text:
    John Livesey v. Samuel B. Jones, sole surviving executor &c. of Henry Livesey, deceased, et al.
    A bequest of the residue of testator’s estate to humanity’s friend, * * * B., to use and expend the same for the promotion of the religious, moral and social welfare of the people in any locality, whenever and wherever he may think most needful and necessary,” since it includes objects not charitable, must fail for indefiniteness.
    On bill.
    For the complainant, Mr. Samuel A. Besson.

    For the heirs, Mr. Abel I. Smith.

    For Dr. Chadwick, Mr. Isaac S. Taylor and Mr. Cowen,

   Stevens, V. C.

I think the trust under consideration in this case must fail, because it includes objects not charitable, and is therefore so general and indefinite that the court cannot see to its execution. The testator gives the residue of his estate to his friend and humanity’s friend, the Rev. H. W. B.,

“ to use and expend the same for the promotion of the religious, moral and social welfare of the people in any locality, whenever and wherever he may think most needful and necessary.”

Now, in the first place, it seems to be plain that the words “religious, moral and social” are not used conjunctively in such manner that every object to which the bequest may be applied must conduce at one and the same time to the advancement of religion and morality and to the social welfare of the people. To so hold would be to make the charity a religious one, contrary to the plain intention of the testator. It would be, moreover, in direct conflict with the decision in Williams v. Kershaw, 5 Cl. & F. 111, where the devise was to “such benevolent, charitable and religious purposes as the executors should in their discretion think most advantageous and beneficial,” and where it was held that this- language authorized the application of the bequest to other than strictly charitable purposes. This case I regard as authoritative, because Chief-Justice Beasley, in Norris v. Thomson, 5 C. E. Gr. 523, said that it rested on a proper foundation, and reiterated his opinion in DeCamp v. Dobbins, 4 Stew. Eq. 695, in the following vigorous language: “Nor can I go with that process of reasoning that concludes that when the word ‘benevolent5 is conjoined to the word ‘charitable,5 the two words become identical in meaning, as that implies that one of the terms is to be dispensed with or that the lesser term swallows up the larger. * * * In such a naked case as I have supposed, for the court to strike out the broader of the descriptive terms may indeed uphold, now and then, a testamentary limitation, but at the same time, one of the most important canons that the law has established for the construction of wriiten instruments is impaired.”

I must therefore assume that any use of the property which, in the estimation of Dr. Bellows, would promote either the religious welfare of the people, or the moral welfare of the peo-' pie, or the social welfare of the people, would be fully justified by the language of the will.

That a trust to promote the religious welfare of the people is charitable is admitted. Whether a trust to promote their moral welfare is so, I need not consider. I am clear that the trust to promote the social welfare of the people,in the manner declared in this will, is not. I think it may be said, without much fear of contradiction, that there are many ways of advancing the social welfare of the people which have nothing to do with charity. Money given to companies to build railways or canals, water or gas-works, where none exist; money given to companies or individuals to build steamship lines or otherwise to advance commerce or agriculture, would be money given to promote the social welfare of the people, certainly quite as much as money given to hospitals and almshouses, but would not be given for charitable purposes.

Kendall v. Granger, 5 Beav. 300, is a case directly in point. The gift there was “ for the relief of domestic distress, assisting indigent but deserving individuals or encouraging undertakings of general utility,” and of this gift Lord Langdale said that if the sentence had ended with “ individuals,” it would have been a good charitable purpose, but he felt himself bound by the decisions to hold that the words “general utility” were large enough to include purposes which were not charitable and the bequest was therefore void.

In Nightingale v. Goulburn, 5 Hare 489, the bequest was to “ the queen’s chancellor of the exchequer for the time being, to be by him appropriated to the benefit and advantage of my beloved country, Great. Britain,” and it was held to be a valid charitable bequest. This testamentary disposition stands in strong contrast to that under consideration. Had Mr. Livesey given the residue of his estate to the people of New Jersey for public purposes, it would, on the authority of the case just cited, have been good. It would have fallen within that part of Mr. Justice Gray’s definition of charity — a definition which is no more than a generalization of the instances contained in the statute of JfS Eliz. — in which he says: “A charity, in a legal sense, may be defined as a gift to be applied consistently with existing laws for the benefit of an indefinite number of persons * * * by erecting or maintaining public buildings or works or otherwise lessening the burdens of government.” In the case in hand, however, there is no intention to confine the gift to the people of the state, regarded either as a sovereign entity or as individuals. The donee is “humanity’s friend,” the Rev. Dr. Bellows. His place of residence is stated to be New York. The gift is to the people — that is, presumably, the people who go to make up humanity. The gift is to be expended in any locality whenever and wherever he — that is, “humanity’s friend ” — may think most needful and necessary. To restrict such a gift to the limits of the State of New Jersey, for the public purposes of the state, would be an utter perversion of the testator’s expressed purpose.

In Owens v. Missionary Society, J¡, Kern. Jfl9, Chief-Justice Denio said, in relation to a gift to a society whose object was “to diffuse more generally the blessings of education, civilization and Christianity throughout the United States and elsewhere,” “ the advancement of civilization, generally, is not classed among charities in the statute [Eliz.], and I have not been able to find an adjudged case in which it has been held to fall within the legal notion of charity.”

Mr. Perry, in his work on Trusts § 710, gives many instances of bequests held to be not charitable, among them a bequest creating a trust for the political restoration of the Jews; to secure the passage of laws granting women the right to vote and hold office; to establish a school which was not a free school. I do not see why any one of these objects would not come within the fair meaning of the words of the bequest we are considering. The trust here attempted to be created must therefore fail because too general and indefinite, and by the course of decision in this state, it must fail altogether.

Counsel also raised the question whether the trust did not fail by reason of the fact that Dr. Bellows died after the testator but before the life tenant. The contention is that the trust was so personal to Dr. Bellows that the court would not appoint any other person of its own selection to execute it. As I find that the trust has failed altogether, it is unnecessary to consider this question.


source: Caselaw Access Project

author: Grey, V. C.

license: Public Domain

text:
    Elizabeth A. Lippincott et al. v. William Bridgewater.
    1. A receipt which does not so identify the lot of land to be conveyed that it can be distinguished from other lots, and contains no statement by which the intention of the parties with respect to the land can be ascertained, is not such a memorandum in writing of a contract for sale of lands as will satisfy the statute of frauds.
    2. Equity will not decree specific performance of a parol contract for sale of lands solely because a portion of the purchase-money has been paid, which may be recovered, with interest, in an action at law.
    3. There must be some additional circumstance to entitle a party seeking relief to specific performance, whereby he has been placed in a situation of loss or injury for which he can receive at law no adequate compensation, or which would make the non-performance of the contract a fraud upon him.
    On bill for specific performance.

      Mr. James M. E. Hildreth, for the complainants.

      Mr. Eugene C. Cole and Mr. Samuel W. Beldon, for the defendant.
   Grey, V. C.

This bill is filed by the complainant Elizabeth A. Lippincott and her husband, against William Bridgewater, praying for the specific performance of a contract alleged to have been made between the parties for the conveyance of a lot of laud situate in the borough of Ocean City, Cape May county.

The complainant, on the 7th day of April, 1896, had a conversation with the defendant touching the purchase of the lot in question, and paid him $5, for which she received a receipt in the words and figures as follows:

“April 7th, 1896.
“Received from Elizabeth A. Lippincott 5 dollars on account of lot 544 Asbury avenue.
“W. Bridgewater.’

In addition to the foregoing receipt the parties made further agreement by parol as to the amount of money which was to be paid for the lot, and the time when the payment was to be made, and by this parol portion of the contract they seem to have agreed that the payment receipted for was made on account of the purchase-money of a conveyance of lot 544, section D, on Asbury avenue, Ocean City, which, it was intended, should be made by Bridgewater to the complainant. None of these latter incidents of the contract were in writing, nor does any of the subsequent correspondence written by Bridgewater, the defendant, in any way aid this deficiency; so that the only memorandum in writing, signed by the party to be charged therewith, to satisfy the terms of the statute of frauds, is the receipt above quoted in full. This receipt is so lacking in several of the necessary elementary incidents of a contract for the sale and. purchase of lands, that it must be held to fail entirely to satisfy the requirements of the statute.

It does not specify what land is to be conveyed, as it is shown that there are three pieces of land which can be truthfully described as “ lot 544 Asbury avenue,” and the memorandum does not state any undertaking by the signer to convey, nor does anything appear to show for what the money was paid, whether for rent, or for a mortgage to be made, or for a lease, or for a conveyance of the fee. The intentions of the parties in dealing with the land are not indicated by the writing.

These defects have been decided to be fatally at variance with the requirements of the statnte of frauds. Rev. p. 1603 § 5 (1896); Carr v. Passaic Land and Improvement Co., 4 C. E. Gr. 424; S. C., 7 C. E. Gr. 85; Welsh v. Bayaud, 6 C. E. Gr. 186; Force v. Dutcher, 3 C. E. Gr. 404.

So far as the complainant rests her case upon this memorandum in writing, it is utterly insufficient, in my judgment, so to satisfy the requirements of the statute of frauds as to justify a decree.

The complainant further claims, however, that she is entitled to a decree because she. paid $5' on account of the purchase-money for the conveyance of lot No. 544 Asbury avenue, which, by parol evidence, she proves is in section D of Ocean City lots, and which, also by parol, she proves the defendant agreed to convey to her for the sum of $500. This parol contract, she insists, she has a right to have enforced, solely because of the payment by her and the acceptance by Bridgewater of the payment of' $5 on account, on the ground that this was such a part performance that a court of equity will oblige the defendant completely to perform the contract.

Payment of the contract price by the purchaser is not of itself' sufficient part performance to take the case out of the statute for the reason that the money can be recovered back by the proposed vendee and interest by way of damages for its detention, which is an adequate remedy, obtainable in a court of law. Brown v. Brown, 6 Stew. Eq. 660; Campbell v. Campbell, 3 Stock. 270; Cole v. Potts, 2 Stock. 69; Story Eq. Jur. §§ 750, 751.

In the case in hand no step whatever has been taken by the parties or by either of them in the performance of the contract, save the payment of $5 above alluded to, on one side, and the receipt therefor, wholly insufficient as a contract of sale, given by the other side. No further money has been paid, nor has it been shown that anything has been done in the execution of the contract which has placed the complainant in any situation of loss or injury for which she may not be fully compensated by a recovery in ah action at law, or would make the non-performance of the contract a fraud upon her.

The testimony does not satisfy me that the complainant has even observed the terms of the parol agreement as to the time of performance. The weight of the evidence seems to be that she was notified to comply within a period of time which was, under the circumstances, reasonable, even if the parol agreement did not make time of the essence of the contract, and that she failed to perform within the time notified.

Under the circumstances I think I am bound to refuse a decree for a specific performance of either the written or the alleged parol agreement upon any ground.

I will, therefore, advise that the bill be dismissed, with costs.


author: Pitney, V. C.

text:
    William T. Meredith et al. v. New Jersey Zinc and Iron Company, The Lehigh Zinc and Iron Company, The Passaic Zinc Company, The Hardyston Mining Company et al.
    1. A preliminary order' will not be granted to restrain a corporation, organized for mining and reducing ores owned by it within the state, from entering •into a Contract for the purchase of similar mines lying outside the state, since the purchase may be made and the contract carried out, and the corporation» still be at liberty to discontinue the operation of work outside the state, if it be a breach of the original contract between the stockholders.
    2. Where a mining and manufacturing corporation was organized under the Corporation act of 1875, which provides (section 55) for the purchase of property with stock, such provision became a part of the contract between the stockholders; and where new stock is issued for the purchase of mines, which will become a part of the common property, from which all stockholders will receive the same benefit, original holders cannot insist that the new stock shall' be issued to them in the proportion their holdings bear to the whole amount of stock before the increase.
    3. In case the corporation deprives a stockholder of his rights in this behalf, it is liable to an action at law for damages; and where it is of sufficient responsibility to answer to such action, the stockholder is not entitled to-equitable relief.

      4. Rival corporations became interested in the same mineral deposit, on the-supposition that two different ores, found in. the same veins, could be separated, the two having been sold, one each, to the two corporations. To define and separate the two ores, in practice, in the earth was found practicably impossible. Disputes arose as to whether the various veins uncovered were one ore- or the other, and prolonged and expensive litigation followed, extending over many years. Finding that the issue was incapable of satisfactory judicial determination, a contract was made whereby the rival interests were to be consolidated, but as a condition precedent it involved the purchase of other mines and plants in different parts of the state and country. The corporations exercised no public franchise, were simply the owners of a species of property which, in its natural state, is of no use to mankind, and their output comprised but a small fraction' of the product of the country. — Held, that the contract did not tend to create a monopoly.
    Motion for injunction. On bill and affidavit in-support of the motion; on a single affidavit opposed.

      Mr. John F. Billon (of New York), Mr. Joseph Coult and-Mr. James E. Howell, for the complainants.

      Mr. John L. Cadwalader, Mr. George W. Wicker sham, Mr. F. J. Mather (all of New York), Mr. Richard V. Lindabury, for the defendants.
   Pitney, V. C.

The complainants are, severally, the owners of certain shares-of stock in the New Jersey Zinc and Iron Company, and seek By their bill to enjoin the performance of a contract entered into by that company with the other defendants.

The New Jersey Zinc Company was organized in 1880, under the General Corporation act of this state, and the purposes and objects of the corporation and places where its business is to be carried on are designated as follows in the certificate of organisation :

The places where the business of the company is to be carried on are the county of Sussex, in the State of New Jersey; the city of Newark, in the county of Essex in said state, and in the city of New York, county and State of New York.”

The objects are

•“ the mining of zinc and iron ores and other ores and mineral substances; the manufacture and sale of the products of such ores and minerals; the purchasing, leasing, holding and selling such real estate, machinery, mines and mineral rights and merchandise and other personal property as may be deemed ■necessary or convenient for the prosecution of the above-mentioned business.”

The business of selling the manufactured product of such ores ■and minerals out of the state was to be carried on “ in the said ■city of New York, and the principal part of such business within said state is to be transacted in the said city of Newark.” The capital stock was fixed at $3,040,000, divided into thirty thousand four hundred shares of $100 each. The complainants are the holders of two hundred and ninety-one of these shares, a little less than one per cent, of the whole.

The contract whose performance is sought to be enjoined was submitted to a meetiug of the stockholders called for that purpose, and received the approval of about eight-tenths of the whole. There is no room for the inference that each and every stockholder so approving did not have the opportunity to examine and consider the propriety of the contract and to exercise an intelligent judgment upon it. There is no room for inference that there was any mistake or any fraud, actual or constructive, in the procuration of the contract. There is no room for the suspicion even that the case presented has any of the features of ihose cases, unfortunately quite numerous in these days, where a bare majority of the stockholders in one corporation use theiit power to make a contract with another corporation in which they are more largely interested, which is very advantageous to the latter and disadvantageous to the former. In short, there is no-room to suspect even that there is the least element of a party making a contract with itself.

It follows that the general wisdom and propriety of the contract, having been approved by so large a majority of the stockholders, cannot be called in question here, and so much of the-allegations of the bill and, arguments of counsel as are based upon the idea of its improvidence and unsupported by any proof-must be disregarded.

However, in order to appreciate the value of the attack on the contract based upon other grounds presently to be mentioned, it is worth while to state generally the origin and object of it,

The defendant the New Jersey Zinc and Iron Company and the defendant the Hardyston Mining Company, very recently successor in title to the defendant the Lehigh Zinc and Iron Company, are severally the owners of certain mineral rights situate at a place called Mine Hill, in the Wallkill valley, in the county of Sussex. The mineral which they own is called franklinite and contains zinc, and its value consists in the presence of that-mineral in it. It was discovered some fifty or sixty years ago.,, and when first discovered, and before the lodes or veins in which it was found were developed, it was supposed that there were-two distinct minerals so situate that they could be separately owned and mined, namely, zinc and franklinite, the latter a peculiar mixture of mineral substances which takes its name from the village of Franklin, near which the veins are situate. Based upon this supposition, the titles to the two different minerals found in the same lodes or veins, at the place here in question, were separated. The right to mine the zinc ore was sold by itself, and the right to mine the franklinite ore was sold by itself.

But when an attempt was made to define and separate, in practice, the two ores in the earth, it was found that it was practicably impossible, and a serious dispute at once arose whether the various veins or portions of veins which were uncovered were franklinite or zinc.

This state .of things has led to a series of litigations in the state and federal courts, with varying results, which, I may here say, were not at all referred to in the bill, but in argument counsel for defendants relied, and I think properly, upon the common knowledge of the bench and bar of this state, derived from the official reports of the various suits, for a history of this controversy.

Before adverting to those reports it is proper to say that the defendant the New Jersey Zinc and Iron Company is the successor in title to the New Jersey Zinc Company, organized under a special charter about the middle of the century, and which became entitled to the “zinc” ore in the tract called Mine hill.

The title to the “ franklinite” in a district known as the south half of Mine hill became vested in one party, and that of the franklinite in the north half became vested in another party.

The first suit was between the old New Jersey .Zinc Company and the owner of the franklinite on the south half, and that resulted, first, iñ a victory for the franklinite company, as reported' in % JBeas. 333. That decision was reversed, on appeal, in 3 McCart. J¡.18, and the title to both ores in effect apparently vested in the zinc company. That was in 1862.

Under that decision the old zinc company prosecuted its business upon the south half of Mine hill until some time in the next decade, when a party holding an unsatisfied mortgage on the franklinite in the south half, who was not a party to the .previous litigation, foreclosed his mortgage, obtained the title and commenced a suit in the federal court against the New Jersey Zinc Company, which resulted adversely to that company. The result of that litigation was that the present New Jersey Zinc and Iron Company was organized, and the two warring titles to the franklinite and the zinc ores were conveyed to the new company, whereby it became the undisputed owner of all the ores in the south half of Mine hill and of the zinc ores on the north half.

In the meantime the franklinite on the north half became vested in the Lehigh Zinc and Iron Company, and about nine years ago the New Jersey Zinc and Iron Company commenced suit against the Lehigh Zinc and Iron Company to establish its title to the north half, which suit, with varying fortunes in the courts, was finally decided against the New Jersey Zinc and Iron Company in November, 1896.

This decision, however, covered only a part of the north half of the hill. Another undeveloped vein of the ore still remained unaffected by the decision.

In this state of things negotiations were entered into between the parties for the purpose of settling the litigation by the purchase by one party or the other of the opposite interests.

The Lehigh Zinc and Iron Company, which had been taking out- ores on the north half of Mine hill, sent them to Bethlehem, Pennsylvania (where they had a large establishment for that purpose), to be treated and made marketable, precisely as the New Jersey Zinc and Iron Company sent their ores to Newark, New Jersey, where they have a large establishment for that purpose.

The Lehigh Zinc and Iron Company also had a zinc mine near their works in Pennsylvania, and refused to sell or consolidate unless the settlement included all of their plant and its offshoots.

There was a third company, the defendant the Passaie Zinc Company, which owned a franklinite mine near Mine hill, in Sussex county, and works on the Hackensack river for utilizing its products. The controlling stockholder in that company, a Mr. Jones, interested himself in bringing about a settlement of the controversy between the New Jersey and Lehigh companies, and proposed to sell his works and mines at the same time.

Much the greater value of all the works combined was found in the mines owned and controlled by the New Jersey Zinc and Iron Company and the Lehigh Zinc and Iron Company.

The Passaic Zinc Company also had a mining and reducing plant in Wisconsin and another in Illinois, of more or less value, and Mr. Jones insisted that these plants should go with the sale of the Passaic zinc works.

The sworn statement of the president of the New Jersey Zinc and Iron Company is to the effect that the situation of affairs was such that it was found impracticable to effect a settlement of the controversy arising out of the difficulties in the title without buying up all of these works. With that view the contract in question was entered into, which was preliminary in its nature and depended upon the results of an investigation of the titles of all the properties and of the value in particular of the mines in Sussex county. Eminent experts, entirely indifferent between the parties, were chosen to appraise their value, and fixed them at a very high figure.

The price to be paid by the New Jersey Zinc and Iron Company for all these properties was (roughly) $1,250,000 in cash and the issue of thirty-two thousand nine hundred and thirty-four shares of stock, of $3,293,400 par value, to be distributed among the different owners.

The Lehigh Zinc and Iron Company and its appendages, including the Hardyston company, are owned almost entirely by four individuals — Messrs. Richard and August Heckscher and S. P. and J. P. Wetherill. The Wetherills also own certain interests in some patent rights, which pass with the sale.

In order to legitimatize the future operations of the company at points outside of the state and to make the necessary increase of capital stock, the same meeting of stockholders, which by a vote of about eight-tenths of the whole approved the contract, approved a change in the certificate of organization, by which the company was enabled to mine and manufacture outside the state and to buy and hold stocks Ac. and to increase its capital stock.

This exposition of the circumstances and real objects of the contract is made so that the objections urged by the complainants may be the better understood. They are as follows:

. First. That the transaction is a violation of the charter rights of the company and the contract rights between the stockholders in the following particulars:

(a) In attempting to buy out wholesale interests in a large number of corporations, for which they agree to pay a sum larger than their whole capital.

(b) In attempting to go into the mining and manufacturing business outside of New Jersey.

(c) In attempting to extend the business to points within the state -which are not included in the original agreement.

Second. That the proposed consolidation will result in the creation of a monopoly, and thereby render the complainants’ stock and rights liable to forfeiture at the suit of. the state.

■Third. The' -manner of increasing and distributing the increased capital stock is objected to, the particular ground of this last objection being- that any increase of capital stock must be divided among the present holders of stock in proportion to their holdings.

It is conceded on all hands that the original certificate of organization of this company forms a contract between the several stockholders, which, except by unanimous consent, cannot be affected by any change in it made by virtue of any subsequent act of the legislature, but that it can only be effectually changed by virtue of some act of the legislature then in force, which can and should be, so to speak, read into the contract.

It is conceded that sections 6 and 35 of the Corporation act of 1875, which was in force when this corporation was formed, cannot properly be so read into the certificate. Those sections reserve to the legislature the power to recall, in whole or in part, the legislative grant of corporate existence and immunity, and to annul the contract between the state and the corporation, but do not give the right to the corporation, or a majority of its stockholders, to alter the contract entered into between them except by the consent of each.

But it is further conceded that section 24 of that act, which provides for an increase of the capital stock, and section 33, which provides for a change in the nature of its business by the vote of two-thirds in interest of the stockholders, and section 55, which provides for the purchase of property with stock, must be considered as a part of the certificate of organization, and hence constitute a part of the contract between the stockholders.

The proposed change in the contract which was principally-relied upon by counsel of complainants, was the purchase of property and carrying on of business outside the state. 'With regard to this matter, it is enough to say that I do not find it necessary, for present purposes,' to determine whether or not it will be a breach of the contract between the stockholders for the company to-proceed to.prosecute mining and manufacturing enterprises outside of the state, since that is not a necessary part of the contract, as I read it, or if it be, the entire purchase may be made and the contract carried out, and the company still be at liberty to discontinue the operation of work outside of the state. The purchasing of these plants and works outside of the state is not an irretrievable step, which will commit the company irrevocably to an enterprise th*e prosecution of which will be a breach of the original contract between the stockholders. For that reason I think that the determination of that question may be properly deferred until the final hearing of the cause.

ÜÑTo great or present injury will result from the prosecution of the work pending suit, and hence it is not a case for preliminary restraint by the court.

This removes at once the principal objection made by the counsel of complainants to the execution of this contract.

With regard to the power to execute the mortgage, that is found in the fourth subdivision of the first section of the act.

The ownership of the mines in this state and the working up of their product are, of course, directly within the original purpose of the act.

The power to increase the capital stock is found in the twenty-fourth section of the original act, in these words: >

“ In case more capital is necessary, an additional certificate shall be filed under the hands and seals of two-thirds in interest of the stockholders or their legal representatives, stating the amount of such additional capital required.”

The power to so increase its stock — and that it had been effectively done in this case — was not disputed by the counsel of complainants in their brief or in oral argument, so that the regularity of the proposed increase is not drawn in question.

The only point made in that connection was that when a block of increased stock is issued, each of the old holders is entitled to such a proportion of it as his holdings bore to the whole amount of stock before the increase, and that complainants’ rights in that behalf are about to be invaded.

At the argument, counsel for defendants offered to the complainants to insure to.them the right to purchase at par such proportion of the new stock as they would be entitled to under the rule relied upon.

But easting out of view that offer, two answers are made to the objection by the defendants — first, that the fifty-fifth section authorizes the issuing of stock for the purchase of property, and that that section, which must also be read into the contract between the stockholders, overrides the geiferal rule invoked; and second, that the general rule (if there be such) requiring an equal .distribution of new stock was adopted by the courts for the purpose of preventing any particular stockholders or clique of stockholders from appropriating to themselves the right to subscribe to new stock ■ at par when such privilege is worth a premium. 2 Beach Priv. Corp. § 473; Gray v. Portland Bank, 3 Mass. 364. Ia the case in hand, as the stock is issued for the purchase of property which will become a part of the common property, and from which the dissenting stockholder will receive the same benefit, if any, as each of-his associates, I can see no reason for the application of the rule in this case. The amount of stock to be issued to the parties interested in the properties to be conveyed was fixed upon the basis of their, actual value.

The parties dealt at arm’s length, and, as before observed, there is no reason to suspect that there is here the least element of a party making a contract with himself. Besides, it is well held in such cases that in case the corporation deprives a stockholder of his rights in this behalf, it is liable to an action at law for damages, and there is no suggestion that the zinc company is not of sufficient responsibility to answer to such action.

For these reasons, I think the complainants are not entitled to relief on that ground.

It remains to consider the question of illegal combination which would subject the new corporation to an attack by the attorney-general. Upon such consideration as the four days allowed me for that purpose have permitted me to give the subject, I think that there is nothing in that ground.

The circumstances show that it is not the object or purpose of • the contract to create a monopoly. The affidavit of the president of the New Jersey Zinc and Iron Company shows that the zinc ores which will be controlled by it after these several purchases constitute but a small fraction of the world’s supply, and that its product of zinc will also be but a small fraction of that produced throughout the country. Besides, buying up by one corporation of the property of another, and consolidating the-whole into one business to the extent and in the manner provided for in this agreement is not, in my judgment, contrary tp public policy, nor does it tend to create a monopoly. The question was carefully examined by Vice-Chancellor Green in Ellerman v. Stock Yards, 4 Dick. Ch. Rep. 217, and that opinion-was reviewed and reaffirmed in the subsequent case of Willoughby v. Junction Railways, 5 Dick. Ch. Rep. 656, heard by both Vice-Chancellor Green and Vice-Chancellor Van Fleet, and they concurred in the same result.

It must be remembered in this connection that these companies-are not exercising any public franchise of carrying passengers or goods, but only the franchise of being a corporation. Their business is one that may be conducted by private individuals. They are simply the owners of a certain species of property which, in its natural state, is of no use to mankind, and which, after it has been manufactured and made fit for use, can hardly be -classed as a necessity. The law forbidding forestalling the market'does not, in my judgment, apply to the purchase of such property. Jac. Dict.; Bouv. Dict, tit. “Forestalling.” By the law of the land these owners have the right to exercise their own judgment as to when, if ever, and how they will spend their money in preparing their property for market and rendering it fit for use by mankind. How, I am unable to find any foundation, either in law or in morals, for the notion that the-public have the right to have these private owners of. this sort of property continue to do business in competition with each other. No doubt the public has reasonable ground to entertain the hope and expectation that its individual members will generally, in their several struggles to acquiré the means of comfortable existence, compete with each other. But such expectation is based entirely upon the exercise of the free will and choice of the individual, and not upon any legal or moral duty to compete, and can never, from the nature of things, become a matter of right on the part of the public against the individual. In fact, the essential quality of that series of acts or course of conduct which we call competition is that it shall be the result ■of the free choice of the individual and not of any legal or moral •obligation or duty.

But I am satisfied that it is not the object of the consolidation to smother competition, and that the real object is to put an end, honorable and profitable to both parties, to a litigation whose issue is really incapable of satisfactory judicial determination.

Eor these reasons, which I am sorry that my daily attendance in court, since the argument, has prevented me from stating more at length, I shall advise that the application for an order •of restraint be denied.


text:
    Alice B. Smith v. Charles J. M. Smith.
    1. A decree in favor of a wife against lier husband, under the twentieth section of the Divorce act, founded upon an actual abandonment on a particular day — Held, in a subsequent suit for absolute divorce on the ground of •desertion, to be conclusive evidence of a desertion on that day.
    2. It is no -bar to the wife’s suit for divorce by reason of desertion by the husband for the statutory period, that she in fact, during that period, did not •desire her husband to return and felt unwilling to live with him, provided such state of feeling on her part was the result of her husband’s misconduct, involving cruel treatment of her.

      Heard on bill, answer and proofs.

      Mr. William Pintard, for the complainant.

      Mr. Edmund Wilson, for the defendant.
   Pitney, V. C.

This is a bill for divorce on the ground of desertion. It was filed on the 29th of April, 1896, and sets forth a desertion on the 2d day of March, 1894. It casually mentions that the defendant has contributed to the support of the complainant since the desertion under a decree of this court made on the 24th of January, 1895.

The answer admits the marriage, admits the payment of the money under the decree of the court mentioned in the bill, and denies that he deserted the complainant on the 2d of March, 1894, and that he has willfully, continuedly and obstinately deserted her since that time, and charges that previous to the 2d of March, 1894, the complainant had frequently threatened him with violence and had inflicted bodily injury upon him, and declared that she would continue such conduct unless he conveyed to her certain properties mentioned in the answer and referred to hereafter; and that on the 2d of March, 1894, she assaulted him because he refused to give her a certain certificate of bank stock, and attempted by violence to take it from his possession, and shut him in a room and confined him there for over three hours and attempted by duress to gain physical possession of the certificate.

Further, by way of cross-bill, the answer sets up that he, the defendant, has not lived with nor shared the companionship or society of the complainant since the 2d of March, 1894, and then charges her with adultery on divers dates and times in the years 189Ó, 1891, 1892 and 1893 with one Charles Smith, and prays that he may be divorced from her on that ground.

At the hearing, the complainant, in order to sustain the issue on her part, introduced in evidence the bill, answer and decree of this court in a suit brought by her against her husband for maintenance, under the twentieth section of the Divorce act. The bill in that cause was filed on the 16th of March, 1894, and set up that she had been married to the defendant in 1888 ; that she lived with him in various houses, at various places in New Jersey, until the 2d of March, 1894, when he abandoned her. She charged that, during all that time, he failed to provide for her, so that she was obliged to work to support herself, and that he treated her in a brutal manner — struck and bit and kicked her on various occasions — and that on the 2d of March, 1894, he packed up all his personal belongings — clothing and some books and other chattel articles — and moved away from their house, declaring that he would not live with her any longer; that he intended to return to the house, and wished her to leave, so that, by the 1st of April, he could take possession of it, but that she declined to leave, and was, at the time of the filing of the bill, still in possession.

That bill set out other facts with regard to the pecuniary situation and ability of the defendant, which will be referred to further on.

The defendant filed his answer to that bill on the 14th of May, 1894, in which he admitted the marriage and his having lived with his wife at various places in this state, as set out in the bill; denied any rough or cruel treatment, but says that the only violence he ever used towards her was when he found it necessary to protect himself from her violence in attempting to forcibly take from his possession the certificate of bank stock, and charged her with having, on one occasion, struck him with violence, such as to leave permanent marks upon him. He alleged that on the 2d of March, 1894, he packed up his personal belongings and left the house where the complainant- now lives, saying that he was going away to leave her and not live with her any longer, as charged in the said complainant’s bill of complaint, but he denied that, upon that occasion, he said he would return on the 1st of April and bring some other woman with him, and wished his wife to leave the house, so as to get possession. He admits that he caused a notice to be published in the newspapers declaring that he would no longer be responsible for debts contracted by her. He charges extreme cruelty in her treatment of him and frequent infliction of bodily injuries, and reasserts the assault committed on him on the 2d of March, in what appears to have been a scrambling quarrel for the possession of the certificate of bank stock.

It will be observed that this answer sets up no adultery, nor does it allege any willingness on the part of the defendant to resume cohabitation with his wife.

That cause was brought to a hearing and a decree was made on the 24th of January, 1895, in favor of the complainant, that defendant pay her $400 a year, commencing with the 2d of March, 1894, and ordering the defendant to give bond, with security, to insure the payment.

The decree recites

“that the defendant, without justifiable cause, abandoned and separated himself from his wife, the complainant, on the second day of March, eighteen hundred and ninety-four, and has ever since refused, and still refuses, to maintain and provide for her.”

On the hearing of this cause I held that the pleadings and decree in that cause were conclusive that the defendant did separate himself from his wife on the 2d of March, 1894, and refused to permit the defendant to contradict that fact; but, subject to further consideration, I permitted the defendant to offer proof, first, of his subsequent bona fide offers to resume cohabitation and live with his wife and support her in the ordinary way, and second, to prove the adulteries charged in his answer and cross-bill. The defendant made no attempt to sustain the charge of adultery, but did attempt to prove that he had offered to resume cohabitation with the complainant.

In support of that allegation the defendant swears that on the 3d of March, and several days subsequently, he returned to the house where his wife was living and asked her if she would not have him come back and live with her, and that she declared that she never would live with him again. This asking to come back and live with her was positively denied by the wife, and I find her quite as reliable as a witness as he. The husband further swore that he ’ did remove his belongings from day to day, commencing on the day after the 2d of March, until he had taken them all away from the house where his wife lived except one bedroom suit, which he said belonged to him but which he left for her use.

■ The only other proof of any offer on his part to resume cohabitation with his wife was in' the shape of - a letter which he wrote to her some time in September, 1894, and' shortly prior to-the actual hearing of the suit then pending between them before Advisory Master Williams. They have lived near each other ever since and have never spoken to each other.

In order to understand the force and effect of the letter in question, it is necessary to state other facts that aré proven or admitted either by counsel in open court or by the pleadings in the two causes.

The defendant is, apparently, the only child of a wealthy gentleman of Monmouth county, who lived in Middletown township, not far. from Red Bank, and was at his death, which occurred some time after the marriage of the parties, the owner of two farms and considerable personal property. By his will he devised the homestead farm, containing about one hundred acres, to his wife for life, and at her decease to go to his son, the defendant. He also devised to his son a second farm, containing about two hundred acres, in the possession of one Quigley as tenant, and spoken of in the evidence as the Quigley farm-. This is a farm- of considerable value and produced a competent rent. He also left him personal property, including a certificate of bank stock, which at one time was worth nearly three hundred' per cent, and attained a value of nearly $5,000.

Some time after the father’s death the complainant induced the defendant to make a conveyance to her of the Quigley farm, in which he had a present estate, but in the conveyance the defendant reserved to himself the use of that farm for his own life, so that the settlement gave the wife no present income. The wife swears, and it is hardly disputed, that the husband was thriftless and incapable of carrying1 on successfully any business, and his appearance on the stand indicates that she was right in this ; and she swears that he furnished' her with very-slender living and support during the whole of their cohabitation; that after she had acquired the title to the Quigley place, having no comfortable' place to live', the defendant’s mother having married a second time and desiring to occupy- the homestead, the husband, at the request of his wife, built a comfortable cottage on the Quigley place, which they occupied- together. Subsequently, the defendant’s mother having removed from the homestead, the parties went there to live and were living there at the homestead farm (the present use of which belongs to the defendant’s mother) on the 2d of March, 1894, when they separated. The quarrel which was the immediate cause of their separation arose over the possession of the bank stock. The wife heard the husband rummaging in the storeroom where their valuable papers were kept, and not desiring him to get possession of the bank stock and spend the proceeds, she attempted by violence to prevent him, and the result was that he overpowered her, got the certificate of stock, took it away and transferred it to his mother, who swears that she sold it to pay his debts, among others a debt which he had incurred in building the cottage on her farm.

At the same time the defendant conveyed to his mother his title to the homestead farm in consideration of her entering into a covenant to support him comfortably during his lifetime. He also gave her a general power of attorney to transact his business; in fact, submitted himself entirely to her control and guardianship.

At the hearing the defendant appeared to be dressed as an ordinary gentleman, showing no appearance of being engáged in ány business or occupation whatever, and on the stand appeared to be of slender intellect.

The difficult question in the cause is as to what effect' should be given to the evidence of the wife given in answer to questions in connection with the letter written by defendant to her in September, 1894.

The substance of the letter is as follows : He' requested her to come over to the Quigley house, at a certain hour on a day named, to sign papers transferring to him her title in the Quigley place, and then used the following language: “Will you compromise the lawsuit and come back and live in the cottage ?”

The complainant, when asked on the stand what she did in regard to that letter, answered that she did nothing whatever, did not answer it; and asked by me why she did not, answered that she was unwilling to live with her husband again, and that her parents would not permit her to live with him again; that she was afraid of him; that he had pinched her and tickled her and had slapped her.

On a subsequent hearing complainant produced a respectable lady, whose evidence I see no reason whatever to doubt in the least, who visited the parties as a friend at times but on other occasions as a seamstress, and she swears that on one occasion while she was at their house the husband came in and sat down to the tea table in a violent temper, and misbehaved himself by shoving the plates around against each other on the table, and behaved, generally, in an indecent manner, and that his wife complained and said she could not sit at the table, and arose; that thereupon the husband arose and struck her and caught her by the arm and attempted to pull and drag her and put her out of the door, declaring that he would do so, but she caught with her hands to a heavy chair, and by reason of her tenacity to that chair he was unable to get her out of doors. This witness says he then and at other times exhibited considerable temper, and she had seen him at other times punch her with his fingers, not in fun but, as she says, in anger, and she expressed it in such a, way that I have no doubt it was in anger.

Now I think that the mere writing of the letter in question does not improve the position of the defendant. After the occurrences of March 2d, 1894, and the actual abandonment of his wife and withdrawal of support, with the insertion of the insulting notices in the two newspapers, and the permitting her to be ejected from their dwelling, and the putting of himself— properly enough — and his affairs under the complete control of his mother, if he sincerely desired to resume marital relations and live with his wife, and love and cherish her as a husband should, something more was necessary to be done by him in order to accomplish that result , than the mere writing of the letter in question. He should have gone himself, or should have procured some other proper person to go to her, who could show her reasonable grounds to believe that he would act the part of a husband towards her, and that he would do it by the consent and approbation of his only parent, for it was idle for the wife to go to live with him unless is was to be an harmonious living, and unless that cohabitation had the approval and support of his mother. It was unreasonable to ask her to resume cohabitation with him unless she was assured of a proper support, and she could only be assured of that-through the cheerful co-operation and approval of his mother. Therefore, if he really wished, and had any reason to hope, to resume cohabitation with his wife, it was necessary for him to do a great deal more than appears on the face of that letter.

Hence, I conclude that he has not put her in the position of having refused a reasonable request to resume cohabitation.

The difficulty in the case is not that the defendant has made an offer to return, which has been refused, but is found in the frame of mind and the feeling of this lady, which were developed by her examination. The burden is on the defendant, in my judgment, to show that his desertion worked no injury to his wife, because she did not wish him to live with her and she did not wish to live with him, and a person who is willingly injured is not injured.

Volenti non fit injuria is the principle. But that maxim, in my judgment, does not apply here if, as a matter of fact, the defendant himself is responsible for the feelings of aversion entertained by the wife. If he, by his conduct, has alienated her affections and given her good cause to dislike him and to have no desire to live with him, he cannot take advantage of those feelings to excuse himself for a continued desertion without any serious and honest effort to terminate it.

The question then is, was the defendant responsible for his wife’s dislike of him? The complainant knew the defendant and his peculiarities before she married him, but she could not .anticipate that he would lead her an uncomfortable life, or one that she was not obliged to.submit to.. She says in her evidence, and the original bill alleges, that up to a few months before that bill was filed they lived fairly comfortably, although he didn’t support her in the way that, a person in his circumstances ought. He was probably unable to do it. I think, from the fact that he kept a fine horse, that he had some expensive habits. Keeping a fine driving-horse takes some money; and as he was not engaged, in any business, he would be very likely to spend money. I have no doubt, from the wife’s account of it herself, that she was not supported in a manner that she had a right to expect. But that is a very small matter.

In this case it is undoubtedly proven — I must accept it — that he did lay violent hands on her on several occasions, and did it in anger.

Now the measure of the extent of violence which is held by the courts to amount to “cruelty” has changed considerably within fifty years. We are living in an age when physical violence is almost unpardonable; certainly among people of this character. No man of his station in life has the right to lay his hands in anger on his wife. And he is, besides, a man of some peculiarities of temperament and intellect. And can' you be sure of a man who has that temperament, who has indulged it once or twice in the way of laying violent hands on his wife? You can only judge of the future by the past, and where a man of that temperament and of that lack of intellectual control over himself has once given way to violence, you don’t know what to expect of him. The wife says that she was afraid of her husband and gives as the reason, and proves, that he had used violence towards her.

Then is to be considered the fact that she was treated with great indignity, shortly after the separation, by the publication by him of the two offensive notices' in the newspapers, stating that he would not be responsible for her debts any more. And she, undoubtedly, had reason to believe that these notices were not the act of the husband alone, but that he was prompted by the persons behind him; and on the stand it was not pretended that he wrote and inserted the notices — it was said that he wás responsible for them'. ■ . .;.

Then we have the answer in .this cause, and it throws a reflective light. ’ It deliberately charges her with a long course of adultery before the separation, and I gave the defendant an opportunity to prove it, on the ground that it was hot known to him when the previous answer was filed and had come to :his knowledge since, but not a scintilla of proof has been offered of that charge.

Now it has been held in many cases and in some states that the mere making of an unfounded charge of adultery against the .wife is in and of itself extreme.cruelty, and it has always been held" in this state as an .element of cruelty. And the state of mind on the defendant’s part which would induce him, whether of his own accord or at the instigation of others, to make this unfounded charge of adultery at this late date, shows what sort of a person he was to live with and what sort of a home he made for his wife.

For these reasons I think the husband should, upon the proofs submitted, be held responsible for the state of mind exhibited by his wife. She swears that she was afraid óf him, and I cannot say that she was not,, justified in it. She evidently had lost all affection for him, and I think that her affection was destroyed by his misconduct. He had abandoned her under aggravating circumstances and had manifested no real desire to go back and live with her. .

I think it must be considered as settled, since the decision of the court of errors and appeals in Sergent v. Sergent, 9 Stew. Eq. 644, reversing Vice-Chancellor Van Fleet as reported in 6 Stew. Eq. 204, that the mere fact that the deserted wife, for sufficient reasons, for which her. deserting husband is responsible, does not desire to return to him, is no bar to her action for divorce on the ground of his desertion, if he has committed that offence and there is no collusion between the parties. In that case Vice-Chancellor Van Fleet refused the divorce on the ground that it was plain that the desertion of the husband was acquiesced in by the wife and that she really did not wish him to return. But he was reversed by the court of errors and appeals, and I gather that the real ground of reversal was that the court differed with him on the point above stated.

I hold, therefore, that the state of mind of the complainant herein, having been caused by the misconduct of the defendant, is no bar to her right to a divorce against him on account of his willful and continued desertion, and will advise a decree accordinelv.


text:
    Richard A. Stevens, administrator cum, testamento annexo of William K. Miller, deceased, v. Mary H. Dewey et al.
    1. A decree directing an administrator cum testamento annexo to distribute money according to the terms of a will is not a decree construing the will.
    2. Under Gen. Stat, p. 2891, the orphans court has authority to construe a will only on special proceedings instituted on the application of some party in interest, bringing every person interested into court.
    3. Testator gave his wife all his estate for life, “and what is left of the household goods and furniture, to dispose of as she deems proper; devising, also, my real estate to her.” After several bequests of money, all payable after his wife’s death, he gave, by the ninth clause, the balance of his estate “so left” after his wife’s death, if any, to a church on certain trusts. By a codicil he revoked the ninth clause, and devised land to the church, and declared that, in case his estate could not pay all the bequests in full, his estate should be divided in proportion “to said bequests, pro rata.” — Held, that on the death of the wife, who survived testator, the administrator cum testamento annexo was justified, because of the serious questions involved, in asking the court of chancery to construe the will.
    On demurrer to bill.
    The complainant, as administrator cum testamento annexo of William K. Miller, deceased, files his bill asking for the aid of the court in construing the will of his testator, with a statement that there are adverse claims made by two classes of defendants, who are made parties, and prays that they may interplead.
    The facts set forth in the bill and admitted by the demurrer are as follows:
    By the second clause of his will, the testator gave to his wife, Elizabeth,
    “all my real estate and personal property to be for her sole use and maintenance to use as she deems proper for her support’and maintenance during her natural life, the same as I could if living, and what is left of the household goods and furniture to dispose of as she deems proper devising also my real estate to her.”
    He then made several bequests of specific sums of money to several persons, all payable after the death of his wife.
    By the ninth clause he gave “ the balance of my estate so left after the decease of my wife, if any there be,” to a Methodist Episcopal church, upon certain trusts.
    There is no other disposition of the residue except that contained in the ninth clause.
    By a codicil he revoked the ninth clause, declared it to be of no effect, and devised to the church a certain piece of land, then added this clause:
    “It is understood that in case my estate could not pay all the bequests in full, my estate shall be divided in proportion to the said bequests, pro rata.”

    His wife survived him, proved his will, and died testate of a will by which she made certain small specific bequests of household goods to some twelve or more different persons, then gave the remainder of her personal property to be divided equally among the persons previously mentioned in her will. She then, by virtue of a supposed authority given to her in her husband’s will, appointed the complainant her executor and also executor of her husband’s will. She made a specific devise of the real estate. Finally, she made another specific bequest to certain persons of “ whatever there may be remaining of my husband’s estate after paying the legacies that he has given in his will.” ■This,, will .was duly proven before' the surrogate .of,'Morris county. ■ • ■ ! . , .oA
    After, the. death of the- widow,' the complainant was appointed administrator cum testamento annexo of the husband’s;estate, and duly exhibited his account, thereof rto - the orphans court of Morris county, showing a balance in his hands of, $1,422:23, which account was confirmed by the court; and the court, by its decree of confirmation, directed complainant to' distribute the balance in his hands “ according to the terms of the aforésaid last will and testament of William K. Miller, deceased.”
    The next of kin of the testator claim that he died intestate of the sum of money in question (which, it may be assumed, remained after the payment of the several legacies metitioned in his will), and, therefore; thát they are entitled to have the same equally.divided among them.
    The persons named in the last cláuse of the will of Mrs. Miller, on the other hand, contend, as may be' inferred, that inasmuch as the use of the whole ;of the .testator’s personal estate was given to his wife for life, with power to use as much of it as she desired for her support and' maintenance) and no bequest ■over at her death 'was made, the whole interest vested in the tenant for life, and hence that it passed under her will. ;
    The grounds of demurrer are — first, that the complainant has already submitted himself to a court having jurisdiction of. the parties and the subject-matter, and has obtained a decree of that court directing him in the performance of his duty in the premises, and that the effect of the bill is to ask the court to construe the decree of the orphans court, and that this-court has no such jurisdiction; and second, that the will of Miller.conveys only.a legal title, and the effect of the court construing the will is th.e passing by it on a legal title, a matter over which, the court has no jurisdiction.' ' . ' . . - :

      Mr. John JB. Vreeland, for the complainant.

      Mr. Maximilian T. Rosenberg, for the demurrants.
   Pitney, V. C.

The principal'- reliance of the. defendant was upon the first point, to wit, that .the matters have already been passed upon by the orphans court of the county, of Morris in the clause contained in the decree;

This point is without the least strength. The direction of the court to distribute the money according to the terms of the will is the ordinary addenda to a decree allowing accounts, in use by the orphans court of the county of Morris for many years, and does not approach in any degree a decree construing the will. The question still remains, Who is entitled to it under the will of Mr. Miller?

It was further argued, however, that the complainant, having once gone into the orphans court to submit his account, should have procured a construing decree from that court, which has full jurisdiction of the subject under the one hundred and fifty-first section of the Orphans Court act (Gen. Stat. p. 2391), which section had its origin in 1872. P. L. of 1872 p. 47. The complete answer to that point is found in the case of Adams v. Adams, 1 Dick. Ch. Rep. 298, decided by the court of errors and appeals. It was there held that the orphans court had no authority to make any such decree except upon special proceedings instituted upon the application of some party in interest, and bringing every one of the parties interested into court; that a general publication of an intention to settle an account was not such notice. The bill is silent as to whether any such application has been made in this case or not; but, following the maxim quod non apparel non est, it must be presumed that no such application has been made.

That this court has jurisdiction of such a suit is too plain for argument, and the machinery of this court for obtaining'jurisdiction of all the parties and doing complete justice among them is at least equal, if not superior, in efficiency and cheapness to that of the. orphans court.

It only remains to inquire whether or not there really is any serious question, arising upon the face of the will to warrant the complainant in'seeking the aid of this court. Without expressing the least opinion upon the true construction of the will, I conclude, after a consideration of its peculiar provisions, that there is such a question, and that the complainant was entirely justified in coming to this court.

The demurrer must be overruled, with costs, with leave to answer in twenty days.


text:
    Charles E. Terhune et al. v. Robert A. Sibbald.
    1. Creditors who have proven their claims against an assigned estate may maintain a bill to set aside fraudulent sales made by the assignor, and for the removal of the assignee, who was a participant in these fraudulent sales, though their claims are not in judgment.
    2. Creditors may maintain an action to set aside fraudulent sales of an assignor, without any demand on the assignee to bring such suit, when he is a party to the fraud.
    3. In a suit to set aside a conveyance alleged to be fraudulent, the grantee is a necessary party.
    4. Where the orphans court could grant only a portion of the relief prayed for in a bill in equity against an assignee in insolvency, the court of chancery will retain the bill for all purposes.
    On demurrer.

      Mr. Clarence Kelsey, for the complainants.

      Mr. Reuben M. Hart, for the defendant.
   Pitney, V. C.

The bill is filed by eight creditors of William Havens against Robert Sibbald, to whom Havens has assigned all his property for the equal benefit of his creditors. All of the complainants but the first, Terhune, have proven their claims against the estate. Three are admitted to be creditors by the schedule annexed to the deed of assignment.

Under the rule enunciated by the chancellor in Lee v. Cole, 17 Stew. Eq. 319, and which the court of appeals did not disapprove in reversing the decree in that cause on appeal, and which was finally expressly adopted by that court in Kalmus v. Baltin, 7 Dick. Ch. Rep. 290, all of the complainants except Terhune have a standing in this court for the purpose of this bill, although none have obtained judgments on their claims.

The scope and gravamen of the bill are that the assignment in question was part of a scheme gotten up between the debtor and his assignee to so dispose of his property as to defraud his creditors, resembling, in this respect, the case of White v. Davis, 3 Dick. Ch. Rep. 22, and, on appeal, 4 Dick. Ch. Rep. 567. The bill contains specific charges of fraud with regard to three pieces of real estate.

The first charges a conveyance of real estate by one Reddick, at the request of, and for a consideration paid by, the debtor to a Mrs. Groll, the sister of the debtor. That conveyance was made on the 20th of April, 1896, one month before the assignment by the debtor to the defendant Sibbald. The charge is that Mrs. Groll holds that property in trust for her brother.

The next charge is that on the 11th of March, 1896, the debtor Havens, without consideration, conveyed to his sister, Mrs. Groll, two other lots of land, and that on the 28th of April, 1896, three weeks before the assignment, Mrs. Groll conveyed the premises to Sibbald, the defendant, and that such conveyance was made without consideration; and that on the 9th of May, Sibbald entered into an agreement to sell to one Beers a part of the premises so conveyed to him, and that on the 29th of August, 1896, he conveyed that part of the premises to Beers and received therefor $650-in cash, which he claims the right to retain as his own, as well as the part of the land still retained by him.

The third charge is that among the assets which passed to the assignee by the conveyance was a house and lot which was appraised at $750, and which was worth $2,000; and that Sibbald applied by petition to the orphans court for an order to sell the same to one Bernard at private sale for a consideration of $225 in cash and the assumption by Bernard of a mortgage on the property of $500, and stated under oath in his petition that the price offered by Bernard was the full value of the land and premises and the best price that could be obtained for the same, and that upon that application the orphans court made an order to sell and convey to Bernard at that price; and Sibbald did, on, the 2d of July, convey the premises to Bernard, but that the representations as -to value in the petition were false, to the knowledge of Sibbald, and that the conveyance was made for the purpose of defrauding the creditors of Havens, the debtor; that Bernard was not a bona fide purchaser, but knew the land was sold to him for a fraudulent purpose, and that shortly after-wards Sibbald, acting as the agent for the said Bernard, procured one Berry to purchase the said property from the said Bernard by deed dated August 13th, 1896, for the consideration of $1,000 in cash over and above the mortgage, being an advance of $750 over the price paid by Bernard.

• No person is made defendant besides Sibbald, and the prayer is that he may be removed and a fit and proper person appointed in his place to execute the trust, and that the land conveyed to Mrs. Groll and still held by her, the money received from Beers from a sale of part of the premises conveyed to Sibbald by Mrs. Groll, and the land so conveyed still retained by Sibbald, may be decreed to be held in trust by Sibbald for use of the creditors, and that, Sibbald may be decreed and compelled to transfer and deliver and pay to a new trustee all the real and personal property held by him in trust. It further prays an accounting against Sibbald and for other relief.

• The bill does not allege that the complainants have asked Sibbald to sue and recover the real estate standing in the name of Mrs. Groll, but I think the circumstances and other allegations of the bill excuse him for not so doing. Taking the allegations of the bill to be true, as we must for present purposes, it would, manifestly, be idle to ask defendant to bring suit to reach those assets.

With regard to the land alleged to be held in trust'by Mrs. Groll, it is sufficient to say that .she has not been made a party, and in her absence no decree could be' made as to that land. The demurrer for want of parties is well taken as to this part of the bill.

- With regard to the land charged to be held by Sibbald himself) I think the bill will-lie,-and as to that part of the bill the demurrer fails.

"• With regard to the money received by Sibbald from part of the land sold by him to Beers, if that feature stood by itself, the proper remedy would be in. the orphans court. The same may be said of the allegation as to the advance in price on the sale from Bernard to Berry. The orphans court would have jurisdiction to compel the assignee to account for that; that this court would not, in an ordinary case, assume jurisdiction which could be as well administered in the orphans court. Such a case was Hoagland v. See, 13 Stew. Eq. 469.

But the bill in hand, more nearly resembles that in White v. Davis, above cited, and the case disclosed by the bill will justify the court in removing the assignee and appointing a new trustee in his place. This aspect of the affair, together with the charge of fraud as to real estate, justifies this court in retaining the bill for all purposes.

The power and duty of the court to entertain a bill of this kind, in order to assist the present or future trustee in reaching the assets of the estate, was fully established by the cases just cited, White v. Davis and Kalmus v. Ballin.

The demurrer will be'sustained as to the complainant Terhune and overruled as to the other complainants, without costs, and defendant to have liberty to answer. • Liberty is also given to the complainants to amend their bill by making Mrs. Groll and the judgment debtor, Havens, and such other parties as they may be advised, parties defendants.


text:
      W. G. E. See, receiver, v. Heppenheimer, Naumberg, Kraus, Lummis, Herman, Lauer et al.
    1. - A bill by a receiver of a corporation against the stockholders and bondholders of the company alleged that certain persons formed a pool to promote the organization of a stock company to buy paper-mills, and procured options on thirty-nine mills at a certain price; that they transferred all options to one man; that they made from him a pretended purchase by the company for mortgage bonds, preferred stock and common stock; that they paid the origi-. nal owners partly in cash, partly in preferred stock and partly in common stock, at a price far beyond the real value, and still had a large amount of bonds and stock of both kinds to be distributed among themselves as pro-' moters; and prayed that the promoters should be decreed to make good to the' company any loss by reason of any of such bonds or stock in the hands of bona fide purchasers. As to sis demurring defendants, the bill alleged that certain of the bonds and stock were held by them and others; that they were not bona fide purchasers of such bonds, or bona fide creditors or stockholders of the company, and, in so far as they were not said promoters, they were the1 mere agents of the promoters. The object of the bill was to ascertain the amount for which each of the bonds should be held, and reduce the secured indebtedness accordingly; to declare all bonds issued without consideration void; to ascertain the amount actually paid for the stock, and, after applying the assets to payment of creditors, to assess the difference pro rata against such stockholders as had not paid for their stock. — Held, that the bill was not multifarious.
    2. The statements of such bill were sufficient at least to throw on such demurring defendants the burden of proving that they were bona fide purchasers for value, without notice, of the bonds and stock held by them.
    3. Nor is the bill open to the objection that complainant’s remedy is at law.
    4. The attorney-general was not a necessary party to a bill by the receiver of an insolvent corporation formed for the purpose of creating a monopoly against the stockholders and bondholders, to ascertain which of the stockholders have paid for their stock and which have not, and the amount necessary for each one to pay, and to declare such bonds void.
    On demurrer.

      Mr. Francis J. Swayze and Mr. J. De Witt Warner (of New York), for the complainant.

      Mr. Eugene Stevenson and Mr. Otto Crouse, for the demur-rants.
   Pitney, V. C.

The demurrer is filed by six out of about two hundred defendants, and is —first, on the general ground of want of equity; second, multifariousness and misjoinder, and third, want of parties.

The complainant sues as receiver of an insolvent corporation. The defendants are stockholders and mortgage bondholders of the corporation.

The bill is voluminous and the defendants numerous. The endeavor of the complainant seems to have been to bring in all the stockholders and bondholders so far as he could ascertain them.

The bill alleges that the bonds and stock were issued without consideration paid, or if any, only a small part of the face value of a portion of the bonds and stock; and the object of the bill is to ascertain the amount for which each of the bonds should be held; to reduce the secured indebtedness of the company accordingly; to declare all those bonds that have been issued without any consideration void in the hands of the holders; to ascertain the amount actually paid to the company for their stock by the several stockholders, and then, after applying all the assets to the payment of the creditors, to assess the difference pro rata against such stockholders as have not paid for their stock in full.

The allegation of the bill, shortly stated, is that a certain firm of lawyers in New York and another firm of lawyers in Chicago, together with two or three other individuals, combined and made up a pool for the purpose of promoting the organization of a stock company for the purpose of buying up a large number of paper-mills situate in several different states, and that, for that purpose, they procured options on thirty-nine different mills at a certain price; that, having procured those options, they organized the insolvent company under the laws of this state, and then transferred all the options to one man, who was a mere figurehead for the pool; then made a pretended purchase by the company from this figurehead, for the consideration of $1,000,000 in mortgage bonds, $1,000,000 in. preferred stock and $3,000,000 in common stock; that they, in turn, paid for the property to the original owners partly in cash, partly in preferred stock and partly in common stock, at a price far beyond its real value, and still had a large amount of bonds and stock of both kinds to be distributed among themselves as promoters.

So far, the case somewhat resembles that of Plaquemines Tropical Fruit Co. v. Buck, 7 Dick. Ch. Rep. 219, and Woodbury Heights Land Co. v. Loudenslager, 35 Atl. Pep. 436, and, so far as respects the cancellation and reduction of the mortgage bonds, it resembles the case of Baker, Receiver, v. Guarantee Trust and Safe Deposit Co., 31 Atl. Rep. 174.

The charge against these demurring defendants is that a certain number of the first mortgage bonds was issued to the pool of promoters, some for cash and some not for cash and therefore without any consideration, and that there was issued to the holders of this lot of bonds, and as a gratuity and wholly without consideration, two thousand shares of the preferred stock, of the aggregate par value of $200,000, and four thousand shares of the common stock, of the aggregate par value of $400,000; and that the six defendants (among others) are-the “holders of the bonds of said company and of the preferred or common stock of said company so issued as aforesaid, and for which no consideration whatever has ever been paid to said company.” And further, that the persons named “ were not, and have never become, bona fide purchasers for value of said bonds or bona fide creditors or stockholders of said company, and that, in so far as they were not of said promoters, they were in the premises the mere agents and representatives of said promoters, and that said promoters procured such bonds to be issued to said bondholders instead of to the promoters themselves, with the intent thereby to prevent said company from resisting enforcement of liability against it of said bonds; and that so far as others than said promoters have been or are now holders of any of said bonds, such bonds in their hands are subject to such equities as existed at the date of their pretended issue or delivery to the promoters.”

There is a further general charge that the promoters, among whom are the defendants Heppenheimer and Herman, should be decreed to make good to the company any loss by reason of any of these bonds or this stock getting into the hands either of irresponsible parties or of bona fide purchasers for value.

With regard to the charge of multifariousness: In order to ascertain just how much is actually due from the company on the bonds, and to realize upon the assets and ascertain the deficiency to be charged against the stockholders, it seems to me that all the inquiries set on foot by the bill are necessary, and the demurring defendants are necessary parties, to the end that they may be bound by the result of the litigation and be properly held liable for their share of the deficiency.

With regard to the question of the actual liability of the defendants, it is quite .clear that if they have received either the stock or the bonds from the company, without having paid for them, they are liable to respond to the company. This is admitted by demurrants.

The argument of defendants’ counsel was that they are not shown not to be bona fide purchasers for value from some previous holder. On the other hand, it was argued, first, that the statements in the bill above set forth are sufficiently explicit allegations that these defendants received their bonds and stock, or one of them, without consideration; or, at the furthest, that the burden is cast on them to show that they were bona fide purchasers. And further, it was urged that by the law of the land there can be no such thing as a bona fide purchaser of stock from a subscriber who has not paid for the same in full.

I am of the opinion that the counsel of complainant are right in their first position, and that the statements of the bill are sufficient at least to throw upon the defendants the burden of proving that they are bona fide purchasers for value without notice. I do not find it necessary to consider and determiné whether the fact, if it be a fact, that they paid to a previous holder full value without notice will protect them.

Next it was urged that the remedy of the complainant is at law and not in equity, and Barkalow v. Totten, 8 Dick. Ch. Rep. 573, is relied upon. But I think that the case in hand is distinguishable from that case. There an order had already been made authorizing the receiver to call in the whole amount of the unpaid subscriptions, and to enforce payment of such unpaid subscriptions by suit if necessary against each of the delinquent stockholders. That order was made upon notice to each of the defendants, and it was held by the learned vice-chancellor that such order having been made after notice to each of the parties, an action at law would lie against each severally, and an action against all jointly in equity could not be maintained.

Here there has been no such order made, and the very object of the suit is, in effect, to obtain a decree which will amount to such an order — that is, an ascertainment as to which of the stockholders have paid and which have not, and the amount necessary for each one to pay. The case thus viewed seems to come within the principles laid down in Wetherbee v. Baker, 8 Stew. Eq. 501, the only difference being that in that case the suit was brought by a single creditor, while here it is brought by the receiver, who represents all the creditors and is entitled to all remedies which they would have.

Finally, it was urged that the attorney-general is a necessary party by reason of the character of the corporation, which was formed, as is alleged, for the purpose of creating a monopoly in paper-making.

But I am unable to see why that feature gives the state' any interest in the present affair. The state, presumably, would be interested either in preventing the organization of such a corporation or in arresting its work after its organization. Here, however, the company is already dissolved, and therefore harmless. The present suit relates wholly to contractual and statutory obligations arising out of its existence and operations. Such obligations are not affected by its obnoxious character, at least such of them as are here involved. Such I understand to be the view recently expressed by Vice-Chancellor Reed in the American Tobacco Company Case.

I will advise that the demurrer be overruled upon the usual terms.


text:
    Robert H. McCarter, receiver, v. Edward L. Finch and Henry Finch, trading as L. R. Finch’s Sons.
    This court has jurisdiction, by summary proceedings upon petition, to compel the payment by a purchaser from an officer of the court of the agreed price of goods sold and delivered.
    Heard on petition, order to show cause, answer and testimony taken orally. .

      Mr. Frederic W. Ward, for the petitioner.

      Mr. James B. Vredenburgh, for the respondents.
   Pitney, V. C.

The petitioner is a receiver appointed by this court of the assets of a corporation named the Sherman & Lyon Company, upon proceedings in insolvency, and as such receiver made a written contract with the respondents for the sale to them, at a price named, of all the assets of the insolvent company. The contract declared that it was subject to the approval of the court, and such approval was had. The time fixed By the terms of the contract for payment having passed, the receiver applied by petition for an order on' the respondents to show cause why they should not be ordered to pay the purchase-money.

In proper season the respondents objected to the jurisdiction, and the question was reserved for consideration after the taking of evidence upon final hearing.

The objection, which was urged with spirit and earnestness, was twofold. First Because a suit in equity cannot be prosecuted by petition, but must be by English bill and subpoena. Second. Because the damages are unliquidated, and this court has no jurisdiction, even by bill, to ascertain the same against the protest of the respondents. In other words, that the suit lacks any equitable element.

In regard to the first objection: It seems to be settled by a long course of practice that a person who makes a contract with an officer of a court of equity respecting the subject-matter of a suit in that court, thereby becomes so far a party to the suit as to render him liable to be proceeded against in a summary manner, by motion, as to all matters arising put of such contract. Lansdown v. Elderton, 114. Ves. 512 (1808), where are cited Young’s Case, in the court of exchequer, and Andre v. Kaye, in chancery (November, 1791), in each of which an order was made upon a purchaser from a master of the court to complete his purchase or be committed; and Lord Eldon, on their authority, made a like order in the reported case. This authority was followed by Chancellor Kent in Executors of Brasher v. Cortland, 2 Johns. Ch. 505. In Requa v. Rea, 2 Paige 339, Chancellor Walworth acted upon the same principle in summarily setting aside a master’s sale in foreclosure, at the instance of the complainant and against the protest of the purchaser.

The doctrine of the New York cases just cited was approved by the court of appeals of New York in the case of Astoin v. Hubhell, 36 N. Y. 677, and the purchaser at a sale under foreclosure was compelled by summary proceedings to complete his purchase and pay over the balance of unpaid purchase-money.

Mr. Justice Story, in Wood v. Mann, 3 Sumn. 318, top, sanctioned the same practice. There, under a decretal order of the court, lands were sold by the master, and the purchaser, in conformity with a further decretal order, gave security to the master in the shape of a covenant, with a surety, to pay the purchase-money within fifteen days. The money was not paid, and summary proceedings were taken against the purchaser and his surety. And it was held that “ whoever makes himself a party to the proceedings of a court of equity, and undertakes to do a particular act under its decretal orders, may be compelled to perform what he has undertaken; that a court of equity may by attachment compel a purchaser at a sale by the master to complete his purchase by paying the purchase-money; and that a surety who has made himself a party to the proceedings is in the same predicament with the purchaser and may be proceeded against by attachment; and that it made no difference that the surety was not aware that in becoming so he subjected himself to the summary process of the court.”

In Shann v. Jones, 4 C. E. Gr. 251, the same doctrine was asserted by Chancellor Zabriskie, using this language: “A purchaser at a sheriff’s sale, when not a party to the original suit, is held to be made a party by the purchase so far as to be subject to the jurisdiction of the court on questions arising from the sale. Upon the same principle, he may be held to have a standing in court sufficient to be heard upon the subject of the disposition of the purchase-money while still in court, when a part has been paid by him and he claims a right to have it restored.”

The same doctrine was applied in Silver v. Campbell, 10 C. E. Gr. 465, where a purchaser at sheriff’s sale was compelled, upon a simple order to show cause, to complete his purchase.

And again, in Bowne v. Ritter, 11 C. E. Gr. 457, where Chancellor Runyon says: The ordinary method of compelling a purchaser, under circumstances such as are presented by this ease [purchase from a master], on a sale in partition to complete his purchase, is by order to show cause why an attachment should not issue against him as for contempt,” citing authorities.

Vice-Chancellor Van Fleet reiterated it in Snyder v. Blair, 6 Stew. Eq. 208 (at p. 210).

And Mr. Justice Depue, speaking for the supreme court, in Townshend v. Simon, 9 Vr. 239 (at p. 241), says : It may be assumed as an established doctrine of the court of chancery, that a purchaser under a decree, by the act of purchase, submits himself to the jurisdiction of the court as to all matters connected with the sale which relate to him in the character of purchaser. The sale may be set aside by an order in the original cause, without a new bill being filed, and the purchaser may appeal from such order, though he be not a party to the cause. It has also been held that the purchaser may be compelled to complete the purchase by a summary order in the original cause,” citing authorities for each proposition.

The latest illustration of the doctrine in New Jersey is the case of Boorum v. Tucker, 6 Dick. Ch. Rep. 135, where a petition was filed by the complainant in a foreclosure suit against purchasers at sheriff’s sale, praying that they should be compelled to complete their purchase by paying the amount bid. The answer set up that the title was imperfect, and the question of title was elaborately discussed and a decree for payment was made, which was affirmed on appeal in Hartshorne v. Boorum, 7 Dick. Ch. Rep. 587.

The first point must be overruled.

The second point is that the nature of the right to be enforced is such that an English bill would not lie, and that the receiver must proceed by action at law. The argument in support of this position is that there is no equitable element in the receiver’s cause of action, or other reason why the questions in litigation should be tried in this court, and hence that the receiver should be relegated to the proper jurisdiction, namely, a court of law.

The only distinction between the present ease and the cases already cited is that the present is a proceeding to compel payment for the purchase price of personal property while those cited are for the price of real property.

I am unable to find, in either of the authorities above cited, that the jurisdiction of the court was put upon the ground that the action was equitable in its nature, and therefore fit for the court of chancery. On the other hand, the language used by the judge is that power to deal summarily with the purchaser from an officer of the court arises out of the nature of the case and the situation of the parties, and the order in each case was simply that the defendant pay the money which, by his contract, he had agreed to pay.

The defendant relied mainly upon two cases — one decided in the court of errors and appeals and the other in this court. The first is Palys v. Jewett, Receiver, 5 Stew. Eq. 302. The petitioner there had been injured by collision with a railway train operated by the receiver, and petitioned the court for relief. The case was tried upon its merits, and the relief denied for lack of merit. The petitioner appealed, and the court of errors and appeals differed from the court below upon the merits and granted him relief, but accompanied it with a protest against the exercise of such jurisdiction by the court of chancery, and based its action, in finally giving relief, upon the ground that there had been no appeal by the petitioner from the order of the court below in refusing him permission to sue at law. I have always understood that the court was mistaken in supposing that there had been such an application for leave to sue at law and a refusal by the court below. Be that as it may, the ground .upon which the court based its opinion that this court ought not to have entertained jurisdiction was that this court could not, by reason of defective machinery, properly ascertain the damages.

On p. 305 the learned chief-justice says: “The general rule undoubtedly is that damages, as such, will not be ascertained in equity. Chief-Baron Gilbert, in his ‘Forum Romanum,,’ thus expressed this inability. • His words are: 'And it is a general rule that whenever the matter of the bill is merely damages, there the remedy is at law, because the damages cannot be ascertained by the conscience of the chancellor.’ This is the language of the decisions, both ancient and modern. It is true that there are exceptions to this rule, but those exceptions plainly show its generality and force. Such exceptions rest on the ground of a convenience very nearly akin to necessity.”

He then cites instances in which the court ascertained unliquidated damages in cases for specific performances of contracts, and then (at p. 3IT) sums up the result thus: “ It will therefore be observed, from this brief review of the more important of the authorities, that even when a contract has been broken, it was a general rule of equity, as it existed originally in England and at all times in this state, that where damages were of an intangible character they could not be admeasured under the authority of the chancellor. Nor am I aware that, with respect to torts to the person, it was ever so much as suggested within such jurisdictions that the compensation to be awarded in consequence of such malfeasance could, by force of any conjuncture of circumstances, be ascertained by a court of equity.”

Then (at ¶. 31%) he again refers to the question of damages. The damages,” he says, “ are not susceptible of any exact estimation, their only measure being an experienced judgment. It is universally admitted that, according to the theory in which our jurisprudence is founded, such questions are not adapted to the judicial methods of a court of equity. Such questions are universally, with this exception — if such exception exists — confided to the courts of common law. Such damages as these have always been assessed by a jury.”

It is evident, from this review of the decision in that case, that it turned entirely upon the nature of the inquiry, viz., unliquidated damages.

The respondents further rely upon the case of Barkalow, Receiver, v. Totten, 8 Dick. Ch. Rep. 573, in which a bill was filed by a receiver against several of the stockholders to recover the whole amount of unpaid subscriptions to stock of the insolvent company; and it was held by Vice-Chancellor Emery that a suit in equity would not lie; and the ground of his decision is that the contract to be enforced was one between the subscribers and the company itself, and not a contract made between the subscribers and the receiver as such.

To the same effect is the case of Freeman v. Winchester, 10 Sm. & M. 577.

The case of Receiver of State Bank of New Brunswick v. First National Bank of Plainfield, 7 Stew. Eq. 458, also cited by defendants, is distinguishable on the same ground. There was there no contract between the petitioner and the respondent' bank, and the decision went on the ground that the respondent bank had not become a party to the suit by any contract with the receiver, and that it was not a proper case for a petition as to one of the principal branches of the case. As to the other branch, it was a simple case of a debt from the respondent bank to the insolvent bank, which existed at the time of the appoint:ment of the receiver, and contained no element of equity.

None of these cases apply to or govern the case in hand. The element of unliquidated damages is not present. The amount to be recovered is a matter of computation upon a statement of accounts.

I therefore think that the court has jurisdiction to enforce this contract in the way proposed.

But if I had any doubt upon that question, the case as actu- . ally made shows that it is one that would have been a proper basis for an English bill in equity by reason of the complicated accounts which were developed.