. Jersey City, Spenc. 86.

We therefore conclude, both upon reason and authority, that the title to these sewers remained unchanged by the creation of the borough, and that the right to control and. regulate and maintain them is vested exclusively in the township of Bloomfield.

The right of the residents of Glen Ridge to use the sewers under reasonable regulations to be established by the township of Bloomfield and without unjust discrimination against them is a question not involved in this controversy, nor is it intended to deny the right of Glen Ridge to control and regulate the highways within its territorial limits, within which these sewers are laid.

We deem it to be the duty of this court to express its view of this question, as the facts are undisputed, and as it is of the utmost importance to both parties to the controversy that the title to this property, held for public purposes, shall be no longer in doubt, although the question as to the right to maintain this bill in equity must be decided upon another ground, which does not involve the question of title.

The foundation upon which the complainant’s right to relief rests is that the borough of Glen Ridge has by an ordinance asserted its right to control and regulate the sewers lying within its own territorial limits, and granted some permits to make connections with them.

The principle is well settled that where the rights of individuals or public corporations are invaded by the acts of persons exercising municipal powers in an illegal manner, the parties aggrieved must seek redress by certiorari. Tucker v. Freeholders of Burlington, Sax. 283 ; City of Camden v. Mulford, 2 Dutch. 49; State, Gregory v. Jersey City, 5 Vr. 390; State v. Washington, 15 Vr. 605; South Orange v. Whettingham, 29 Vr. 657; Hunt v. Lambertville, 17 Vr. 59.

That the legality of these ordinances can be reviewed and the proceedings under them arrested by certiorari cannot be successfully controverted.

The existence of an adequate remedy at law excludes the right to invoke the aid of a court of equity.

Certiorari is the appropriate proceeding to test the validity of municipal ordinances, and, so far as appears, it will be an adequate remedy in this case. It is not to be presumed that the public officers to whom such writ is addressed will attempt to take any action in virtue of such ordinances pending the litigation.

It is not intended to deny that an appeal to the injunction power of equity may be appropriate, where the illegal interference with a sewer system is persistent and continued, and of such a character as to preveut its beneficial use by the corporation entitled to control in. In a matter vitally concerning the public health and safety, such an injury would be considered irreparable. Trespasses of an ordinary kind upon public works can be redressed by an action at law as readily as trespasses upon private property.

It is suggested that the equity jurisdiction should be retained, even though the appropriate remedy would have been by suit at law, because the facts are undisputed and the rights of the parties could now be determined and finally adjudged without requiring the complainant to resort to further litigation. There is a discretionary power to retain the suit and finally adjudicate upon the rights of the parties, but it has been exercised in rare cases and under peculiar circumstances. Palys v. Jewett, 6 Stew. Eq. 302, and Higgins v. Flemington Water Co., 9 Stew. Eq. 538, are instances.

The case now considered is before us on demurrer to the complainant’s bill, and has no feature which distinguishes it from any other case in which the party defendant challenges the jurisdiction of the court of equity.

Eor the reason that there is an appropriate and adequate remedy at law, the decree below, dismissing the complainant’s bill, should be affirmed.

For affirmance — Depue, Dixon, Garrison, Gummere, Lippincott, Magie, Van Syckel, Barcalow, Bogert, Dayton, Hendrickson, Krueger, Nixon — 13.

For reversal — None.


author: Dixon, J.

text:
    Mary Dunham et al., appellants, v. Cornelius Doremus et al., respondents.
    1. It is an established rule of equity practice that estates limited over to persons not in esse are represented by the living owner of the first estate of inheritance.

      2. A foreclosure bill need not define the nature of the interests which the defendants have in the mortgaged estate, when the peculiar nature of those interests is unimportant to the relief sought by the complainant.
    On appeal from a decree in Doremus v. Dunham advised by Vice-Chancellor Pitney. (No opinion filed.)
    Mr. John W. Harding, for the appellants.

      Mr. George S. Hilton, for the respondents.
   The opinion of the court was delivered by

Dixon, J.

The bill in this case was filed for the purpose of quieting the title to a parcel of land in Paterson, and the only question now raised is whether the children of Mary Magee, who appeal, have any interest in the premises.

It appears that the property formerly belonged to John Magee, who died seized in 1851, leaving a widow and one child, Mary, then about six years old. By his will he gave the property to his daughter, adding,

“in case Mary should die without having any children then I wish her mother to have and possess the property; should Mary have -children I wish them to possess the property share and share alike at her death.”

Mary’s children claim that under this clause the fee was limited over to them by way of executory devise or contingent remainder, and is now vested in them.

Conceding this interpretation of the words quoted, it nevertheless is true that until the birth of Mary’s children, the fee either was devised to Mary by the other clauses of the will or passed to Mary as her father’s heir.

This being the state of the title, the widow of John Magee, soon after his death, purchased a bond secured by a mortgage on the property which John Magee had given in 1846 to the Society for Establishing Useful Manufactures, and in 1857 she filed a bill to foreclose this mortgage, making her daughter Mary, then twelve years old, a defendant, as her father’s heir and the owner of the fee. On this bill the property was duly sold under decree of the court of chancery, and the title thus conveyed is now vested in the complainants.

We are of opinion that by this sale the estate limited over to the unborn children of Mary Magee was cut off. The established rule of equity practice is that estates'limited over to persons not in esse are represented by the living owner of the first estate of inheritance. Reynoldson v. Perkins, Amb. 564; Giffard v. Hort, 1 Sch. & L. 386, 407; Lloyd v. Johnes, 9 Ves. 37; Mead v. Mitchell, 17 N. Y. 210; Calv. Part. 48 et seq.; Mitf. & T. Pl. & Pr. 24; 1 Pan. Ch. Pr. 262. When, therefore, Mary Magee was brought into court to answer the complainant’s charge that the mortgage created a lien upon the absolute fee-simple, and the complainant’s prayer that the fee-simple should be sold to pay the mortgage debt, the decree that such sale should be made bound not only the estate of Mary Magee but also all estates which might thereafter have arisen.

It is further argued that in order to bar the estate of the appellants it was necessary that the foreclosure bill should set forth their estate definitely, and since it does not do so, their estate remains.

The bill charges that John Magee, owning the fee-simple, had made the mortgage and had died seized, leaving a will of which profert was made, and leaving Mary as his only child. This was sufficient. It clearly indicated the extent of the lien claimed and called attention to the means by which the mortgaged estate-had been transmitted, and brought into court all the persons by whom that estate could or ought to be defended. Hothingfurther can be required of a complainant. Lloyd v. Johnes, 9 Ves. 37, 64. It would be unjust to cast upon a complainant the-burden of correctly describing the rights of the various defendants, at the risk of defeating his own claims in case of error,, when the nature of those rights is of no importance to the relief which he seeks.

The further claim of the appellants, that the widow of John Magee bought the bond and mortgage with moneys belonging to John Magee’s estate, is not supported by the proofs, and if it were it could not now avail the appellants. In the foreclosure bill she asserted that the bond and mortgage were her own and constituted an outstanding lien upon the estate of John Magee, and the decree in her favor conclusively establishes that as the truth against all the parties in or represented in that suit. Nor were the persons who purchased under that decree bound to inquire whether it was one proper to be made, provided it was within the issues presented by the bill, and of that there can be no question.

In our judgment, the title of the complainants is not open to dispute, and the decree below should be affirmed.

For affirmance — Depue, Dixon, Garrison, Gummere, Lippincott, Magie, Van S yokel, Bark alow, Bogert, Dayton, Hendrickson, Krueger, Nixon — 13.

For reversal — None.


author: Dixon, J. Per Curiam.

text:
    Julian G. Buckley and Mary K. Slack, appellants. v. Lewis Perrine and Addie S. Perrine, respondents.
    1. When an infant has been brought before a vice-chancellor on habeas corpus, and the petitioner for the writ and the person in possession of the infant make counter-claims to the permanent custody of the infant, they may, by entitling their pleadings in the court of chancery and filing them with the clerk of that court, presenting therein an issue which only that court is competent to try, indicate their purpose to transfer the controversy into that court, and so give that court complete jurisdiction of their cause.
    2. The circumstances of this case show that the litigants over the right to the permanent custody of two young children, had in the manner above, stated transferred the cause into the court of chancery, had consented that it should be heard before the vice-chancellor who had allowed the writ of habeas corpus, and had agreed upon a day set for final hearing. Held, that the respondents, who did not appear on that day, could not successfully assail the decree then made, upon the ground that the court had no jurisdiction, or that the order of reference to the vice-chancellor was made ex parte, or that they had not received regular notice of final hearing.
    On appeal from an order of the chancellor, whose opinion is reported in Buckley v. Perrine, 9 Dick. Ch. Rep. 285.

      Mr. Garret D. W. Vroom, Mr. Edwin Robert Walker and Mr. Oortlandt Parker, for the appellants.

      Mr. Chauncy H. Beasley and Mr. Richard V. Lindabury, for the respondents.
   The opinion of the court was delivered by

Dixon, J.

The pertinent facts in this case are stated in the preface to the chancellor’s opinion, and need not be here repeated. From them the learned chancellor concluded that his decree of November 26th, 1895, awarding to Mary Kemble Slack the care, custody and control of her daughters, aged eight and ten years, during their minority, had been made in a proceeding which was not pending in the court of chancery, and consequently was void. Thereupon he ordered that the decree should be vacated so far as it purported to be a decree in the court of chancery, and from such order the present appeal is taken.

The order is now defended upon three grounds — -first, that on which it was rested by the chancellor; second, because the decree vacated was not within the issue presented by the pleadings, and third, because the respondents had not due notice of the hearing on which the decree was made.

As to the first ground, it may be assumed that the authority conferred by the statute (Gen. Stat. p. 1631 § 59) upon vice-chancellors, to grant writs of habeas corpus and to hear and •determine the same, as the chancellor may do, is only the authority which law judges also possess, to free persons from illegal restraint, and not “that beneficent prerogative which exists in the court of chancery, to see to the protection and provide for the proper care” and permanent custody of infants. It nevertheless is true that when an infant has been brought before any officer by the statutory writ of habeas corpus, the parties who then confront each other with counter-claims for its permanent custody, may, by consent, take into the court of chancery their contest for such custody, and thus give to that court complete jurisdiction over their cause. That such jurisdiction may be so acquired is clearly indicated by the decisions of this court in Baird v. Baird, 4 C. E. Gr. 481; English v. English, 5 Stew. Eq. 738, and Richards v. Collins, 18 Stew. Eq. 283.

The proceedings in the present case show that the parties did thus transfer their cause into the court of chancery.

The consent of the petitioners to such transfer appears from these circumstances: Their petition for the writ, their replies to the respondents’ answers, and all the orders made on their motion, were entitled in the court of chancery and filed in the office of the clerk of that court; in their order of October 15th, 1895, they recited that the children had been produced in open court, and that the issue to be tried in the cause related to the permanent custody of the children, an issue which only the court of chancery had authority to try; in their order of October 22d, 1895, are similar recitals as to the production of the children and the issue involved; and on November 25th, 1895, they obtained a formal order, signed by the chancellor, referring the-cause to Vice-Chancellor Bird, an order which presupposes that the cause was pending in the court of chancery.

The consent of the respondents to the transfer appears from these circumstances: They expressly consented to the orders of October 15th and 22d, which stated that they produced the children in open court, and intended to raise and try an issue which only the court of chancery could lawfully try; on October 18thr 1895, they entered in the office of the clerk of that court a general appearance to the cause, and the answers which they subsequently made to the petition were entitled in that court and filed with its clerk, and alleged that they produced the children, not before the vice-chancellor as a magistrate, but before the court. True, they addressed their answers to “His honor John T. Bird, one of the vice-chancellors of the State of New Jersey,” but that address, when considered in connection with their other acts, only signified their intention that the cause in the court of chancery should be heard by him as an officer of that court, for in no other capacity could he acquire jurisdiction over the subject-matter which they presented for adjudication.

We think that the pendency of the cause in the court of chancery, by consent of the litigants, is clearly shown.

The next question relates to the scope of the issue.

As already stated, the orders of October 15th and 22d, to which both parties expressly agreed, unequivocally declare their purpose to raise and try an issue touching the permanent custody of the children. Such an issue is foreshadowed in the petition for the writ, which avers its object to be to take the children from the custody of Mrs. Perrine, who claimed to hold them under the will of their father, her brother, and to restore them to Mrs. Slack, their mother. In the answers to this petition,'this issue is distinctly presented, it being therein claimed that Mrs. Perrine is legally entitled to the care, custody and control of the children during their minority, as their testamentary guardian under the will of their father. In reply to these answers, the petitioners meet the issue by denying the validity of the alleged will, and its legal effect if valid, and insist upon the right of Mrs. Slack, as mother and natural guardian of the children, to have their care and custody committed to her, even though they should prefer to remain with Mrs. Perrine.

These pleadings plainly put in question the rights of the contestants to the possession of the children during their minority.

The third reason assigned for the vacation, of the decree is that it was made without the respondents’ having, had a proper opportunity to be heard.

The chancellor’s order of Hovember 25th, 1895, formally referring the cause to Vice-Chancellor Bird, seems to have been made without notice to the respondents, but in view of the fact that the repondents had addressed their answers to the vice-chancellor, and had also applied to him for a postponement of the hearing, they should be presumed to have assented to such a reference, without which their own proceedings in the cause were eorcim non judioe. As to the time set for hearing, the record indicates that, by consent of parties, a day had been duly appointed; that thereafter the respondents had asked for a postponement, which had been refused by the vice-chancellor, and a peremptory order had then been made by him, in presence of the solicitors and counsel of both sides, that the cause should be heard on November 26th, 1895. Nothing further was necessary to enable the court to try the case at the time so designated.

Our conclusion is that the decree of November 26th, 1895, made by the chancellor on the advice of the vice-chancellor, committing the care, custody and control of the children to Mi’S. Slack during their minority, was made in a cause pending in the court of chancery, was within the issue raised in that cause, and does not appear to be invalid for want of due opportunity for the parties to be heard.

The order vacating it should, therefore, be reversed.

In this determination we do not intend to forestall any application which the respondents may think fit to make to the court below for a fuller investigation of the merits of the cause.

For reversal — Depue, Dixon, Gummere, Barícalow, Dayton, Nixon — 6.

For affirmance — Mague, Van Syoicel, Bogert, Hendrickson, Krueger — 5.

Per Curiam.

The respondents having failed to produce at the final hearing the young children who were the subjects of controversy in this cause, the vice-chancellor at once, without any notice to the respondents, took depositions ex parte as to the reasons for their non-production, and forthwith advised orders adjudging the respondents to be in contempt, and directing that they be confined in the county jail until they should purge themselves of the contempt. The chancellor accordingly signed such orders, but, subsequently, on application by the respondents, set the orders aside. Hence this appeal.

Clearly, the orders vacated should not have been made. The alleged contempt was not committed in facie curice, and therefore the parties accused should have had ample notice and full opportunity to make defence before they were condemned. In re Cheeseman, 20 Vr. 115 ; 4. Encycl. Pl. & Pr. 781.

The order appealed from should be affirmed on this ground.


text:
    Satterlee Arnold and Anna M. Arnold, his wife, appellants, v. James Talcott, respondent.
    1. In equity, a contract between husband and wife relating to the wife’s separate estate is as valid against the husband’s creditors as if the wife were a feme sole.

    2. If a married woman bona fide employs her husband to devise and perfect mechanical inventions for her, she agreeing to pay all the expenses to be incurred and also to pay him a salary out of her separate estate, and in pursuance thereof the patents for his inventions are issued to or assigned to the wife, the patents and their proceeds are the separate property of the wife and cannot in equity be reached by the creditors of the husband. Taylor v. Wands, 10 Dick. Ch. Rep. 491, reaffirmed.
    On appeal from a decree advised by Vice-Chancellor Reed, whose opinion is reported in Talcott v. Arnold, 9 Dick. Ch. Rep. 570.

      Mr. Elwood C. Harris and Mr. Charles L. Corbin, for the appellants.

      Mr. John B. Vreeland and Mr. Stephen H. Little, for the respondent.
   The opinion of the court was delivered by

Dixon, J.

A general statement of the circumstances of this case may be found in the opinion of the learned vice-chancellor, and need not be here repeated.

A fundamental difference exists between the view taken by the vice-chancellor and that taken by this court regarding the central fact in controversy. We believe (although he did not) in the substantial truth of the testimony of Mr. and Mrs. Arnold concerning their agreement made in 1879. They both testify that then, shortly after Mr. Arnold’s assignment for the benefit of his creditors, it' was agreed that Mrs. Arnold, out of her own means (being a legacy of $10,000 just before Left to her), should furnish all the money required by Mr. Arnold in experimenting for the purpose of devising, developing and perfecting mechanical inventions, and also should pay him a salary of $1,200 per annum, which he was to devote, as far as necessary, to the support of his family; and that, in consideration thereof, Mr. Arnold should employ his skill and labor for the purpose mentioned, and should cause all his inventions'and whatever patents might be issued therefor to become the separate property of Mrs Arnold. To this testimony there is no contradiction. It is corroborated by their conduct since the time of the -alleged making of the bargain; for no doubt exists that Mrs. Arnold employed almost the whole of her private fortune in the manner stipulated, and all the patents secured for Mr. Arnold’s inventions were issued or at once assigned to his wife, and have always been treated as hers.

It is true that, in managing the business which this arrangement contemplated, the husband has not been held to such a strict account, and the wife has not exercised such careful scrutiny as would be looked for if they had been allied in business only, but, considering their close family relationship, this freedom on the one side and confidence on the other militate scarcely at all against the reality and bonafides of their business contract.

The contract itself was one likely to be made under the circumstances, for Mr. Arnold’s ability to support his family seems to have depended mainly on his inventive skill, and his insolvency rendered it improbable that lie would find any other source than his wife’s funds for supplying his pecuniary wants. Nor can any unfairness be charged, at least against Mrs. Arnold. In view of the extreme fallibility of all attempts at mechanical invention, and the actual failure of Mr. Arnold up to that time, it perhaps required the faith of a wife in her husband to subject all one’s fortune to the hazard of such an enterprise.

The result of the contract is that seventeen patents stand in Mrs. Arnold’s name, of which only two or three seem to have any value; that out of these two or three large sums of money have been received, most of which has, however, been spent, in further experimentation, leaving in her hands at present property worth about $16,000, besides the patents and the contracts made under them.

This being the state of affairs, the question arises whether a court of equity should aid Mr. Arnold’s creditor to collect his debt out of Mrs. Arnold’s possessions.

The complainant urges that such 'assistance should be given him for three reasons — -first, because the contract was made with intent to delay, hinder or defraud the husband’s creditors; second, because the parties were incapable of contracting with each other, and third, because a person’s agreement to assign, in gross, all his future labors as an inventor, or the products of those labors, is invalid.

On the grounds above stated, we believe the contract to have been made bona fide for valuable consideration on both sides, and without any improper design. The inability of husband and wife to contract with each other exists at law only; in equity, their contract relating to the wife’s separate property is as valid as if the wife were a feme sole. Perkins v. Elliott, 8 C. E. Gr. 526. The present contract related to Mrs. Arnold’s separate estate.

As to the third reason, while the proposition there advanced may be sound (Aspinwall Company v. Gill, 32 Fed. Rep. 697; Joliet Manufacturing Co. v. Dice, 105 Ill. 649), yet certainly, after the contract has been fully performed by the actual transfer of the patents obtained upon the inventions and the payment of the consideration to the inventor, a court of equity cannot be induced to undo the transaction and take back the patents merely because the contract had not been legally enforceable. At that stage the transaction has become simply a completed sale and delivery of personal property for a valuable consideration previously received, and is in .all respects unobjectionable.

The present case, as we regard it, falls directly within the principle very recently applied by this court in Taylor v. Wands, 10 Dick. Ch. Rep. 491, that a married woman may invest her separate estate in any legitimate business, and employ her husband as her agent to carry it on for her, without rendering it or the profits of it liable for her husband’s debts; the profits of the investment, produced through the purchased labor and skill of the husband, will, like the capital itself, be the separate property- of the wife.

The decree of the court below should be reversed and the bill dismissed.

For reversal — The Chief-Justice, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Yan Syceel, Bogert, Dayton, Hendrickson, Nixon — 12.

For affirmance — None.