author: Beed, V. 0.

text:
    Robert Lanning v. The Chosen Freeholders of the County of Mercer.
    [Filed December 1st, 1902.]
    Where a tract of land was overassessed for a macadam road, owing, to a mistake by the commissioners as to the number of acres in the tract, and the owner did not receive notice of hearing for confirmation or of confirmation given as ordered by the court, pursuant to Gen. Stat. p. 2907 §§ 421, 426, until after the expiration of the thirty days from the confirmation, within which time cortiorari was, by such statute authorized, the supreme court could declare such, limitation unreasonable in such case, and a bill filed by the owner to restrain the collection of the excessive assessment should show that he lia-d already applied to such court for a writ of certiorari on such facts, and should also show clearly the facts regarding his failure to see the published notice.
    On motion to strike out the bill for want of equity.
    The complainant sets up that his property was specially assessed for a macadam road in the county of Mercer, and that the commissioners fixed as the basis of such assessment the rate of $3 per acre, but that, by a mistake in respect to the acreage of his property, he was assessed the sum of $140 instead of $65.22.
    All persons interested in the report of the commissioners were ordered to appear before the circuit court of Mercer county on January 21st, 1902, which order was duly published in two newspapers, as directed in the order. On that.day the report was confirmed. The complainant says that he had no actual notice of the day, and that the first information he had of the report was when he received his notice from the collector, on the 9th day of June, 1902. He then applied to the circuit court for relief, which was refused on the ground of want of jurisdiction in the circuit court to correct the report after it had been confirmed. The prayer of the bill is that the report may be corrected, and that the board of chosen freeholders may be enjoined from receiving more than $65.22.

      Mr. Aaron V. Dawes, for the complainant.

      Mr. J. Lefferls Gonard, for the defendant.
   Beed, V. 0.

The usual remedy for' an irregularity in the imposition of taxes or assessments is by a writ of certiorari. To warrant the interference of a court of equity there must be some peculiar ground of equity jurisdiction. Hoagland v. Township of Delaware, 2 C. E. Gr. 106; Hoboken Land and Improvement Co. v. Hoboken, 4 Stew. Eq. 463.

It is insisted that jurisdiction is acquired by this court in this case because of the presence of the element of accident; and this accident is said to arise from the fact that the commissioners mistook the acreage of the land to be assessed. Such a mistake, however, was a mere irregularity, entirely remediable by a writ of certiorari. The accident, if it exists at all, arises out of the fact that the complainant did not happen to see the notice published in the two newspapers. Had he received notice of the time which the circuit court had fixed for the. hearing of the parties assessed, there would be no possible ground for invoking the aid of a court of equity.

The scheme provided for the imposition of the assessment is to be found in Gen. Stat. p. 2007 §§ 421, 426. The scheme includes—first, an application for the appointment of commissioners to make the assessment; secondly, a hearing before the commissioners of the parties interested; thirdly, a report to the circuit court by the commissioners; fourthly, upon the -coming in of the report notice to be given to the parties interested of the time and place of bearing any objections that may be made to such assessment, and the notice shall be such as the circuit court shall deem proper; fifthly, the confirmation of the report or a reference back to the commissioners for correction until a report is obtained which is confirmed; sixthly, a designation by the court of what notice, if any, shall be given, by publication and otherwise, of the confirmation of the report.

The act also provides that no certiorari shall be allowed after thirty days from the making of the order confirming the assessment.

The act also declares that the report of the commissioners, when confirmed, shall be final and conclusive.

The effect of the latter declaration in similar statutes has received judicial consideration in the cases of Benedictine Sisters v. Elizabeth, 21 Vr. 347; Stockton v. Newark, 29 Vr. 116; Brown v. Town of Union, 33 Vr. 142, 147.

This declaration, coupled with the thirty dáys’ limitation of time within, which period the issuance of a certiorari is confined, 'deprives the complainant, as he insists, of any legal remedy. If I were satisfied that there was no legal remedy, and that the complainant, without fault on his part, failed to be apprised of the time and place of the hearing before the circuit court, I should regard it as a case for equitable interference. Says Mr. Freeman: “A party who has been wronged by being judged without opportunity to make defence, may avoid the adjudication in various ways,” and one of these ways he indicates is equitable aid to prevent the execution of a judgment.

To this same purport is the text of Freem. Judg. § 134 and High Inj. § 222. A defendant in a judgment at law, who has a defence which he might have successfully made at law had he had an opportunity, but who is prevented from doing so by accident, unmixed with negligence, may have the benefit of his defence by suit in equitv. Herbert v. Herbert, 4 Dick. Ch. Rep. 70.

In this case, however, it is not clear to my mind that the complainant is without means of redress at law. Fone of the cases cited concerning the statutory declaration, as to the final and conclusive character of the confirmed report of the commissioners, deals with the circumstance that an assessed party failed to appear before the circuit court because of insufficient notice of the time and place of hearing, or because, by accident, he failed to receive notice.

In respect to the thirty days’ limitation of time within which a certiorari is to be allowed,, the supreme court has the power to declare such limitation unreasonable in a particular case. Greene v. Jersey City, 13 Vr. 118, 565; Van Anglen v. Bayonne, 27 Vr. 463.

.1 am of the opinion that it should appear that the complainant had already applied to the supreme court for a writ upon the facts disclosed to this court in this bill.

I will remark, also, that the facts regarding the failure of the complainant to see the published notice are not stated in the bill with that degree of fullness which the case requires. This is the very point upon which complainant’s right to relief must rest; and all the circumstances should be disclosed, so that the court can see that the failure to receive notice was not the fault of the complainant.

Indeed, the defendant insists that the bill itself, shows that the complainant must have been negligent in not having obtained knowledge of the time and place of hearing. I cannot draw such a conclusion from the meagre facts stated.

It is perceived that no time is fixed by the statute within which the report shall be filed. It may be filed in three days or in three months after the hearing before the commissioners.

It is also perceived that the statute itself does not prescribe the kind of notice which shall be given. Indeed, it does not say whether the notice is to be a personal notice or constructive notice; or personal notice to known or resident owners, and constructive to non-resident owners; and in respect to constructive notice, the statute does not require that it shall be published in any particular way or in any specified class of newspapers. The person assessed, therefore, has no hint from the statute that he might expect a notice to be published in any class of papers or •in any newspaper at all. Indeed, it might be a query whether the legislature intended to empower the court to direct constructive notice to be given to resident owners at all. The statutory direction is that the court shall cause such notice to be given as it shall deem proper of the time and place of hearing objections to the assessment. It is to be observed, also, that in directing the notice of the confirmation of the assessment to be given, if given at all, the act directs that it shall be given by ;publication or othemoise, while in respect to the other notice publication is not mentioned. t

IJpon the other ground I think the bill should be struck out.


source: Caselaw Access Project

author: Reed, V. C.

license: Public Domain

text:
    James Ayres v. Charles E. Shepherd, executor, et al.
    [Filed December 4th, 1902.]
    Though an executor is made trustee by a provision in the will giving Mm power to sell and take charge of the real estate, a suit merely to foreclose a mortgage thereon is not within P. L. of 1898 p. 738 § 65, providing that to enable executors or administrators to examine into the condition of the estate and ascertain the amount and value thereof, and the debts to be paid therefrom, no action shall be brought against them within six months after granting of probate to an executor, or letters of administration to an administrator.

      Mr. Isaac 0. Acton and Mr. Jonathan W.. Acton, for the complainant.

      Mr. J. Ogden Burt, for the defendants.
   Reed, V. C.

A single question is presented in each of these two cases—a question arising under the provisions of the Orphans Court act. P. L. of 1898 p. 738 § 65. This question is whether the suits were prematurely brought. • ' •

The owner of the equity of redemption, who is the assignee of the right of the mortgagor, died December 2d, 1901, testate, naming in his will Charles E. Shepherd as his executor. The complainant, who held, by assignment, the two mortgages on different portions of the real estate of the deceased owner of the equity of redemption, filed these' bills to foreclose his mortgages on March 21st, 1899, within a period of less than six months from the death of the said owner.

The defending executor has set up the provisions of the act just mentioned, and insists that he was not suable by the complainant for this cause at the time the bill was filed.

This is the language of the statute:

“To enable executors or administrators to examine into the condition of the estate and ascertain the amount and value thereof, and the debts to be paid out of the same, no action, either at law or in equity, except for funeral expenses, shall be brought or maintained against the executors or administrators of the estate of any decedent within six months after probate shall have been granted to such executor or executors in case of a will, or letters of administration shall have been granted jto such administrator or administrators in case of intestacy, or with a will annexed, as the case may be, unless by special leave of the court wherein such action is intended to be brought.”

Inasmuch as the bills are purely foreclosure bills, seeking no relief against the executor as such, nor an accounting from him, the case of the United Security Life Insurance and Trust Co. v. Vandegrift, 6 Dick. Ch. Rep. 401, would seem to settle the question mooted.- In that case it was held that these statutory provisions do not include a suit for the foreclosure of a mortgage.

But it is insisted that the facts in that case differ from this, in the particular that Mr. Shepherd, by the will of the deceased owner, was invested with certain control over the real estate; while in the decided case the representative was a mere administrator, whose duties were confined to the administration of the personal property of the intestate. Now, it does appear that in the will appointing Mr. Shepherd there are these provisions:

“I wder and direct that my real estate shall be sold by my executor, either at public or private sale, as he may deem best, within three years after my decease, but the farm where I now live shall not be sold in less than two years after my decease. Until the said real estate is sold, I dii'ect my executors to take chax’ge of and manage the same in sxxch way as shall seem best for my estate.”

It appears that the executor has taken charge of the mortgaged land under the power given him.

It is perceived that the power to sell and to take charge of the real estate until such sale is a trust entirely disconnected from the purely executorial duties of Mr. Shepherd. Tainter v. Clark, 13 Metc. 220. The respective duties are as distinct as if the power was conferred upon a person other than the executor.

The power of sale and to take charge of the property has nothing to do with the gathering in of the assets of the estate for the purpose of paying the debts of the testator and distributing the residue. The latter duties only belong to Mr. Shepherd, qua executor. The duties under the power pertain to him as a pure trustee. Says Mr. Woerner:

“The offices of an executor and of a trustee are distinct and may be vested in different persons; and when they are vested in the same person, the functions of each are nevertheless to be performed by him in the respective capacity; the probate court having jurisdiction over him in the one and not in the other capacity.” Woern. L. Ad. § 229; Brush v. Young, 4 Dutch. 237.

Now, the ratio decidendi in the case of the United Security Life Insurance and Trust Co. v. Vandegrift, supra, is this, namely: “The plain design of the act is to afford him [the executor or administrator] an opportunity to see whether the estate committed to his administration is sufficient to pay the debts of the intestate [or testate] in full or not, and if it is not, that he may institute such proceedings as shall secure an equal distribution of the estate among his creditors, and prevent one or more of them from acquiring, by suit, a preference over the others. Hence, it seems plain that the suit against the administrator, which is not designed to charge or attack the estate committed to his administration, and in which no judgment can be pronounced or decree made which will attack such estate, is within neither the reason nor the policy of the statute.”

Now, as already observed, the power of the executor in this case over the real estate was not given for the purposes of an ordinary administration. The executor has undoubtedly the power to sell the real estate in case of insolvency by force of the statute, just as the administrator had in the case cited. But, as in that case, the existence of this power did not make the exemption applicable, so it does not in -this case. The representative was a party in that ease, as in this; but as he did not represent any person interested in the real estate in that case, so the executor does not represent any interest, qua executor, in this. His interest in the real estate is solely that of a trustee. So I am of the opinion that the statute is inapplicable to this suit.

This result seems to be in accord with the general rule with respect to statutes limiting the time in which claims must be presented to the executor or administrator. Says Mr. Woerner:

“Mortgages and vendor’s liens may generally be foreclosed without having proved the debt in the probate court or making the affidavit of the claimants presenting demands against the administrator, or proceeding within the time required for the presentation of claims against estates of deceased persons.” 2 Woern. L. Ad. *860.

I think there must be decrees for the complainant for the amount agreed upon in the stipulation.


author: Stevens, V. C.

text:
    The Township of Woodbridge v. The Raritan Traction Company.
    [Filed October 28th, 1902.]
    Traction act of 1893, section 1 (Gen. Stat. p. 3235), requires a street railroad corporation, before using any street or highway, to obtain the consent of the governing body “of the township or county” within which the street or highway used is located. Act of 1894 (Gen. Stat. p. 3247) provides that, in addition to the restrictions prescribed by law, no street railroad shall be constructed in any street in any municipality, town, township, village or borough without the consent of its governing body, and act of 1896 (P. L. of 1896 p. 329) requires the consent of the governing bodies of cities, towns and villages, and declares that if any board or public authority other than the governing body of such municipality, town or village shall have control of any of the streets or highways over which the tracks are to be located, the consent of such other body or public authority shall also be obtained.—Held, that though under the act of 1893, the consent of the governing body “of the township or county” only need be obtained, the subsequent acts required the consent of both county and township or other municipality within the territory in which the railroad lines were proposed to be built.

      Mr. J. Ii. Thayer Marlin, for the complainant.

      Mr. Edward Q. Keasbey and Mr. Bichard V. Lindabury, for the defendant.
   Stevens, V. C.

This seems to me to be a plain case. The defendant company, on July 21st, 1900, filed an extension of its route along what was called New road—a highway in Woodbridge township, which is a continuation of State street in Perth Amboy. Owing, I suppose, to the fact that the highway was not graded, the company elected to change its route as extended, and to construct an electric railway over private property on a line parallel to the highway -extending to Woodbridge creek. The board of chosen freeholders has recently constructed a bridge over the creek connecting New road with State street. On October 2d, 1901, the board passed an ordinance giving to the company its consent to construct, operate and maintain a street railway

“in, over and upon the bridge in process of construction over Woodbridge creek, at the northerly terminus of Railroad avenue, now State street in the city of Perth Amboy, and in, over and upon the approaches to said bridge.”

One of these approaches is in Woodbridge township and the other in Perth Amboy. The township of Woodbridge objects to the construction of the road over the Woodbridge approach, on the ground that its consent thereto has not been given.

The plan is, by means of a curving track, to extend the present terminus and to get upon the approaches to the bridge without otherwise occupying New road. It is claimed that by doing so the company will not be obliged to get the township’s consent. Defendant’s contention is that the approaches are part of the bridge, and subject to the exclusive control of the freeholders. The township’s contention is that while the consent of the freeholders must be given, the consent of the governing body of the township is also necessary.

The traction company was organized under the Traction act of 1893. Gen. Stat. p. 3235. This act (section 1) provides that no corporation created under it shall enter upon or use any street or other highway for the extension or construction of new lines of railway without the consent, inter alia,'oí the governing body of the township or county into or within the limits of which such line is proposed to be extended or constructed.'

The duty of erecting and maintaining bridges devolves upon the board of chosen freeholders. McKinley v. Chosen Freeholders of Union County, 2 Stew. Fq. 164; Whitall v. Freeholders of Gloucester County, 11 Vr. 302. This duty includes the duty of constructing and maintaining its approaches regarded as part of the bridge. Freeholders of Sussex v. Strader, 3 Harr. 108. The bridge, with its approaches, is a part of the highway. Proprietors of Bridges v. Hoboken Land Improvement Co., 2 Beas. 503; Elmer v. Freeholders, 28 Vr. 366; Mahnken v. Freeholders, 33 Vr. 405.

The defendant’s argument is that the consent intended by the Traction Company act is the consent of the freeholders, because they are the governing body of the county specially charged with the duty of maintaining bridges. It had been held in a case arising under the act of 1886, which provides for the incorporation of street railways, that the consent of the freeholders to the laying of the tracks must be obtained (Lewis v. Freeholders, 27 Vr. 417); and the contention is that the like consent is all that need be obtained under the Traction act. The language of the act favors this construction, for the consent is declared to be that of the governing body of the township or county in which the line is to be constructed. It was held in the case last cited that the consent of the freeholders must be obtained, even in the absence of express statutory requirement, for the reason that the freeholders, being charged with .the duty of maintenance, could not properly perform that duty unless they could, within reasonable limits, control the mode in which bridges should be used. As the governing bodies of counties are named in the act; as these bodies had exclusive control over bridges, and as the consent of only one body was, in terms, required, it is fair to suppose that the legislature intended to lodge the power of consent where it was lodged before, and to do no more than embody in the form of express enactment what had been theretofore adjudicated.

But this concession does not help the defendant, for we have two other and subsequent acts to deal with—the act of 1894 ( Gen. Stat. p. 3247) and the act of 1896. P. L. of 1896 p. 329. The first of these acts omits all reference to the governing bodies of counties, and provides that, in addition to the restrictions “now” required by law, no street railroad shall be constructed in any street, highway or public place “in any municipality, town, township, village or borough” except upon the consent of its governing body, which “may, by ordinance, and not otherwise,” grant permission to construct, but only after there shall have been filed with its clerk the consent, in writing, of the “owner or owners of at least one-half in amount in lineal feet of property fronting on the highway.” It must be admitted that these provisions do not obviously point to freeholders. T,[ie omission to refer to the governing body of counties, as the Traction act had done, the direction that the consent was to be given by ordinance, and not otherwise, the requirement relative to consents and the explicit language that these restrictions were in addition to those now required by law, would all seem to point to the consent of a municipal corporation, which was to be in addition to the consent of the board of chosen freeholders.

If there was any doubt about this, the act of 1896 has entirely removed it. This act, after requiring, in much the same language as the act of 1894, that the consent of the governing bodies of cities, towns, townships, villages and boroughs should be obtained, together with the written consent of the owners of at least one-half in amount in lineal feet .of property fronting on the highway, in its second section uses the following language:

“Provided, however, that if any board, body or public authority, other than the governing body of such municipality, town, township, village or borough, shall have control of any, of the streets and highways in and over which the tracks of such company are located, the consent of such other board, body or public authority shall also be required,” &c.

We have in this act two classes of governing bodies, distinctly contrasted with each other. The first section substitutes for the word “municipality,” as first used in the act of 1894, the word “city,” thus doing away with an ambiguity, if any really existed, and then specified “towns, townships, villages and boroughs” as being, with cities, the bodies whose consent must be obtained. The second section deals with boards; bodies and public authorities, other than the bodies above named, and says that llieir consent also must be obtained. If this act does not provide for a double consent, it seems to me that language is powerless to do it.

I think the complainant is entitled to an injunction.


text:
    William R. Willcox et al. v. The Trenton Potteries Company et al.
    [Filed November 26th, 1902.]
    1. A corporation entered into an agreement with another for the substitution of non-cumulative for cumulative dividend-paying preferred stock and the funding of dividends in arrears. The agreement provided that the corporation should issue to each assenting holder of preferred stock a funding certificate for the arrears, which should carry interest at four per cent, per annum, payable exclusively out of the net profits of the corporation for the year, and should not be cumulative, and should be payable in priority to any dividends on the capital stock for the year. —Held, that the agreement did not provide that the interest fund should be made a first charge on all the earnings to the exclusion of non-assenting holders of preferred stock, and, if the corporation made provision for the payment of such interest, it would be required to pay a like amount to such non-assenting holders.
    2. The court, at the suit of a non-assenting holder of preferred stock, will not issue a temporary injunction restraining the corporation from carrying the agreement into effect, for no irreparable injury will result to him. If, after the consummation of the agreement, an attempt is made to pay dividends to assenting holders of preferred stock in preference to non-assenting, the latter can assert their rights by a proceeding in court.
    3. The court, at the suit of non-assenting holders of common stock, will not issue a temporary injunction restraining the corporation from carrying the agreement into effect, as it works to their benefit in that it accelerates their chances of participation in dividends.

      Mr. Halsey M. Burrell, for the complainants.

      Mr. Richard V. Lindabury and Mr. John-W. Griggs, for the defendants.
   Stevens, V. C.

This is an application for a preliminary injunction to restrain the -Trenton Potteries Company from carrying into effect an agreement for funding arrears of dividends on preferred stock and for exchange of stock certificates. The Trenton Potteries Company filed its certificate of organization on May 29th, 1892. The certificate authorizes the issue of preferred stock to the amount of twelve thousand five hundred shares and of common stock to the amount of seventeen thousand five hundred shares. It provided that the holders of preferred stock should be entitled to receive, and the company should be bound to pay, a yearly cumulative dividend of eight per cent., payable, quarterly, from surplus or net profits, before any dividend should be set apart or paid on common stock. All this stock was issued.

Shortly prior to July 1st, 1902, an agreement was entered into between the Trust Company of the Republic, on behalf of the holders of preferred and common stock, and the Trenton Potteries Company, having for its general object the substitution of non-cumulative for cumulative dividend-paying preferred stock, and the funding of dividends in arrears. The agreement was to be carried into-effect by an amendment to the certificate of incorporation and of the by-laws, and by the surrender by the ratifying stockholders of their stock certificates in exchange for new ones conforming to the provisions of the agreement. The amendment received the assent of more than- two-thirds in interest of each class of stockholders. The objecting complainants, one of whom is a preferred stockholder and three of whom are common stockholders, did not consent and did not attend the meeting at which the amendment was adopted.

The amendment to the certificate of incorporation contains this clause:

“The holders of said preferred stock shall be entitled to receive,, and the company shall be bound to pay thereon, a yearly cumulative dividend of eight per centum, payable quarterly, from surplus or net profits arising from the business of the company before- any dividends shall be set apart or paid on the common stock; provided, however, that the dividends on the preferred- stock held by such shareholders, their successors in title and assigns,, who have ratified or shall ratify a certain agreement (the agreement in question) * * * a copy of which agreement is hereto attached and made part of this certificate shall, from and after the said 1st day of July, 1902, be non-cumulative.”

The agreement provides, in paragraph 6, that

“this agreement is intended to bind all the stockholders of the company who shall ratify the same and their shares of stock, and, also, their respective successors in title.”

The complainants base their application largely upon the decision in Pronick v. Spirits Distributing Co., 13 Dick. Ch. Rep. 97. But that case differs from the present one in this vital particular: There it was sought, by an.amended certificate, to reduce the dividend on all the preferred stock against the will of non-assenting stockholders. Here both- the amendment and the agreement, in explicit language, provide that the proposed change shall operate only upon those who consent; consequently the contract of the complainant Willcox, contained in his stock certificate, remains-unchanged.

If the agreement is unlawful, it must be, not because it is •attempted to change the contract, but because it is sought to divert the surplus. The insistment, on this head, is that the agreement gives an exclusive benefit to those who ratify, by allowing them interest on the funded dividends and making this interest a first charge upon the net earnings.

The clauses objected to read as follows:

“Whereas, Owing to- various causes the company for several years, and on the several dividend days therein, to wit, from September 10th, 1894, to December 10th, 1899, both inclusive, had no profits with which to pay dividends to 'its shareholders, in. consequence whereof the dividends on said preferred stock have fallen into arrears so that the arrears now due, in respect of the dividends on such preferred shares, amount to $550,000, being forty-four per cent, of the par value of such preferred shares.
“Now therefore, the company shall, when this agreement becomes binding, * * * issue to each holder of preferred stock who shall have ratified this agreement a funding certificate or certificates in the form hereto attached for so much of the arrears of $550,000 aforesaid as shall be owing in respect to the preferred stock held by him.
“(2) The principal sum specified in each such certificate shall carry interest at the rate of four per cent, per annum, but such interest as regards each year shall be payable exclusively out of the net profits of the company of that year and shall not be cumulative. Such interest shall be payable in priority to any dividend on the capital stock for such year.”

Two questions arise: (1) Does the agreement, in fact, provide that the interest fund shall he-made a first charge upon all the net earnings? (2) If it does, is the complainant Willeox entitled to a preliminary injunction to restrain its execution?

The agreement, on first reading, seems to make the fout per cent, interest payment a first charge. This is not so clear on further consideration. It is drawn upon the assumption that all the stockholders will agree to it. It is, in terms, a contract between the potteries company and the trust company, “on behalf of the holders of preferred stock and the holders of the common stock”—a description broad enough to include all the holders of both classes of stock. But the trust company could, as a matter of fact, only become the agent or trustee of those who assented; and its benefits and obligations are, in paragraph 5, expressly limited to these. It must, then, be read in this sense. So reading it, the words “capital stock” in that clause of paragraph 2, which declares that “such interest shall be payable in priority to any dividends on the capital stock for such year,” would merely refer to the capital stock of those who assented. This construction is greatly fortified by the following considerations:

The “interest” referred to in paragraph 2 is interest on unpaid dividends. It is not payable at all events, but only out of net profits. It is not even payable out of net profits generally, but, in the words of the agreement, “interest as regards each year- shall be payable exclusively out of the net profits of that year and shall not be cumulative.” So that what is really meant is not interest, properly so called, but a dividend on funding certificates. Nothing is better settled in the books than the distinction, between interest chargeable upon all the assets and arising out of the forbearance of a debt, and dividends' payable out of earnings. We'must regard,- not the. names of things, but their substance. If 'the four per cent, payment is a dividend, it is plain that it cannot be made to 'some of the class of preferred stockholders to the exclusion of others.' This is the language of all the'cases. Andrews v. Gas Meter Co., 1 L. R. Ch. 361 (1897), is not a case to the contrary. It was there held, on appeal (overruling Hutton v. Scarborough Cliff Hotel Co., 2 Drew. & S. 514, and the decision below), that a limited company, having no authority under its memorandum ox' articles of association to create any preference between different classes of shares, may, by special resolution, alter its articles so as to authorize the directors to issue preference shares-by way of increase of. capital. This only goes--to the extent of deciding that’where, by the memorandum of association, it is provided that the capital shall be divided into shares, “with power to increase the capital, as provided by the articles of association,” the capital can be increased by the creation of a- new class of preferred shareholders, who shall take in priority to the classes originally constituted. It is' open to doubt whether this decision is in accord with the weight of authority in this country (see 2 Thomp. Corp. § 2244); but its rationale is as follows: A general power to issue stock, authorized by the Companies’ act and given by the memorandum of association, includes a power to divide the stock into classes, and to divide- them into classes, not. merely' at the outset, but at any time. On this construction of the language of the memorandum, and because the terms of that instrument entered into every contract, express or'implied, which the company might make with its stockholders, it was' held to follow, 'as a logical consequence, that it was no breach of the original contract to provide for the formation of a new class of shareholders, to which 'might be given a preference over the other classes then'in- esse, whether common or 'preferred. But it is evident this is a very different thing from asserting' that, as between members of an already existing class, whose contract is equality inter sese, the company may subsequently, and without any reservation of power in the first instance, vary their rights at pleasure.' I have been referred to no case which so holds, and I doubt very much whether any such ease can be found. In Allen v. Gold Reef Co., 1 L. R. Ch. 656 (1900), it was merely held that the company had power to extend its lien for indebtedness to shares already issued and full paid.

I think it plain, therefore, that if the potteries company are going to provide for the payment of a dividend to some of the members of the class of preferred stockholders, they must provide a like dividend for other members of the same class.

The agreement in the case at bar does not, in terms, deny to the non-assenting stockholders participation in any dividend. It does declare that it shall bond only those who ratify. The rights of those who do not ratify are not, in anywise, alluded to. But one of those rights, and that, perhaps, the most valuable, is that the preferred stockholders shall share equally in the surplus earnings. To hold that this right has been taken away by doubtful implication would be unwarranted.

There is another consideration leading to the same conclusion. In Andrews v. Gas Meter Co., supra, the company had power, under the Companies’ act, to alter its articles of association. It was in the exercise of this power that a new class of shareholders was created, and even in this way difficulty was felt in conceding that a preference could be given. In the case at bar no attempt is made, by the amended certificate, to give the power to prefer part of the class of preferred stockholders to another part in the payment of dividends. All that is there authorized is that dividends on the preferred stock shall, as to those who consent, be, after July 1st, 1902, non-cumulative. It is quite impossible to attribute to an agreement, in terms binding only on those who assent, the same force and effect that was, in the English case, given to an amendment to the articles made in the manner authorized by the Companies’ act and, in terms, binding on all.

I think, therefore, that the agreement must be read in the light of well-established legal rules, and that, so read, it is not to be construed as providing for an unequal distribution of the surplus earnings among the preferred stockholders; and that it will be the duty of the directors, when out of net earnings they set aside a sum equal to four per cent, of the funding certificates, to set aside, apart, a proportionate sum, whether that sum be called interest or dividend, for the benefit of those who do not assent.

But if the agreement should be read as an attempt to vary the rights of non-assenting stockholders, it does not follow that an injunction should issue restraining the consummation of the scheme. The amendment of article third is, as I have said, unobjectionable. The proposed plan, formulated in the agreement, is manifestly beneficial to the company, and is desired ‘by the great majority of its shareholders, common and preferred. No irreparable injury can result to the complainant Willcox if it be carried into effect. If, after it has been consummated, any attempt is made to pay dividends to the other preferred shareholders, in preference to himself, he can easily, by a proper proceeding in this court, assert his legal right to a proportionate share, notwithstanding the provisions of the agreement, if it shall 'be read as denying his rights.

As to the objection taken to the scheme by the common stockholders, it seems to be quite untenable. It is manifestly for their benefit that the preferred stockholders should waive their right to the immediate payment of the dividends that have accumulated in the past and their right to all cumulative dividends in the future in consideration of a small reservation out of the earnings for a redemption fund and of a small payment thereout of interest, so called, both reservation and interest being noncumulative and being given in lieu of the company’s obligation immediately to pay, out of all surplus earnings, all past dividends.

. This works to the benefit of the common stockholders, in that it greatly accelerates their chances of participation in dividends, by postponing the payment of the considerable sum of $550,000, which is no longer an immediate and prior charge upon all surplus earnings: If the earnings in any one year exceed the eight per cent, dividend due the preferred stockholders for that year and the two above-mentioned items, amounting together to less than $50,000 per annum, the directors will be able to devote the excess to the payment of a dividend to the common stockholders, •discharged of their obligation to make up dividends in arrears. It is hard to understand how such, an arrangement can be an irreparable injury to common stockholders—an injury which calls for the immediate interposition of this court by preliminary injunction. If'illegal, its illegality is not apparent. The case, on this branch of it, comes within the familiar rulé of the Citizens Coach Co. v. Camden Horse Railroad Co., 2 Stew. Eq. 299.


author: Stevens, Y. C.

text:
    Samuel C. Howell v. Elizabeth H. Gifford et al.
    [Filed January 26th, 1903.]
    1. A testator gave his estate to his wife, and after her death he.provided that'it should be equally divided among his children. If any of the children died without leaving issue him or her surviving, the share of the deceased child was to be divided among the other children.' In the lifetime of the wife a son died leaving lawful issue..—Held, that the.son’s interest vested on the death of the testator, and that the contingency on which it was to be divested not having happened, it went, on the death of testator’s wife, to the son’s executor.
    2. During the continuance of the life estate a son died, leaving issue, and after him a daughter, without issue.—Held, that on the death of the widow the “heirs or legal representatives” of the son would take the portion of the daughter’s share, which the son would have taken had he dived.—Held, further, that under the designation-“heirs or legal representatives” the “heirs”, would take the real estate and the next of kin the personalty.

      Mr. J. Bayard Kirhpairich, for the complainant.

      Mr. Halsey M. Barrett, for II. Clay Howell.

      Mr. John R'. Hardin, for the executor of,Henry C. Howell.
   Stevens, Y. C.

This bill is filed to obtain a construction of the will of Theodore P. Howell. He died December 3d, 1878, leaving him surviving his widow, Elizabeth TV. Howell, who died February 12th, 1903, and six children. Of these children, four—a son and three daughters—died in tlicir mother’s lifetime, and two—a son and daughter—survive her.

By this will testator gave to his wife, for life, “the use of the income and interest” of all his estate, real and personal, which interest and income, or so' much thereof as she might require, to be paid to her by his executors for her and her daughters’ support. The fourth paragraph of his will proceeds as follows:

“Fourthly. After the death of my said wife, Elizabeth, I will that the principal sum of my estate, with the accumulations thereof, and of which I have given to her the income thereof, be divided among all my children,, each to have an equal share thereof; the parts or shares thereof going, to my sons to be paid to tliem, but with respect to the parts or shares which will thus go to my daughters, I wish and direct the same to be kept and retained by my executors and safely invested and held in common fund, and tbe income and interest thereof paid to my said daughters during the term- of their respective natural lives, each to have an equal share thereof and the same to be paid upon the respective individual receipt of said daughters. Upon the decease of either one of said daughters leaving lawful issue her surviving, then after the death of my said wife, I direct the portion of my estate of which I have thus given her the income, shall be paid to her said children, .each to have an equal part thereof, and if any of said children be under age, then said payment is to Be made to its legally constituted guardian. Should any of my said children, son or daughter, die without leaving lawful issue him or her surviving, then the share of the surviving son in such decedent’s portion of my estate so held by my executors shall be paid said son or his heirs or legal representatives, but the daughters’ shares in said decedent’s portion shall be retained by my executors and continued in the common fund, and the interest and income, paid, and finally, upon the death of said' daughters, respectively, the principal, as hereinbefore is provided, for the payment of the income and principal of said daughters’ shares of my estate.”

Two questions are raised by tbe bill. Tbe first relates to tbe shares of Henry C. Howell, testator’s deceased son. He died in January, 1900, and left two children—Elizabeth H. Gifford and H. Clay Howell—both of whom are now living. The. question is, to whom, under paragraph 4, does Henry C. Howell’s share go—to his executors or to his children?

The second question relates to the share of Elizabeth II. Mitchell. She died in October, 1900, after her brother Henry, without leaving issue. The question is, do “the heirs or legal representatives” of Henry take a proportionate part of Elizabeth’s share, and if so, who are meant by this designation ?

The answer to the first question is not doubtful. Henry took a vested interest in his share from tire time of his father’s death, payment being postponed during his mother’s life. This share was subject to be divested only by his death, in his mother’s lifetime, without leaving issue. The bare reading of the clause makes this evident.

‘.‘After the death of my said wife * * * I will that the principal sum of my estate, with the accumulations thereof, * * * be divided among all my children; each to have an equal share thereof, the parts or shares thereof going to my sons to be paid to them. * * * Should any of my said children, son or daughter, die without leaving lawful issue him or her surviving, then the share of the surviving son in such decedent’s portion shall be paid,” &c.

The gift to the survivors is found in the direction to pay or retain, and this payment is to be made on the happening of one contingency only, viz., death without leaving lawful issue. As the contingency did^not happen, the gift became, at Henry’s death, indefeasible. It was to go over if he died leaving no issue, and as he left issue, the vested estate which he took in the first instance continued. If it had not been so earnestly insisted that the cases of Baldwin v. Taylor, 10 Stew. Eq. 78, and Denise v. Denise, 10 Stew. Eq. 163, were opposed to this view, I should not have thought the case open to argument. That these cases are inapplicable to the present .situation will be seen on a little consideration.

In the first place, there can be no question but that the estate vested in Henry at testator’s death. It is true that the will provides, "Afer the death of my said wife I will that the principal sum be divided, * * * the parts or shares going to my sons to be paid to them,” &c., and that this direction, standing alone, if no life estate had been interposed, would have made the gift contingent; but, as the purpose of the postponement was to let in the interest of the widow, the estate vested at once. Post v. Herbert’s Executor, 12 C. E. Gr. 542; Miller v. Worrall, 14 Dick. Ch. Rep. 134 (affirmed on appeal). “It is immaterial,” says Chancellor Green, in Howell’s Executors v. Green’s Administrator, 2 Vr. 574, “whether the gift to the legatee for life is of the fund or of the interest or use of the fund.”

The precise point raised on behalf of Henry’s children is that they take an estate by implication arising out of the words “should any of my children die without leaving lawful issue,” &e. The argument is that, as testator had not, in terms, provided for the care of children dying leaving issue, and has only given the estate over in case they die without leaving issue, he must have intended the issue to take if he left any, and consequently he must be assumed to have given it to the issue. It is difficult to put this contention in plausible form, as applied to a cause like the present, for we at once ask ourselves, why imply an estate in the issue of the son, when, in express words, we find it given to the son himself.

In Denise’s Executors v. Denise, 10 Stew. Eq. 164, testator gave to each of his seven children an equal share of his residuary estate, and then provided that, in case any of his said children should die without leaving lawful issue, the share of such as might die without issue was to be divided ^mongst the survivors, share and share alike. £t was held that an estate, by necessary implication, was given to the issue of two children who died in their father’s lifetime. Vice-Chancellor Van Fleet said: “Ho bequest, it will be observed, is made1 to the survivors unless the first legatee died without leaving lawful issue. It is clear, then, the survivors do not take. The contingency on which they were to take has not happened. Where, then, did the testator intend the shares of such of his children as should die before distribution, leaving issue, should go. It is plain that he did not intend to die intestate as to any part of his estate. A devise or bequest may arise from implication. * * * To create a bequest in that way the implication on which it is founded must be a necessary one.” He then says: “I think it is quite apparent the testator intended that the issue of any of his children who should die before distribution should take that share of his residuary estate which his will gave to their parent.”

This case appears to me to go to the verge of the law, and to rest upon no other foundation than the assumption that testator did not intend to die intestate. It may be doubted whether the assumption can properly be made since the passage of the act which provides (Gen. Stat. p. 3763 § 34) that when a legatee, being a child or other descendant of the testator, shall die during the life of the testator, the legacy shall not lapse, but the estate bequested shall vest in such child or children in the same manner as if such legatee had survived the testator and had died intestate; but assuming, as I must assume here, that the decision is correct, the case in hand is easily distinguishable. The will gave Henry Howell an estate absolute and indefeasible, except on a contingency, which has not happened, and consequently the only ground upon which the vice-chancellor rested his decision, viz., the supposed necessity of averting intestac}' as to a portion of the estate, is here wanting. What is really sought, therefore, is not to obtain a construction which will avert intestacy, but one which will, by implication, first cut down the estate given, and then assign to Henry’s children a part of that which the will, in terms at least, gave to Henry himself.

In the Denise Case no life interest had been interposed, and the testator’s sons had died in their father’s lifetime. Their shares never vested in them. Under the law as it was before the enactment above mentioned testator would have died intestate, as to their shares of the residue, unless a gift by implication had been raised i«n their issue, and it was this consequence which it was thus sought to avert. Death without issue meant, necessarily, death in the lifetime of testator. In the case in hand it means death in the lifetime of the tenant for life. Salisbury v. Petty, 3 Hare 85, 93.

The decided cases are in harmony with the conclusion I have reached on what seems to be 'the natural and obvious meaning of the words themselves. Thus; in the case of Barnfield v. Wetton, 2 Bos. & P. 324, testator devised to his wife for life, and from and after her decease he gave all his copyhold messungos and premises unto his daughter, S. S., her heirs and assigns forever, “but if my said daughter shall happen to die leaving no child or children, lawful issue of her body, living at the time of her death,” then he gave the same to E. B., &c. Both the wife and S. S. survived testator. It was held that S.. S. dying without children, the -devise over to F. B. was good as an executory devise. Lord Eldon used this language: “Whether the testator intended that the children’s grandchildren should be benefited by this will or by some disposition to be made by S. S., if she had any children living at the time of her death, the estate being given to her in fee, she would have abundant power to provide both for children and grandchildren. Nothing, however, is given to them by this will. They are merely named in. Ihe description of the contingency in which the estate is to go over.” The applicability of this decision to the ease in hand lies here: Had the court held that the words “leaving no lawful issue of her body” gave an interest by implication to such issue, then S. S. would have taken an estate tail, and the executory devise over would have been void for remoteness.

In Dowling v. Dowling, L. R. 1 Ch. 612, a testator directed his residuary personal estate to bo'invested and the interest to be divided half yearly between his four sons, and at the decease of either without lawful issue such share to revert to the remainder then living or their child or children. The four sons survived testator, and it was held that each of them took an absolute interest in his share, subject to be divested in case of his dying without leaving issue, and that there was no gift by implication to the children of any who might die leaving issue. This case is stronger than the one in hand, for there it was plausibly argued that only the half yearly interest 'was given to the sons, and that this indicated nothing more than a limited benefit. Lord-Justice Turner said: “Surely the mere fact of a testator giving over property in case there are no children does not furnish any presumption on which this court can act in favor of his giving it to the children, if there are any, as against their parents. The testator might well suppose that they would be provided for from other sources, or' that the parent would-himself be able, by means of the gift, to provide for 'them.”

In re Rawlin's Trust, 45 Ch. Div. 304, there was a gift for life to H. B., “and after the decease of my said niece, II. R., she leaving no child or children,” then over. Lord-Justice. Cotton said: “It is said that those words imply a gift to the children. The law seems to be this: That where there is a life interest given to a person and then a gift over, if that person dies without leaving children, the gift over alone will not give the children any interest whatever.” Now, this is a much stronger case in favor of the children than the case of Dowling v. Dowling and that under consideration, for in these the gift to the parent was, in terms, absolute, and the' children might take through the parent; while in the ease last cited the gift to the parent being for life only, the children would not, in any way, enjoy the benefit of it, and yet it was held that even in a case thus circumstanced the children would not take by implication.

I am clearly of opinion, therefore, that the share of Henry Howell vested- in him at testator’s death, and that the contingency on which it was to be divided not having happened, it is now payable to his executors.

In the case of Elizabeth Mitchell the contingency happened on which her share was to go over. She survived her brother, Henry Howell, and died before her mother.- The question is who takes the proportionate part of her share which Henry would have taken had he survived her. I think it plain that it is Henry’s “heirs or legal representatives”—whoever may be designated by those terms. In Salisbury v. Petty, 3 Hare 86, I. P. devised real estate to A for life, remainder on the death of A to his children, as he should appoint, charged with a sum. of £3,000 apiece to B, O and D or to their respective issue. O and D died in the lifetime of A, leaving issue, and it was held that the issue took by substitution for their parents. Vice-Chancellor Wigram says: “The cases collected by Mr. Jarman clearly show that if a legacy be given payable at the- death of the testator, and, in case of the death of the legatee, to another party, there the court will construe the gift over, in the event of death, to mean in case of death in the lifetime of the testator; and, on the other hand, if the legacy is not payable immediately, but a life interest is given, and the testator saj's, in case of the death of the legatee it is to be given to someone else, then the words fin case of death’ are construed to mean in the lifetime of the tenant for life—that is to say, before the money became payable.” The only distinctions are that I interpose the words “in case of death,” for that must be the meaning of the word “or.” So here the word “or,” in the connection in which it is used, shows that the “heirs or legal representatives” are to take by way of substitution for Henry. This is the principle of the decision in Baldwin v. Taylor, 10 Stew. Eq. 78; S. C., 11 Stew. Eq. 637.

But the question remains, who are the persons designated by the words “heirs or legal representatives ?” By “heirs” are properly meant those upon whom the law casts the real estate immediately upon the death of the ancestor, and by “legal representatives” are meant executors and administrators. Wms. Ex. 1013. These words should be thus read, unless, from the context, it can be seen that' testator intended them to bear some other meaning. “In construing wills,” says Mr. Justice Van Syckel, in Chandler v. Thompson, 17 Dick. Ch. Rep. 723, “it must be presumed that words are used in their appropriate technical sense, * * * otherwise there will be no uniform rule of interpretation and no stable definition given to language which has a definite meaning in the law.” The will under consideration, although not drawn with entire accuracy, appears to have been the work of á person not unfamiliar with legal phraseology. The question is, does the context indicate that testator intended to use the words cfiieirs” and “legal representatives” in any other than their primary signification? As to the word “heirs,” I cannot find any such indication. The direction to convert realty into personalty is not imperative. The testator “authorizes and empowers” his executors to sell his land, but does not require them to do so. It is true that he wills that, after the death of his wife, “the principal sum” of his estate, with the accumulations, shall be divided among his children; but this indication of a purpose to reduce the whole estate to personalty and to divide it as such is more than met by his subsequent authorization to convert personalty into realty. This being so, there is no reason apparent on the face of the will why “heirs” should not receive its technical moaning. With respect to the words “legal representatives,” the case is, T think, different. The cases on this subject are luminously'reviewed by Vice-Chancellor Kindersley in In re Crawford’s Trust, 2 Drew. 230. The language there construed, was “to be equally divided between all my cousins germane now existing or their representatives,” and he gave to “representatives” its -proper meaning of executors or administrators.

In Stockdale v. Nicholson, L. R. 4 Eq. 359, Vice-Chancellor Malins again examined the cases before and subsequent to In re fírawfordfs Trust, and, after stating that he regarded it as settled that the words “personal representatives,” “legal personal representatives” and “legal representatives,” when applied to personal estate unaccompanied by explanatory or controlling words, were to b’e construed as being equivalent to “executors and administrators,” says that slight circumstances had been allowed to control the general effect of those words. In the case then before him it was held that the word “next” preceding the words “personal representatives” had such controlling effect, both because the word “next” had no connection with the character of executor or administrator and because it imported, in some form, consanguinity. In Baines v. Otley, 1 Myl. & K. 465, the gift was to M. K. for life, and in default of appointment “to and among such person and persons as would be the personal representatives.” Lord Langdale said that it had been properly observed that the words “to and amongst,” &c., were not applicable to executors or administrators. In King v. Cleaveland, 4 De G. & J. 477, the bequest was to certain nephews and nieces “or their personal representatives, share and share alike.” The words “share and share alike” were considered as indicating that the personal representatives were not to take in their representative character, but that some persons were to take beneficially, those persons being the next of kin; it having been, well settled, under a bequest to personal representatives, such representatives did not, in general, take beneficially. Daniel v. Dudley, 1 Phil. 1; Holloway v. Clarkson, 2 Hare 523; Hawk. Wills 107; Halsey v. Paterson, 10 Stew. Eq. 445, 449.

In Walker v. Marquis of Camden, 16 Sim. 329, the bequest was to testator’s nephew, “if he should then be living, and if not, then to his 'legal representative or representatives,” and Vice-Chancellor Shadwell held that, as testator had used the words “executors and administrators” five times in his' will, it would be singular to say that when he departs’from those words and used the term “legal representative or representatives” he meant “executors or administrators.” • A somewhat similar ease is Walter v. Makin, 6 Sim. 148. The reasoning in these last two cases is not very' convincing, and its correctness is doubted by Vice-Chancellor Kinclcrslcy'in the case before cited. ■

In Halsey v. Paterson, 10 Stew. Eq. 445, the bequest was immediately to the “legal representatives” of the husbandj and Chancellor Runyon held that, as there was nothing beyond the words themselves to'indicate the intention, those words must receive their proper'signification of “executors.” . He distinguished the case then before him from that of Brokaw v. Hudson, 12 C. E. Gr. 135, as being one in which’ there was an immediate, and not a substitutionary, gift. In the Brokaw Case Vice-Chancellor Van Fleet had held that where the substitutes of'tlie primary legatee were described by the word, “representatives” those would take who had the right to represent the primary legatee as next of kin under the statute of distributions.’ If this declaration of 'the vice-chancellor should be accepted in its generality, it would at once end the present controversy, for the gift under consideration is also substitiitio'náry. But, as is showhr in In re Crawford's Trust, supra, 'there is a clear distinction •between those cases in which, like 'the present, a life estate is interposed; and .those in which, like the case before VicoTChanecllor Van' Fleet, the bequest, though substitutionary, is' to' take effect, if at all,’ immediately upon testator’s death.

We must, then, examine the context. What' docs it show that testator meant'by “legal representatives'?” 'Outside'of the words “heirs or legal representatives,” I can find nothing to indicate a purpose or intention one way, or another. ' But the word “heirs” itself, in the connection in which it is used, possesses a peculiar significance. Its own meaning is plain, and unambiguous. It designates those upon whom the law casts the land in case the ancestor dies intestate. It cannot be questioned but that the heirs take the land immediately and beneficially. But if we give to the words “legal representatives” tlieir primary signification of executors or administrators, those representatives will take in llieir representative capacity. There is a strong presumption against their taking beneficially. This is a well-settled rule, as shown by the authorities heretofore cited. They must, if executors, after paying debts, distribute the residue according to- the son’s will; or, if administrators, according to the statute of distributions. Now, if this substitutionary gift lie to the legal representatives in this sense, we must suppose that testator intended that his land should go without reference to his son’s will, if he left any, and that his personal property should pass under that will, or, at least, as a part of his son’s estate; that his land should go to his son’s heirs free from any obligation to answer his son’s debts, but that his personal property should be subjected to those debts. This is not a reasonable view to .take of testator’s meaning. He could hardly have intended that the realty should go in one way and the personalty in another—that the one should go according to his own will and the other according to his son’s. It would seem reasonably clear that as he intended to make a beneficial gift of the land to his son’s heirs, so he intended to make a beneficial gift of the personal property to a class of persons which he denominates “legal representatives.” But the class thus denominated is either “executors and administrators” or “next of kin.” Here it must bo next of kin, for it is highly improbable that he intended a personal benefit to persons in whom he had not the slightest interest. No violence is done to the words used, for next of kin do, in a sense, represent the testator very much as heirs represent the ancestor. All that is decided is that, having reference to the context, it appears that testator used those words in their secondary, and not in their primary, signification.

I think, therefore, that the land goes to the heirs and the personalty to the. next of kin.

If counsel think there is any doubt about who are the next of kin entitled to lake, and the question is material, I will hear argument upon it.


author: Grey, Y. C.

text:
    Sadie S. Howell v. Clinton G. Howell.
    [Filed December 24th, 1900.]
    A wife is a petitioner for a divorce because of alleged desertion. She testifies that her relations with her husband, at the time he went away, had been pleasant and agreeable ; another member of the household testifies to the same effect. There is no proof that before h.a left there had been any disturbance of their connubial relations. The husband was in debt. This being the situation of the parties, the husband went away without previously letting his wife know of his purpose to leave. He had not much money and took her ring. On the day he left he wrote to her father stating that he was in debt and was going away; that it was no use to trace him, and asked the father to take the petitioner to his house and care for her. He did nothing to support his wife thereafter, obviously because he had no money. He corresponded with her, she sending him money. His letters showed no aversion to his wife or purpose to abandon her. The last one was couched in affectionate terms, and was written less than ten months next before the wife filed her petition, praying for a divorce because of alleged desertion for more than two years.—Held, the evidence does not show either a willful, a continuous or an obstinate desertion for two years before the filing of the bill, nor does it exhibit any intent to desert, in the sense that the defendant abandoned' his wife.
    On petition for divorce. On master’s report ex parte.

      Mr. George M. 'Shipman, for the petitioner.
   Grey, Y. C.

The petitioner seeks a divorce on the ground of desertion. The parties were married on June 2d, 1897, and after their marriage resided together, keeping house, until October 16th, 1897. The wife testified that their relations “had before then been pleasant and agreeable; no disturbance or anything of that kind between us.” The husband’s sister, who lived with them after their marriage until September, 1897, testified that “their relations toward eacli other seemed to be loving.” On October 16th, 1897, the husband went away, having told his wife that he was going to a neighboring village to post books for a butcher, as he had before done. His wife says that he had not much money, and that he took her ring. Oh the same day that the husband left he wrote to his wife’s father, stating that he was in debt, and was going away; that it was no use in trying to' trace him, as he would leave no trace,; that the father should come and get the wife, and take care of her. She says she “don’t remember what he said about coming back, but that he has never been back.” This letter is not produced, and the contents above stated are narrated by the wife and her father. The latter testifies that the letter stated that the husband did not know as ho would come back, nor where he would go, and that he wrote that he was in debt and could not pajr. The father states that he burned this letter in clearing up his desk. ■ That the husband was in debt appears to be undisputed, as the wife has since paid some of his debts. She has aiso sent him money since he went away. After that, on June 30th, 1899, he wrote to her from Chicago. She received this letter, and it is produced in evidence. Here is a copy:

“Chicago, June 30tli, 1899.
“My Deaií AVIee—You will see by this that I am in Chicago now.' I left the hospital Thursday noon. I had been there for 21 days for my kidneys and was getting no better, so I left with the intentions of coming right on to Hew York City, which I should have done had I not met Dr. Munyon, of Chicago, on the train between here and St. Louis. In conversation- with him I told him my trouble'and he said I was not half as bad as the Drs. at the hospital said I was, and had several years to live yet with a little treatment. . I-Ie advised me to stop in Chicago and try the Munyon- remedios, and I have done so, and after 48 hours have had more relief than I had all the time in the hospital. I enclose an index of the diseases they cure and mark the three I am now taking by a figure 1, and the ones I have to take next by a figure 2. T suppose the letter' you sent me in answer to the one I sent you will be returned to Vienna, as I told them to remail it to me there. Will you send it back love with your answer to this when you write me again? I will keep you posted as to my progress.
“I am going to work, after' a ten days’ rest, in the office of the Drs. in the Atwood building. I do -not get but $5 per week and board, but the Dr., advised me to take it for a .couple of months so I could be under their supervision- for a time. That will just clear me $15 per month. Better than nothing. Perhaps I. may be given something better then if I suit. Don’t forget to send me back the letter, love, as I don’t want to lose any more communications from you.
“The weather is delightful here, cool nights and not too warm during the day. ,
‘¿Remember me to sister and the other folks and don’t forget your own husband.
“Clinton G. Howell,
.“148 So. Clark St.,
“C/ New Era Hotel. “Chicago, 111.”

Since the husband left in October, 1897, he has done nothing to support the wife. Nothing has been heard from him since his letter of June 30th, 1899.

The Divorce act prescribes that divorces may be decreed for willful, continued and obstinate desertion for the term of two years.

The master to whom the cause was referred has reported that the evidence, in his opinion, justifies a decree for divorce on the ground of desertion. In stating the cause for the desertion, the master reports that he is of opinion that the husband had become indebted for part of the expenses of his marriage, and was probably ashamed to remain in a community where it would be known he had married on borrowed money, which he was unable to pay. The master relates that he had come to this conclusion from the testimony of the wife. The master further reports that, in his opinion, the correspondence does not taire from the desertion the quality of willfulness, continuity or obstinacy, because the defendant “seems to have announced” to the petitioner his determination not to return until he could pay his debts, which the master holds is no excuse'for his desertion of his wife. A careful examination of the evidence.shows no such announcement by the husband to the wife. The proofs do not support any inference'that the husband seemed to make such an announcement. There is, in truth, no evidence of desertion in the sense that when the defendant went away, or subsequently, he intended 'to abandon his wife.

The master appears to have assumed that a willful, continued and obstinate separation by the act of the husband, for an insufficient cause, is, when accompanied by non-support, a desertion, even if there be no proof that, in going away from the wife, the husband had a will to abandon her. This has not been the .construction of our statute. Mere absence is not desertion. Taylor v. Taylor, 1 Stew. Eq. 207; Rogers v. Rogers, 3 C. E. Gr. 446. The deserting party must forsake the other willfully, «intending to abandon, and must obstinately continue in such a state of separation for the period of two }rears. Cass v. Cass, 4 Stew. Eq. 626. If the evidence shows the continued existence and manifestation of connubial feeling on the part of the absent one within two years before the bill is filed, it cannot be said that there was a willful and continued desertion of the other party during the'period of those two years. Hor is non-support sufficient to establish -desertion. Cook v. Cook, 2 Beas. 264. Hor are both separation and non-support sufficient, unless the proof shows, also> a willful desertion. Bourquin v. Bourquin, 6 Stew. Eq. 7. Many eases happen daily where the necessities of life compel the husband, in his judgment, to separate from his wife, and also deprive him of the means of supporting her. If he, in such case, continues to hold her in affectionate regard, which he expresses to her, he cannot be said to have deserted her, even if he is mistaken in his judgment that he is compelled to absent himself. If he remain absent under a sense of shame, unaccompanied by an intent to abandon her, his absence is not a desertion.

The evidence in this case shows separation and non-support, but none of it indicates desertion. There is no proof of any purpose on the part of the husband to abandon his wife. On the contrary, the evidence shows that the husband, at the time he went away, was upon affectionate terms with his wife. There is no proof that he went because he wished to leave his wife, while there is positive proof that he went because he was in debt. His loving care for her is shown by the letter which he wrote to her father, at once on his departure, to come and take her home. A correspondence ensued between the husband and the wife,’the details of which are proven only to the extent that the wife, who is now applying for a divorce, chooses to disclose them. So far as the testimony which the wife submits malees known the contents of the husband’s letters, none of them showed any purpose on the part of the husband to abandon the wife. She certainty did not believe that there was any such purpose on his part, for she sent money to him. His continued absence is justly referable to his poverty, not to a purpose to desert his wife. The one letter produced, written by the absent husband to the wife, far from showing a desertion, contains unquestionable evidences of the husband’s continued affection for the wife, of his belief that she responds to his feeling, and that she is interested in his welfare, and of his expectation that she will (in accordance with his wish to receive her letters) forward to him the one which she had previously written to him, but which had been returned to her by the postal authorities.

This undoubted expression of the defendant’s kindly feeling for his wife in June, 1899, is wholly irreconcilable with the existence, at that time, of a willful and continued purpose on his part to’ desert her.

The bill was filed on April 3d, 1900. The term of desertion must have, at least, begun on April 3d, 1898, and must have been continued for two years, while, as stated, the husband’s letter shows that in June, 1899, within the two years, he deemed himself to be upon affectionate terms with the petitioner.

The evidence, in my view, fails to show any willful, continued or obstinate desertion by the husband of the wife. On the contrary, it indicates that in June, 1899, his feeling toward her was wholly inconsistent with a continued intent at that time to abandon her.

The above examination of the evidence shows that there was no desertion for the term of two years before the petition was filed. The petition should be dismissed.


author: Grey, V. C.

text:
    Samuel H. Richards v. William B. Knight.
    [Filed October 31st, 1902.]
    1. Specific performance of a contract to purchase realty will not be decreed against the purchaser if there is such doubt as to the seller’s ability to convey a good title that the purchaser, if compelled to perform, would be subjected to the hazard of litigation.
    2. A doubt precluding specific performance exists if the seller’s title depends on the determination of a legal question not settled by previous decisions, or concerning which there are dicta of weight indicating that courts might differ as to its determination.
    3. In a suit by the vendor in a contract for the sale of realty, to compel specific performance by the vendee who refuses to perform on the ground that there is doubt as to the vendor’s ability to convey a good title, the court, if the doubt arises in ascertaining the construction of some ill-expressed instrument, will not determine the legal effect thereof and compel the purchaser to take the title:
    On bill for specific performance. On motion to strike out bill.
    The bill of complaint is filed to compel the defendant specifically to perform an agreement alleged to have been entered into by him for the purchase from the complainant of a farm situate in Logan township, Gloucester county, to be conveyed by a good title, clear of all encumbrance.
    The bill alleges that the complainant tendered to the defendant a general warranty deed, which was efficient to convey a fee-simple estate in the farm in question, and that the defendant refused to accept the conveyance and to perform his contract upon the sole ground that the complainant and the complainant’s mother, who joined in the deed, could not make a good title to the farm, because of the provisions of the will of Samuel Richards, under which the complainant received the title.

      The bill of complaint sets forth the will of Samuel Richards in extenso, in these words:
    “I, Samuel Richards, of the township of Logan, in the county of Gloucester and State of New Jersey, being of sound mind, memory and understanding, do make and publish this my last will and testament in manner following, that is to say:

      “First. It is my will and I do order that all my just debts and funeral expenses be duly paid and satisfied as soon as conveniently can be after my decease.

      “Second. I give and bequeath all of my personal property and devise all of my real estate to my beloved wife, Sarah A. Richards, for and during her natural life or while she remains my widow.

      “Third. After the decease of my said wife, or if she marries again, then after her marriage, it is my will and I do order that all of my said property, both real and personal (or what remains thereof), be given to my son, Samuel Horace Richards.

      “Fourth. In case that my son, Samuel Horace Richards, shall depart this life before the decease of my said wife without leaving any lawful issue, then it is my will and I do order that all of my property, of whatever kind that remains at her decease, shall be divided equally among my legal heirs.

      “Lastly. I hereby appoint my beloved wife, Sarah A. Richards, executor of this my last will and testament.
    “In testimony whereof I have hereunto set my hand and seal this twelfth day of August, in the. year of our Lord one thousand eight hundred and eighty-two.
    “Samuel Richakds [seal]:
    “Signed, sealed, published and declared by the said Samuel Richards to be his last will and testament, in the presence of us who were present at the same time and subscribed our names as witnesses in the presence of the testator.
    “Benjamin IT. M’Collestek,
    “James H. Hewes.”
    The will was proven November 26th, 1894. The bill alleges that the testator left no more than enough personal property to pay his debes and funeral ezpenses. It further appears by the bill that Samuel II. Richards, son of the testator, is married and has lawful issue living.
    The defendant, by notice under rule 213, moves to strike out the whole bill. The parties have submitted the matter upon briefs.

      Mr. Charles A. Wolverton, for'the complainant.

      Mr. William B. Knight, defendant pro se.

   Grey, V. C.

The defendant’s motion is to strike out the whole bill, under rule 213, and is, in substance, a demurrer to tire equity of the bill, upon the ground that, admitting all its allegations, the complainant exhibits no right to the only relief sought, viz., a decree that the defendant shall accept a conveyance of the farm in question from the complainant and his mother. The defendant contends that the statements in the bill of the derivation of their title show that they have no power to convey a good title— that is, an indefeasible estate in fee-simple.

The single object of this bill is to compel the defendant to accept a conveyance of the farm in question in performance of his contract to buy it. This court will not decree specific performance if there be, as to questions of fact, such doubt as to the complainant’s ability to convey a good title that the purchaser, if compelled to perform, would 'be subjected to the hazard of litigation. Lippincott v. Wikoff, 9 Dick. Ch. Rep. 114.

If the doubt raised depends only upon a question involving the application of general principles of law, it is the practice of courts of equity to decide the point of law in the suit for specific performance. In such cases the doctrine is that specific performance should not be decreed if there is reasonable ground for saying that the question is not settled by previous decisions, or if theré are dicta of weight which indicate that courts might differ as to the determination of the point involved. Lippincott v. Wikoff, 9 Dick. Ch. Rep. 120. One of the categories in which the courts decline to compel specific performance is where the doubt as to the vendor’s power to carry a good title arises in ascertaining tire true construction and legal operation of some ill-expressed and inartificial instrument. Alexander v. Mills, 6 Ch. App. 131.

The complainant insists that there are no doubtful questions of fact in this case, and that the bill of complaint shows, as a matter of law, that the deed proffered conveys a good title for several reasons.

First. Because Sarah A. Richards (the widow), by the true construction of the will, has an absolute power of sale, which will convey a fee-simple. Ilis argument is that such a power, though not expressed in the words of the will, must be implied from the testator’s devise to Sarah when considered with the words of the devise over after her death. He gives Sarah all his personal property and all his real estate during her life or widowhood, and after her decease or marriage orders that all of both'real and personal (or what remains thereof) be given to his son, Samuel H. Richards, the complainant.

The complainant contends that, by the words “what remains thereof ” used by the testator in the third clause, and similar words in the fourth clause, the testator has indicated án intention that the widow should have an unlimited power of disposal of both the real and personal property; that it is only what remains after such disposal by her that comes to the son, or to the legal heirs of the testator. He cites the case of Rodenfels v. Schumann, 18 Stew. Eq. 387, where Chancellor McGill declared that the words “what shall remain,” appearing in the will there construed, did not refer merely to the residue of the personal property, which was consumable by use, but should, in that case, bear a broader meaning, and include in the residue intended by the testator the real estate as well, and thus imply an intent to give to the widow a power of alienation of the whole estate.

An examination of thve Rosenfels judgment will show that the whole discussion by the chancellor was based upon peculiar circumstances of that case. In that will the quantity of interest given to the widow was indeterminate, and the question under consideration was the extent of her estate. On the face of that will words were used which indicate the testator’s purpose that both the real and personal should be devoted to the sole use and benefit of his wife. He evidently intended that she should have power to consume all his estate, but he so phrased his mil that he gave “what remained” to his brothers and sisters. The chancellor held that such a gift passed a fee to the wife, and that her deed cut off the limitation over.

In the case presently under consideration the extent of the estate given to the wife is expressly defined, by the very words of the will, to be but a life estate, or one durante viduitate. There are no words expressly giving any power of disposal to her. If any such authority is found in the will, it must be raised by implication. If so raised, it must necessarily (in view of the fact that the testator has in no way disposed of the proceeds from any disposition made by the wife) give to the wife an absolute fee-simple estate in the whole property.

The phrase “what remains thereof,” as used in the third clause of the will, has 'been so placed by the testator in 'its relations to the word “personal” that it may fairly be construed to refer only to the personal property. His words are: “I order that all of my said property, both real and personal (or what remains thereof), be given to my son,” &c. In the preceding gift to the wife the testator places his gift of the personal first, but in the gift to the son he changes its order and places it last, so that it is immediately in connection with the words “what remains thereof.”

The phrase “what remains,” &c., is somewhat differently used in the fourth clause, for it is there directed: “I do order that all of my property of whatever hind that remains at her decease shall,” &c. The complainant insists that this must be construed to- raise an implication giving to the wife an absolute power to sell the real estate in fee.

The testator’s estate consisted of both real and personal property. He expressly limited the wife’s' interest to an estate for life. Personal property would naturally be worn out or expended in its use, and the words of disposal were, in all probability, intended to apply to that part of the gift. Downey v. Borden, 7 Vr. 469 (Court of Errors and Appeals). The expression, in the fourth clause, “of whatever kind,” &c., if it suggests an inference that the testator intended his wife to have a power to dispose of 'both real and personal, without accountability for the proceeds, thus giving her an absolute estate, is repugnant to the express words whereby the testator limits the wife’s interest to an estate for life, and to his evident purpose that, on the termination of her estate, the property should go to his son, if living, or if not, -to the testator’s heirs-at-law.

The words of a will, where they have a clear and definite meaning, should be given their full natural effect. If, from other words, an implication may be drawn which would be repugnant to the expressed intent of the testator, and they cannot be reconciled, then the expressed intent of the testator should prevail, and the inference which would defeat his purpose ought not to be drawn.

In the present case the raising of a power of absolute disposal in the wife would necessarily, in the absence of any expression in the will directing what should be done with the proceeds in any conversion of the property under the power, give to her an absolute interest in the whole estate.

It -would, by an implication—an inference drawn by the court—nullify the express words of the will limiting her interest to a life estate.

This phase of this case is, in my view, controlled by the above-cited decision (Downey v. Borden). In that case there was a gift to a widow of “one-third of all my estate that may remain at my death for to dispose of as she may see proper.” The gift included personal property as well as real estate. The court of errors held that the words “that may remain at my death” naturally refer to such personal estate, citing cases. This Downey Case is referred to by the chancellor in the Rodenfels decision as the leading authority on the point in question. Iiis discussion of the Rodenfels Case is directed to show wherein the circumstances of that case differ from the Downey Case, and make the latter judgment inapplicable.

The construction which refers implied powers of sale in such cases solely to personal property, where that interpretation can be given, seems to be accepted by the courts, whether the different kinds of property are separately mentioned or grouped together by some such general words as “all my estate.” In the Downey Gase the gift under discussion was “to niy beloved wife one-third of all my estate that may remain at tire time of her death,” and, in fact, included both real and personal estate. In Naundorf v. Schumann, 14 Stew. Eq. 15, decided by Chancellor Runyan, the words of gift were “all my. property, both real and• personal,” to the widow, and, after her death, “what shall-remain to be disposed of in manner following,” &c. In both of these cases the court refused to- raise an implied power in the widow to sell the real estate, holding that the inference of a power of disposal to be drawn from the use of the phrase “what shall remain,” -&c., was satisfied by applying it only to the personal property. The same disinclination to imply powers of disposition where the words of a will do not clearly manifest such a purpose on the part of the testator, appears in Wilson v. Wilson, 1 Dick. Ch. Rep. 324, 325.

In view of the fact that, in the present case, the gift to the wife expressly limits her interest, by apt words, to a life or lesser estate, and that no power of sale is, in terms, -given to her, the phrases “what remains thereof,” in the third clause, and “all of my property of whatever kind that may remain,” in the fourth clause, should not be construed as to give to the wife an absolute power of sale over the real estate.

The second ground upon which the complainant insists that he is able to' convey a good title is that even if Sarah has not a power of sale of the farm, still the title conveyed by the complainant’s own deed would be good.

The complainant’s brief claims that he “takes, under the will, a vested estate in fee, subject to an executory devise over in case of his dying without issue before his mother.”

This construction of the devise to the complainant, even if it be conceded to be correct (and it will be hereinafter discussed), cannot be held to: show in .the complainant such a title as a court will compel a purchaser to accept. An estate which, though vested, is subject to be defeated by the happening of events of an uncertain and uncontrollable nature, is not such a good and merchantable title as should be forced upon a purchaser. This would give the purchase-money, the equivalent of an indefeasible fee-simple estate, to the vendor, and force the vendee <to accept therefor the conveyance of an estate which, though vested, might be taken from him by subsequent circumstances which could neither be controlled nor prevented.

The complainant, however, contends that, under the terms of the will, “subject to the life estate of the widow, all other estates are united in the complainant.” He claims to be the holder of a vested fee, subject -to an executory devise over to the testator’s heirs, and, also, to be that heir of the testator in whose favor the executory devise is limited; that his conveyance will, therefore, pass both the vested fee and the estate limited by executory devise to which the fee is subject. ■

This contention involves an inquiry into the nature of the estates given over by this will. It is manifestly drawn so that it is difficult to declare with certainty what the intent of the testator really was. The gift of an estate for life, or durante viduiiake, to the wife is definitely expressed.

Tire devise in favor of the son is in the third clause, in the words above quoted. The first point to be considered is whether this devise passed to the son an interest which vésted on the death of the testator. The words used by the testator are not those of present gift. This might not be of conclusive importance if, from the whole will, it appeared that the testator intended presently to give his estate in fee to his son, subject to a life estate in his wife, and that the words postponing the gift to the son were simply intended to let in the wife’s life estate.

This is not the effect of the testator’s expression of his purpose. He directs that, after his wife’s death or marriage, the estate should be given to his son. Neither of these events has yet happened.

That the testator did not intend the son to have his estate at all events, is plainly shown by the fourth clause of his will. He there declares that if the son should depart this life before the decease of his (testator’s) wife, without leaving any lawful issue, then the estate should be divided among his (the testator’s) legal heirs. This shows that, at the period named—i, e., the death of his wife—the testator contemplated two possible dispositions of his,estate—one to his son, if he were then living; the other to his (the testator’s) heirs, if the son had then died without issue.

The heirs to whom the testator meant this limitation over to go could not have included his son (the complainant), because it was only at and upon the son’s predeceasing his mother, without leaving issue, that the testator’s heirs were to take. The son must be dead in order that the testator’s heirs may take. If they thus take, it will be direct from the testator, under his devise, and not in any way through the son. The son’s covenant of warranty would, therefore, not affect the title of the testator’s heirs, for they would derive their title, not from the son by descent, but directly from tire testator by devise. The warranty would have no estate of the warrantor- to which to attach. It is impossible to know, until the death of the- life tenant, who may ultimately take the fee.

A varying phase of the effect of this will might come about if the. widow should marry while the son is living. Her estate would then terminate and his would begin. The fourth clause of the will takes no cognizance of this possibility. It simply declares that if the son shall predecease the wife, without leaving issue, the estate shall be divided among the testator’s heirs. To give effect to the whole will the construction should probably be that, if the wife marries, the estate goes to the son, in fee, subject to be defeated, in favor of testator’s heirs, by the son’s dying, without issue, in the lifetime of the wife.

None of the constructions above suggested of this inaptly-drawn will is so free from doubt that they should be made the basis of a decree compelling a purchaser to- take the title of the devisees at the present time. The case is, I think, one of that class referred to by Lord-Justice James, in Alexander v. Mills, ubi supra, as an exception, when he declared that where difficultjr and doubt arise in ascertaining the true construction and legal operation of some ill-expressed and inartificial instrument, the court, on application for specific performance, will not determine the legal effect of the instrument and compel a purchaser to take the title.

The uncertainties of the construction of the will upon which the complainant’s title in this case depends are such that the acceptance of a conveyance of that title ought not to- be compelled.

A decree will be advised dismissing the bill of complaint.