text:
    Mary Walker v. Annie Estell Bourgeois and Anderson Bourgeois, her husband.
    [Decided August 28th, 1917.]
    1. Evidence held to warrant reformation of a deed on the ground of fraud.
    2. Gross inadequacy of price is convincing evidence of fraud.
    3. It is immaterial whether the defendant is principal or agent in perpetrating the fraud, since the principal cannot take advantage of the fraud of an agent.
    On pleadings and proofs.

      Mr. Samuel Craig Cowart, for the complainant.

      Messrs. Bolte, Sooy & Gill, for the defendants.
   Lewis, V. C.

The bill in this case is filed to compel the correction and reformation of a certain deed wherein it is defective either by reason of fraud, mistake or .misrepresentation, and for an accounting of the proceeds of any sale of a portion of the premises conveyed.

The original bill also prayed that the complainant might be decreed to have a perfect title in the tract of three thousand and seventiMwo acres and ninety-seven one-hundredths of an acre.

Upon demurrer, the prayer of the bill, wherein it sought to quiet the title was stricken out, and the theory upon which' the defendant has tried the case is, that unless the complainant shows fraud, misrepresentation or mutual mistake, then the bill must be dismissed.

The bill of complaint was filed by Mary Walker, the original complainant, on-April 17th, 1911. Mrs. Walker died testate on October 6th, 1911, and by her will dated December 10th, 1897, she devised the tract of land containing three thousand and seventy-two acres and ninety-seven one-hundredths of an acre in the township of Weymouth, county of Atlantic, and State of New Jersey, to her executor, Samuel C. Cowart, in trust, to-sell the'same and divide the proceeds of sale and distribute the same to certain devisees therein mentioned, viz., to Amelia H. Hanthorne, George W. Hanthorne and John Hanthorne one equal half share of the net proceeds of the sale of said lands; and .to Joseph Wolfe and Georgie Wolfe, the other equal one-half part of the net proceeds of the sale of said lands.

The executor and these devisees have been substituted as complainants in the case since the death of Mrs. Walker.

The grantee named in the deed was Bebecca S. Estell, mother of the defendant, Annie Estell Bourgeois, and mother-in-law of the defendant, Anderson Bourgeois, and the deed is dated October 1st, 1894, and was acknowledged by Mrs. Mary Walker on March 9th, 1895, before Anderson Bourgeois, one of the defendants, who admits that he also drew the deed and prepared the description in the same.

The testimony shows that Mrs. Mary Walker owned a tract of land consisting of three thousand and seventy-two and ninety-seven one-hunclredths of an acre in fee simple; and she also owned an undivided one-quarter interest in fee-simple in a tract of land 'known as the Frederick Steelman tract, consisting of about two thousand nine hundred acres, adjoining and lying to the south of the three thousand and seventy-two and ninety-seven hundrecltl)s-acre tract.

The three thousand and seventy-two and ninety-seven hundredths-acre tract came to her by partition of the land of John P. Walker, deceased, who was her husband’s brother, and who died intestate. This tract of land was partitioned to her-by the orphans' court of Atlantic county over thirty-seven years ago, her husband having devised all his real estate to her on his death, which took place over thirty-eight years ago.

The other tract mentioned consisted of two thousand seven hundred and fifteen acres, in which Mrs. Mary Walker was a co-tenant, having an undivided one-sixth interest, which would amount to four hundred and fifty-two acres.

The testimony shows that Anderson Bourgeois purchased as the agent of his mother-in-law the whole of the two thousand seven hundred and fifteen-acre tract, and the complainant' claims that he dishonestly .and fraudulently included in the deed, which he himself drew, a description which included six hundred and twenty-six acres of land which belonged to Mrs. Walker separately in fee, viz., to the three thousand and seventy-two-acre tract, which she failed to discover until 1909.

The description in the deed by metes and bounds covers the six hundred and twenty-six acres already mentioned, but the description of the land is followed by the following recital:

“Being all the right, title and interest of the said party of the first part of, in and to the said land or premises situate in the township, county and state aforesaid, which they are entitled to under the will of said Frederick Steelman, aforesaid, the whole being property heired by the grantors from John P. Walker, deceased.”

The other cotenant who signed the deed had no interest whatever in the six hundred and twenty-six acres, and leaving out the metes and hounds set forth in the deed there can be no doubt that the six hundred and twenty-six acres would not have passed by the deed.

The question for the court to pass upon, therefore, is whether Mrs. Walker intended to convey the six hundred and twenty-six acres, or whether that was included in the description by mutual mistake, or whether Anderson Bourgeois inserted the six hundred and twenty-six acres fraudulently, he, undoubtedly, being a very smart, keen business man, thoroughly acquainted with such business; and she, on the other hand, being, as I am convinced, a very simple-minded old lady.

The correspondence between Anderson Bourgeois' and Mrs. Walker shows that in purchasing this tract of land he represented to her that he was buying only her undivided share in the Frederick Steelman tract, and he did not in any of this correspondence intimate to her that he was purchasing any part of her separate Walker tract, and the agreement which he signed and sent to her for her to execute in duplicate, was also a representation to her that he was only purchasing her undivided share of the Frederick Steelman tract and not any part of her three thousand and seventy-two-acre tract.

The bill alleges that Anderson Bourgeois agreed to give Mrs. Walker $2 per acre for her undivided share of the Frederick Steelman tract, but that he only paid her $200 for all her interest in the lands conveyed.

The complainant’s undivided interest in the Frederick Steel-man tract amounted to about four hundred and fifty-two acres, and the complainant claims that under the agreement she should have been paid at least $900 instead of $200 or $250.

In regard to that contention of the complainant, it appears that the reason for selling the tract at such a low figure is that there had been some controversy as to who were the heirs of Frederick Steelman, and as to the quantity of the shares of the cotenants, and as to the number of the cotenants, and the parties who signed the deed-now in suit were willing to sell at a very low figure in order to avoid the cost of partition proceedings.

It may be mentioned at this point that Anderson Bourgeois also obtained deeds concerning the same tract from a number of other eotenants (the Frederick Steelman tract). It appears that Anderson Bourgeois did not. get all the cotenants to convey away their interest in one deed, although, of course, he might have followed that course.

I am inclined to believe that Mary Walker intended to sell her undivided interest in the Frederick Steelman tract for the consideration which was paid tó her, notwithstanding that I think Mr. Bourgeois made a most excellent bargain, and that will be my finding in respect to that.

In regard to the six hundred and twenty-six acres that she owned individually in fee simple, that is a very different proposition. -

It is shown that in 1893, two years before the date of the deed,. Anderson Bourgeois and his wife were agreeing to purchase from Mrs. Walker at the price of $é per acre, and which the defendants and Rebecca Estell were actually arranging to include with other lands in a sale to Daniel L. Risley at $5 per acre.

Two years after Mrs. Walker acknowledged the deed, she made her -will, and devised the tract of three thousand and seventy-two acres, tire six hundred and twenty-six acres being a part thereof, thus indicating that she did not know she had conveyed any part of this tract. She also paid the taxes right along up to the time of her death in 1911.. The property was wild land, and there was nothing to show that anyone else claimed to have an interest in it, except the deed, and I am quite satisfied that she knew nothing about metes and bounds.

I am fully satisfied that Mrs. Walker had not the faintest idea that she was conveying the six hundred and twenty-six acres by this deed, and the gross inadequacy of the consideration, to my mind, is convincing evidence of fraud, especially taken in connection with clear evidence of imposition and actual fraud practiced b} Mr. Bourgeois on Mrs. Walker, who undoubtedly placed the utmost confidence and reliance in him, and even trusted him to draw the deed. It is quite clear to my mind that none of the other cotenants who also joined with M-rs. Walker in signing the deed had any idea that any part of Mrs. Walker’s separate property, in which they had no interest, was being conveyed, and Mr. Bourgeois must have known it, as he was a man of largo experience and well acquainted with the properties.

“To reform a contract, and then enforce it in its new shape, calls for a much greater exercise of the power of a chancellor than simply to set the transaction aside. Reformation is a much more delicate remedy than rescission. Hence, in order to justify a decree for reformation in cases of pure mistake, it is necessary that the mistake should have been mutual. Where the mistake has been on one side only, the utmost that the party desiring relief can obtain is rescission, not reformation. The case is, of course, different, if any element of fraud, exists; for it has been properly held that where there is a mistake on one side, and fraud on the other, there is a case for reformation.” Welles v. Yates, 44 N. Y. 525, Hitchens v. Pettingill, 58 N. H. 386.

“To warrant reformation in the absence of fraud or imposition there must be mutual mistake.” Green v. Stone, 54 N. J. Eq. 387.

The question as to whether Mrs. Rebecca S. Estell was a principal and Anderson Bourgeois was merely her agent, or whether Anderson Bourgeois was the principal and Mrs. Rebecca S. Estell merely a^ trastee, can make no difference, as she could not take advantage of her agent’s fraud.

1 will, therefore, -advise a decree providing for the reformation of the deed in accordance with the above views, and providing, further, .for the payment by the defendants to the complainants of the value of those portions of the premises which have come into the hands of innocent purchasers for value without notice, with interest upon such amounts, compounded at six per cent, annually. " . .

As to the value of these lands which have come into the hands of innocent purchasers the testimony shows that by the defendant Bourgeois’s offer made about two years before the time of the conveyance, they were of the-value of $4 an acre.

I think, therefore, the valué of these lands was at least that amount, and if the complainants are satisfied that that represents the fair value of these lands I will fix the amount of the decree upon that basis. If they are not so satisfied, then I will refer it to a master to take testimony as to the actual value of the lands at the time of the conveyance to Mrs. Estell.

I will, on application, settle the details of the decree.


source: Caselaw Access Project

author: Lewis, V. C.

license: Public Domain

text:
    Hattie Andreas, petitioner, v. Wendel Andreas.
    [Decided September 18th, 1917.]
    1. Allowance of permanent alimony is usually about one-third of the husband’s income, including' the income of the wife, but there is no fixed rule to that effect, and the allowance does not include the amount allowed for support of the children.
    2. The fact that the husband’s property is largely unproductive of income should not defeat the administration of justice, and Ms property should be treated, for tile purpose of alimony allowance, as. if it produced a fair return on the amount of investment.
    3. Where a wife obtained a divorce for the cause of adultery and the husband married the guilty woman, alimony of $3,200 per annum for wife and child is not excessive, even though the husband’s investments are not immediately productive of an incojne proportionate to his investment, and the wife has a separate estate of $11,000.
    Exceptions to master’s report on alimony.

      Messrs. Vredenburgh, Wall & Carey, and Mr. W. H. Carey, of counsel, for the petitioner.

      Messrs. McCarter & English, and Mr. Arthur Egner, of counsel, for the defendant.
   Lewis, V. C.

The master has reported that the sum of $3,200 a year should be decreed as alimony for the petitioner and the maintenance of the daughter of the petitioner and the' defendant, the daughter being in the custody of the petitioner. The defendant excepts to the report, mainly on the ground that the allowance is excessive.

The property of thé defendant consists of farm land situate at Teaneck, Bergen county, in the State of New Jersey. There are all together eighty-eight and one hundred and eighty-five thousandths acres. The tract is located adjoining lands of the estate of William Walter Phelps, and is bounded on the north by West Englewood avenue — the principal road running from the Biver road to the West Englewood station on the West Shore railroad — an<j by a tract of about sixteen acres lying west of the Biver road between that and the Hackensack river, included in the eighty-eight and .one hundred and eighty-five thousandths acres. The land wést of the Biver road is swampy in part — the map shows two small streams running into the Hackensack river.

At the time of the taking of the testimony a strip two hundred feet wide, containing eleven acres, running along the entire northerly side of the property, east of the Biver road, was owned by petitioner, but that was sold to the defendant by petitioner on July 20th of this year for the sum of $11,000, as appears by the stipulation on file.

By that-sale the defendant’became the owner .of all'the land south of West Englewood avenue, arid extending along that avenue two thousand five hundred and sixty-two feet.

It is nearly all fine upland; and is about one thousand three hundred feet in width on the easterly end, and about one thousand two hundred feet in width on the westerly end.

The buildings on the property consist of (1) a large dwelling-house, with a large barn west of the. Biver road; (2) a dotiblehouse, known as a two-familv house, a barn and some small buildings on the east of the Biver road.

The eleven-acre tract conveyed to the defendant by the petitioner had no buildings on it, and was a strip, two hundred feet wide running the length of the property from the River road eastward, and constituted the entire frontage on West Englewood avenue.

The master finds the value of all the real estate for the purpose of .this inquiry at the sum of $103,500.

The master also finds that, the defendant’s undisputed annual income from his personal property is $5,693. This income is derived from United States four per cent, bonds; New York City three and one-half per cent, bonds; New York'Central four per cent, bonds; Michigan Central four per cent bonds, and shares of Wharf Company stock.

■ The master, in fixing the alimony, assumed that under the law the defendant’s income from the bonds should be considered as though he received five per cent, interest, on the theory that he could, if he wished, sell the bonds and invest the money at five per cent, interest in some investment that was perfectly safe, and that if he chooses to keep his money invested in the bonds, his wife and child must not be allowed to suffer thereby.

. In regard to the defendant’s real estate, the master charges him with five per cent, interest on the value of it, in spite of the claim of the defendant that he is unable to sell it or to secure any income out of it, the defendant claiming that at the present time it is a burden rather than a source of income to him.

The master also finds that the defendant should be required • to give security in the sum of $35,000, and that such security could be given by him without hardship or embarrassment by requiring him to deposit with the clerk of this court; or some trust company designated by this court, bonds now held by him of the par value of $30,000, and permitting payment of the interest accruing ’thereon to the defendant so long as the order of this court with respect to the payinent of alimony shall be faithfully performed. Or, at the option of the defendant, he might be required to give to the petitioner his bond for the sum ■ of $35,000, conditioned for the payment of alimony, pursuant to the order of this court, such bond being secured by a mortgage upon defendant’s real estate with a like condition.

The master also finds that the defendant should pay the sum of $400 to the petitioner for counsel fees.

In estimating the amount of alimony to be allowed the case of Bennett v. Bennett, 59 Atl. Rep. 245, seems to sustain the master’s finding that the actual rate of interest received by the husband on his personal property is not the criterion which should govern the court, but that the wife is entitled to have her alimony calculated at the legal rate of interest. The master seems to have split the difference.

The defendant does not receive one cent of profit from his real estate, and claims that this should not be considered in estimating the amount of alimony until he is able to get something out of it.

The case of Boyce v. Boyce, 27 N. J. Eq. 433, decided that the alimony is to be fixed at what the wife would have the right to expect as support if living with her husband. Of course, a husband is required to support his wife and children in a manner suitable to his means and ability, and a woman who is living happily with' her husband is not very apt to go to. court to secure a more liberal maintenance, simply because her husband is holding his real estate for speculative purposes and neglecting to farm or rent it. However, a wife who has been greatly wronged by her husband,, and who has been compelled to secure a divorce from him on the ground of adultery, as is the fact in this case, stands in a vastly different position. It would be'impolitic and unfair to allow the husband to get off lightly under such circumstances. He is now married to the lady who caused the trouble. However, under the case of Hall v. Hall, Dock. 31. 703, April 13th, 1910, it was .held that excessive alimony cannot be awarded by way of punitive damages, to penalize the defendant for his extreme cruelty to the wife.

Although there is no matter-of-course rule, the allowance for permanent alimony is usually about one-third of the husband’s income for the wife’s own support, but this one-third should not include the amount which ma.y be.fixed for 'the support of the offspring.

The defendant contends that the master erred in considering the real estate owned by the defendant, upon the present application, and in basing his estimate of alimony in part upon the value of the real estate, urging that only when the real estate is sold and the defendant’s estate thus increased, can it be an element to be considered in the alimony.. He also contends that it is a great injustice to him that he should be charged with five per cent, interest on the value of his real estate, when, he says, it is not only most apparent that he is unable to sell his real estate, but also that he is unable to secure any income out of it, so that at the present time it is a burden rather- than a source of income to him.

The question then simmers down to this simple proposition: the defendant’s real estate is very valuable; he states before the master that he is willing to sell it for $71,000; whether he would do so or not has not been tested; the master places the value at $103,000; the three real estate experts produced by the wife place a very much higher valuation on the real estate than does the master, that is to say, between $5,000 and $10,000 higher than the master’s estimate. The only real estate expert produced by the defendant fixed the value of the real estate at $77,100. The defendant does not reap one cent of profit from this large tract of land and the buildings thereon; as I have said already, it is admittedly very valuable, and he apparently is not willing to sell it until he can 'get a high price. It seems to me, under these circumstances, that the language of Vice-Chancellor Dodd, in the case of Close v. Close, 25 N. J. Eq. 436 applicable to this case:

“The only difficulty I have had in fixing upon a sum of per- - manent alimony grows out of the condition and character of his estate. But I am satisfied that the situation in which he has brought it, or designedly suffered it to be, cannot be allowed to defeat the manifest justice of the case.”

In order to be not unduly oppressive the master based his estimate of the amount of alimony for the wife, and the maintenance of the child, at the price of $71,000, this being the price at which the defendant offered to sell. At five per cent, this would produce $3,550; added to this, the present income from his personal estate, $5,683, would give a total of $9,243 as the total upon which to calculate alimony.

There is another element which must be considered in estimating the amount of the alimony to be allowed, viz.:

“The wife’s income is, as explained in other connections, always an element in the alimony computation. The method is to add it to her husband’s, consider what under all the circumstances should be allowed her out of the aggregate, then from the sum so determined deduct her separate income; and the remainder will be the allowance to be given her. Also, any other means of support possessed by the wife will be carried into the account.” 2 Bish. Mar., D. & Sep. 403.

During the progress of the suit the petitioner received from the defendant the sum of $11,000 for a strip of land which he had formerly conveyed to her, and which she resold to him. In his report the master has charged her with interest at five per cent., so the requirements of the case have been complied with in that respect.

The master has gone into this case most thoroughly, and I do not think his report can be improved upon. To my mind it is eminently fair and just to all the parties interested.

The exceptions will be overruled.


text:
    Charles A. Moran, as trustee under the will of Thomas Webb, for the benefit of Hamilton J. Davis, v. Millicent S. Denton, Henry M. Denton, Charles M. Horton, Nathan J. Taylor and James Dailey.
    [Decided October 5th, 1917.]
    If a debtor, in failing circumstances, convey his land for an apparently inadequate consideration to a creditor in payment of a debt, the burden is on the grantee to show that the sale was bona fide, and unless it is clear that it was, the sale will be set aside upon equitable terms.
    On pleadings and proofs.

      Mr. Richard Doherty and Mr. Lewis Karaseh (of the New York bar), for the complainant.

      Messrs. Durand, Ivins & Carton, for the defendants.
   Lewis, V. C.

This is a bill in aid of an execution. The following facts have been established: Millicent S. Denton owned property in Avon, Monmouth county, New Jersey, the same being lots 147, 148, 14-9, 150 and 151 on the map of Avon. On December 27th, 1910, Mrs. Denton became indebted to Annie A. Moran in the sum of $6,000, for which she gave her bond,- secured by a mortgage on property in the borough of Bronx, New York,, which bond and mortgage, -by assignment dated November 17th, 1911, were set over to complainant; the mortgage was foreclosed and judgment of deficiency was. recovered in the New York supreme court; and on February 3d, 1915, a suit was brought in the New Jersey supreme court on the deficiency judgment; and on March 12th, 1915, a judgment was recovered in the New Jersey supreme court by Charles A. Moran against Mrs. Denton for $6,731.47, thereupon execution was issued on April 27th, 1915, to the sheriff of Monmouth county, who, for want of goods and chattels, lands and tenements whereon to levy, returned the writ wholly unsatisfied. *

On May 29th, 1912, Mrs. Denton conveyed lot No. 147 to Nathan J. Taylor; and on October 20th, 1913, she conveyed all the other lots mentioned to Charles M. Horton.

The bill charges that these conveyances were made in fraud of the complainant, and that, in furtherance of the schem'e of fraud, Nathan J. Taylor, on March 19th, 1915, conveyed lot No. 147 to Charles M. Horton, and Horton then conveyed all five of the lots to James Dailei, who thereupon executed a mortgage to Taylor for $3,700 and then reconveyed all five of the lots to Horton; the complainant charges that the conveyances were without consideration, and made to defraud the complainant, and prays that said conveyances be set aside as fraudulent against him and that the land should be sold to pay his judgment debt.

The undisputed facts axe that at and prior to May, 1912, Mrs. Denton owned the property in question, comprising five lots and buildings thereon, located at the northeast corner of Woodland and Second avenues, in Avon, lot No. 147 having a small cottage and stable thereon, and there being also a larger cottage, with garage or stable in the rear, on lots Nos. 149, 150 and 151. She also owned some real estate in New York City, which depreciated considerably in value and caused her financial embarrassment.

Some time prior to May, 1912, the defendant, Nathan J. Taylor, loaned to Mrs.'Denton $2,000 on her note, which was to be repaid when due, and upon Mrs. Denton’s failing to meet it, Taylor, by his agent, George W. Pittenger, insisted upon having a deed for lot No. 147, being the small cottage property, on which there was at that timé a mortgage, held by one. William Taylor, for $3,500.

On December 19th, 1912, Mrs. Denton borrowed from Rebecca Mears $5,000 on her mortgage on the larger cottage property, and lots 149, 150 and 151.

On July 17th, 1910, Mrs. Denton borrowed from the defendant, Charles M. Horton, her nephew, $4,000, and later, on May 8th, 1911, she borrowed from him an additional $6,000, on which she .paid him interest to October, 1913. He then demanded security, and she gave him. a deed for lots-'Nos. 148 to 151, inclusive.' This deed he did not record immediately, because, as he testified, he hoped that. Mrs. Denton might be able to repay him, but finding that she was unable to do so, he recorded his deed on June 15th, 1914.

In December, 19.15, Mrs. Mears, the holder of the $5,000 mortgage covering lots 149, 150 and 151,' having died, her executors demanded payment of her mortgage and the arrears of interest on her mortgage, the taxes and other charges against the property amounting at that time to about $1,700, and in' order to prevent foreclosure and a sale of the property for taxes, the defendant, Nathan J. Taylor, finally agreed to advance the $1,700 necessary to pay these charges on the property and to take a mortgage on the five lots for $3,700, made up of his. $2,000 and this additional $1,700; and Horton, in order to avoid putting up the money to take up the Hears’ mortgage and pay the taxes, accepted this proposition; and to carry it out and so as to avoid the giving of a bond by him (Horton), Taylor conveyed by deed dated December 23d, 1914, lot No. 147 to Horton; and Horton, by deed of the same date, conveyed the entire property to Dailey; and Dailey then gave a mortgage on the entire property to Taylor for $3,700, dated January 29th, 1915; then Dailey, by deed of the same date, January 29th, 1915, reconveyed the entire property to Horton.

’ All these papers were delivered to Mr. Carton, who had' charge. of the transaction, and the transaction was closed by him March 18th, 1915, _ and all the papers on that day were sent by him for record, and were recorded on March 19th, 1915.

Nathan J. Taylor and Charles M. Horton are both men of considerable- means. I have no- doubt that they advanced the consideration for the deeds to them as testified to by them.

However, it is settled law that if a debtor, in failing circumstances, convey his land for a consideration apparently inadequate, to a creditor, in payment of a debt 'due him, the burthen will be thrown on such creditor to show, by full proof, that such transaction was bona fide; and if the honesty of such conveyance be left in doubt the sale will be set aside upon equitable terms. Demarest v. Terhune, 18 N. J. Eq. 532.

And in that case the conveyance was set aside with directions that the land should be sold, the proceeds of Such sale to be applied, in.the first place, to pay the debt due to- the creditor who held the conveyance, and after the payment of the costs of both parties, then to the satisfaction of the judgment of the complainant.

My conclusion is that the honesty of the conveyance is left in doubt and the sale will be set aside upon equitable terms.

In addition to the foregoing I have reached the conclusion 'that at the time when Mrs. Denton gave the deeds to Nathan J. Taylor and to Charles M. Horton, they were given merely as security for the debts which she owed them. Both Taylor and Horton asked for security and Mrs. Denton testified that .she gave them the deeds as security. The fact that Horton and Taylor did not convey away the property to an innocent purchaser is a fact very much in theix favor, as there is no doubt such a deed from either one of them would have been perfectly good.

The complainant’s counsel insisted that by reason of the conveyances recorded March 19th, 1915, that he had acquired a lien upon the property superior to the mortgage to Taylor for $3,700, and that the title or interest of Horton in the property was also subservient to complainant’s judgment.

I find nothing to sustain this, contention, and I shall,- therefore, advise a decree that in the absence of satisfactory proof of actual fraud the transfers by Mrs. Denton will be sustained to the extent of the consideration actually given and declared void as to the residue.

I will fix the terms of the decree on application.


text:
    Edna G. Irwin v. James W. Irwin.
    [Decided October 4th, 1917.]
    Under the evidence in this case — Held, that the wife was not guilty of extreme cruelty to her husband and that he must therefore support her, although, of course, he is not obliged to live with her.
    On pleadings and proofs.

      Messrs. Mackay & Mackay, for the complainant.

      Mr. Borden D. Whiting, for the defendant.
   Lewis, V. C.

This is a bill for maintenance under the twenty-sixth section of the Divorce act, which provides, inter alia, that where the husband abandons and neglects and refuses to support his wife, it shall be lawful for the court of chancery to decree and order such suitable support and maintenance as the nature of the case and circumstances of the parties render suitable and proper, in the .opinion of the court, and to compel the defendant to give reasonable security for such maintenance and allowance, &c.

I find the following facts to be established: The complainant is a woman about twenty-eight years of age; she is in fair health, and was engaged, in business previous to her marriage. There are no children, the only child having died within a few days of its birth. The husband was the one to leave the home, and to justify his conduct in doing so, he claims that the-treatment he received from his wife was of such a cruel character that it was quite impossible for him to live with her. The court, however, has reached the conclusion that the wife’s treatment of her husband did not amount to extreme cruelty, and although he has the privilege of living apart from his wife, if he sees' fit, it still remains his duty to support her “for such time as the nature of tlie case and the circumstances of 'the parties render suitable and proper in the opinion of the court.”

“To justify the abandonment of a wife and also refusal to support her, the husband must show 'the wife to have been guilty of a matrimonial offence such as will entitle him to a divorce.” Bradbury v. Bradbury, 74 Atl. Rep. 150.

That a wife is extravagant, lazy, quarrelsome or intemperate, or neglects her duties, spends most of her time gossiping with neighbors, receiving attentions from men, or even going to saloons evenings.with them, has been held insufficient to justify the husband in leaving his wife and refusing to support her. Boyce v. Boyce, 23 N. J. Eq. 337; Bradbury v. Bradbury, supra.

The defendant is a man of good character, and of mild disposition. At the time of his marriage to the complainant he was living at Oradell, New Jersey, with his'widowed mother and his sister, who were in part, dependent upon him for their support. He owned the Oradell home, to which he brought his bride, and is in comfortable financial circumstances. She did not get on well with the mother and sister, particularly the latter. The wife says that the husband talked over affairs with his mother and sister, and not with her, and the testimony indicates 'that she was not given her proper place in the houséhold at the outset. Things came to such a pass that finally the wife told the husband that .it was a case of his mother and sister or herself having to go. The mother and sister then left the house, and the husband continued to help to support them.

The defendant seems to be a man that controversy of any character is distasteful to, and the wife high-spirited and keen to resent slights; and even after the removal of the mother and sister, matters grew still worse. The wife says the husband called her “common" He denies this, but says that he did characterize some of her remarks as “common talk." The wife wanted the Oradell house sold so' that they could remove to New York. The husband- acceded to her wish in this matter and put the house up for sale. Their troubles, however, continued. There was a difference of nearly twenty years between the ages of the respective parties, and there is no doubt in my mind that their difficulties arose through incompatibility of temper. She did not know what she wanted, and he had no great knowledge of the female sex. She evidently desired to bo made much of, and if he had seen to it that she had a reasonable amount of affection, I think their dissentions would have ceased, especially when the mother and sister were not there to criticise' her. She was, undoubtedly, a woman of hasty tenk per, and she had to relieve her mind in some way. The husband says that on one occasion' she tried to 'push him downstairs; on another occasion that she tried to throw a chair at him; he also says that she threw a carving knife at him, which he managed to dodge; and that repeatedly, in anger, she came towards him with a knife, threatening to kill him, as well as herself, and that he took the knife from her> he also testified that she threatened him with a nail file, and in his struggle to take it from her the file was broken; that she also got possession of his revolver several ■ times' and threatened to end the lives of both of them.

Mrs. Irwin denies her husband’s story and claims that at the time she had the carving knife and the revolver in her hand were occasions on which she threatened to take her own life, and that her husband took the articles away from her.

Finally the husband wrote to the wife as follows:

“Dear Edna: — •
“I regret that I find that it is impossible for us to live together hereafter.
“I have in the past pleaded with you to behave, and I told you, time and again, that things could not go on as they were, but it did no good and I could stand it no longer.
“Hereafter we will live apart and I advise you to go home to your father. * * *
“Please remove your personal belongings from the house as soon as possible, and I will take away my clothes and close up the house.
“Sincerely,
“James.”

I have come to the conclusion, after carefully observing the demeanor of both the complainant and defendant, and the testimony given in this cause convinces me that the only effect on the husband of the wife’s conduct has been to turn away his love, which the evidence does not disclose was very pronounced for her. I do not believe that he has ever been the least bit afraid of her,’ or that he ever thought for one second that she would harm him. To a man of his disposition she was, of course, a trial, but that her conduct amounted to extreme cruelty, I am unable to see. If the complainant had become insane the defendant would still have to support her. 'A man cannot get rid of his obligation to support his wife merely because they are always quarreling. In my opinion, she has committed no matrimonial offence for which he could obtain a divorce, and the wife is, therefore, entitled to a decree.


text:
    Commercial Trust Company v. L. Wertheim Coal and Coke Company et al.
    [Decided November 8th, 1917.]
    1. Under the evidence in this case — Held, that the chattel mortgage was a lien against creditors on book accounts that arose after the date of the mortgage, and as to after-acquired chattels.
    2. A lien for taxes, under the evidence in this ease, has priority in the proceeds of the chattels sold.
    On bill, &c.

      Mr. Willard C. Fisk, for the complainant.

      Messrs. McDermott & Enright, for the defendant Albert I. Drayton, trustee in bankruptcy of L. Wertheim Coal and Coke Company.

      Messrs. Vredenburgh, Wall & Carey, for the defendants Warren Delano and Mill Creek Coal Company.

      Mr. Eugene Leake, for the defendant William T. Payne.

      Mr. Pierre P. Garven, for the defendant William D. Dann.

      Messrs. Collins & Corbin, for the defendant Lehigh Valley Railroad.
   Lewis, V. C.

The bill- in this case was filed to foreclose a mortgage made by L. Wertheim Coal and Coke Company to the Commercial Trust Company to secure a bond issue of two hundred and fifty bonds of $1,000 each. The mortgage was dated and recorded on May 6th, 1912. On September 16th, 1914, the Wertheim company was declared a bankrupt, and the trustee in bankruptcy filed an answer and cross-bill to the bill to foreclose, in which he claimed:

1. That the Wertheim Company was actually insolvent upon a proper analysis of its books and balance sheet of March 31, 1912.
2. That the proper analysis which the trustee has in mind is the marking down of various asset items, viz..: trestle, buildings, leasehold, claim against Wertheims, Adams’ mortgage.
3. That the mortgage is wholly void as against creditors generally, irrespective of the fact whether the creditors’ claims all came into existence long after the date of the mortgage or not.
4. That the affidavit attached to the mortgage does not state the true consideration within the requirements of the Chattel Mortgage act.
5. That the mortgage was given in contemplation of insolvency.
6. That the officers who authorized the mortgage were directors, and had a self interest.

The undisputed pertinent facts in tbis case are as follows: “By leases, dated "June 12th, 1906, and April 30th, 1908, the Lehigh Valley Railroad Company leased to the defendant corporation certain real estate in Jersey City to be used as a coal yard. The terms of these leases were for fifteen years from November 1st, 1906, and the annual rental reserved was one dollar per year, with the right reserved to the lessor- to terminate the lease on giving not less than one year’s, written notice if the leased lands should be required by the lessor for railroad purposes. Under the lease of April 30th, 1908, it was further provided that the lessee should pay all taxes and assessments to be levied and assessed upon all buildings and property placed upon the demised premises, and in case of failure to pay such taxes after -the same became payable, .the right was reserved to the lessor to pay the same and to recover the taxes from the lessee in the same manner rent was recoverable. In the event of breach of eovenant’of the lease the right of re-entry was reserved to the lessor, and a like right was reserved if the property was-taken in execution or attachment by creditors, or .an assignment for .'the benefit of creditors should be made if the lessee should become bankrupt. There were further conditions giving the lessee the right to remove any structures placed there by it upon the property if the same could be removed without damage to the land; and a covenant by the lessor in the event of the termination of the lease, by notice or otherwise, to purchase the improvements placed' on the land by the lessee, and valuation to be fixed by agreement or by arbitration not exceeding $30,000 for the first five years of the term; $25,000 for the second five years, and $20,000 for the last five years of the term. Improvements .by way of railroad trestles, office buildings, stables, &c., were placed on the land by the lessee at its expense, the cost of these improvements being greatly in excess of the amount at which the lessor in the lease agreed to take them.

On May 6th, 1912,' the Wertheim company executed a trust mortgage to the complainant to secure an issue of bonds, including in the mortgage the coal trestles, buildings and other improvements placed on the leased land, but excluding the leases themselves, which were, under their terms, non-assignable.

On December 20th, 1913, taxes for the years 1913.-1914 upon the improvements on this property became payable to Jersey City, and under the thirty days’ clause of the lease should hav.e been paid by January 19th, 1914. The Wertheim company defaulted in the payment of these taxes and has never paid them.

On September 16th, 1914, default having been made under the mortgage, the complainant’s bill to foreclose was filed in this cause, and on the same date receivers were appointed with directions to take possession of the mortgaged assets and to collect in the assets to be held by the court pending foreclosure. The receivers qualified, and on. September 17th took actual physical possession of the coal trestles, office buildings and other structures on the leased lands.

At about noon on September 17th, 1914, the railroad company caused a notice of termination of the lease to be served upon one of the officers of the Wertheim company; and subsequently, on the same day, attempted to take possession of the trestles and other buildings in question, but found the receivers appointed by this .court then in actual physical possession of the property.

On September 25th, 1914, the railroad company paid to Jersey City the tax which became due December 20th, 1913. '

On December 17th, 1914, as already set forth, an involuntary petition in bankruptcy was filed against the Wertheim company and on that day a receiver was appointed and qualified.

Prior to November 1st, 1914, the Lehigh Valley Kailroad Company sent a bill to the Wertheim company, which was received by the receivers, dated November 1st, 1914, being a bill for the rent of the site for the coal trestles and yard in Jersey City for one year, the term ending October 31st, 1915, with directions to forward payment to the treasurer of the company at Philadelphia. This was the annual rental reserved under the lease for the year ending November 1st, 1915. The receivers forwarded the amount of the rent and received back a receipt therefor, dated November 4th, 1914, which they now hold.

The Lehigh Valley Eailroad Company has also filed a cross-bill asking that it be decreed that the railroad company is in lawful possession of the trestles and permanent structures on the leased property, and has beén in puch possession since September 17-th, 1914; or in the event that the court should decree that'the railroad company has not been in possession-since September 17th, 1914, that it then decree that the railroad company has a prior lien on the proceeds of sale of the chattels under foreclosure for taxes and interest thereon paid by the railroad company subsequent to September 17th, 1914.

On and prior to December 15th, 1909, two of the defendants, Max Isenstein and William Dann,- were stockholders, and the vice-president, secretary and treasurer, respectively, of the L. ■Wertheim Coal and Coke Company.

Isenstein owned stock for which he paid $32,500; and the defendant Dann owned stock for which he paid $57,000. Thesec two defendants owned the majority- of- the stock of the Wertheim company. The company was also indebted to the defendants Isenstein and Dann'in the sum of $24,000 and over. At this time the defendants were receiving as salary the sum of $10,000 a year for their services as officers of the company.

There was some dissatisfaction between Saunders Wertheim and these men, Saunders Wertheim alleging that these men were not practical coal men, and he felt that $10,000 paid _ them could be saved to the company if these men could be eliminated and practical coal men installed in their places.

Isenstein and Dann wished'to have the company repay to them the indebtedness of $24,000, and Saunders Wertheim suggested that he would get a purchaser to buy this stock held by Isenstein and Dann, and they stated that they would retire from the company and sell their stock at fifty cents on the dollar provided they were repaid the amount of money which they had loaned to the company.

Saunders Wertheim went to Mr. Delaho and apprised him of the condition of affairs of the company, and spoke to him about the elimination of Isenstein and Dann. Mr. Delano told the Wertheims to make the best terms they could with Isenstein and Dann and he would procure for them a credit or a loan of $20,000. '

On- December 15th, 1909j Isenstein and Dann resigned as officers of the Wertheim company.

On December 17th, ¡L909, by arrangement, Isenstein and Dann went to the office of the attorney of the Wertheim company, and were told to resign as directors of the company, and they did so. At ten o’clock of that day Messrs. Delano, Payne and Yan Buskirk were elected directors of the company, in place of Isenstein and Dann, and at eleven o’clock of that same day, Mr. Delano was elected vice-president of the company.

After Isenstein and Dann had resigned as directors they were requested to leave the room, and when they returned they received from the company’s attorney a check for $20,000, which they immediately cashed, each receiving one-half of the proceeds. Isenstein received twenty-eight notes of the company for $1,000 each, and Dann received thirty-two notes of the company for $1,000 each, and they thereupon endorsed the stock in blank and surrendered it to - the. company’s attorney. It was understood at that time that the $20,000 cash was to be accepted in satisfaction of the amount due from the company to the defendants Isenstein and Dann for moneys advanced by the defendants to the company, and the notes aggregating $60,000 were to be accepted in payment of the stock aggregating $96,000 held by these defendants, Isenstein and Dann. The notes, which aggregated about $60,000, were to be paid off at the rate of $1,000 per month; the defendant Isenstein to receive $1,000 one month, and the defendant Dann to receive $1,000 the following month, and so on until the notes were fully paid. The notes were not issued by the Wertheim company until after the' election of Delano and Payne and Van Buskirk as directors of the company in place of these defendants, who had previously ' resigned.

The situation on December 17th was that the Wertheim company purchased $96,000 worth of stock of Isenstein and Dann at fifty cents on the dollar and issued the notes in payment thereof.

By the purchase of stock of Isenstein and Dann the company was able to borrow the sum of $20,000 for which it pledged as collateral" security the stock purchased from these defendants, and paid in full the indebtedness due Isenstein and Daim for moneys loaned to the company at various times.

Isenstein and Dann had been out of the board of directorate two years and several months at the time when the mortgage was given and the bonds issued, and their knowledge of the issuance of the bonds was first obtained through the attorney of the Wertheim company, who notified them to come to Jersey City and exchange their notes for bonds, which they did. •

The first question is, whether at the time of the mortgage the corporation was actually insolvent, as shown by a comparison of its assets and liabilities.

The trustee in bankruptcy contends that the Wertheim company was unable to pay its maturing debts in due course and had actually defaulted upon its promissory notes; that the effect of'the mortgage was to transfer to the mortgagee every transferable asset as security for a debt, which far exceeded the value of the assets, leaving the corporation wholly without assets on which it was fairly entitled to seek future credit; that the directors, nevertheless, actually intended the corporation to continue in business by seeking certain new credit, although they must be chargeable with knowledge that the corporation would have no asset with’ which to pay such new debt unless either the bondholders permitted the mortgage security to be exhausted for that purpose, or the corporation reversed its prior existence and made profit, out of which to pay such debt; that the burden of proof of the legality of this mortgage, at least to the extent, of the bonds held by the companies represented by Mr. Delano and Mr. Payne, rests upon them since the directors in executing the mortgage were virtually-dealing with themselves.

I am unable -to accept these -propositions of the trustee in bankruptcy. I have again examined the testimony and given consideration to the arguments in this case, and have reached the same conclusion regarding them-entertained at the termina^ tion of the oral hearing before me.

The proofs of- insolvency are neither clear nor satisfactory. The action of Delano and Payne and the companies which they represented was, in my judgment, characterized by good faith and fair dealing.

I do not think, from the evidence before me, that this court would have been justified in appointing a receiver in May, 1912, the date of the bond issue; and this-is a test which has been applied in some cases.

But, aside from this, at the time of the hearing, no creditor was in existence whose claim had accrued before the mortgage was made. They owed no one, and in the year immediately preceding the bond issue they had made a net profit of $5,550.81.

. The concern was an active one, and the evidence does not indicate a well-laid plan for the cessation of activities. It had never stopped business, and had enough assets to pay its debts if it had liquidated at the time of the bond issue.

The project did not emanate from Delano or Payne. It was brought to their attention by the Wertheims and their counsel, Mr. Eugene Leake. It was conceived for the benefit of the Wertheim company, and there is nothing which shows that the Mill Creek Coal Company or the Payne company improperly secured anything from it or profited on the coal sold.

The plan resulted in the doing away with the large salaries payable to Isenstein and Dann, and released their claims against the Wertheim company.

Immediately upon the entrance of the new interests into the Wertheim directorate regular audits were made of the business, and the business generally conducted in an open and up-to-date manner.

I cannot agree with the view advanced that the life of the Wertheim company was improperly extended by the entrance of 'Delano and Payne, or by the financial project which they undertook upon the suggestion of the Wertheims and their counsel. Both continued furnishing it with coal for some time after the making of the mortgage, and the company went right on with its ordinary business. ’

The fact that money is needed to finance the corporation or to continue its life, does not mean that it is compelled to close its doors; and there was every indication that when the mortgage was made, the corporation, if let alone, would have succeéded and progressed.

The trustee in the case under consideration represents only creditors who have sold to the Wertheim company knowing the mortgage was recorded. They, therefore, had notice. There certainly is nothing fraudulent in this aspect of the case.

There is nothing presented that leads me to the belief that insolvency was contemplated. • The mortgage undertaking was for the purpose of continuing the business under more advantageous circumstances than those which had hitherto prevailed. Bergen v. Rogers, 73 N. J. Eq. 238; Empire State Trust Co. v. Fisher, 67 N. J. Eq. 602; Wright v. American Finance and Securities Co., 93 Atl. Rep. 862; Regina Music Box Co. v. Otto, 65 N. J. Eq. 582; Cope v. Walton & Co., 79 N. J. Eq. 165; Cogan v. Conover Mfg. Co., 69 N. J. Eq. 809.

Another point of attack by the trustee is as to the sufficiency of the mortgagee’s affidavit of consideration. I have examined the affidavit in connection with the mortgage, and it seems to be in substantial compliance with the statute. It not only refers to the mortgage,' but in express language sets forth the terms of this instrument and 'the cause of its execution. The plan relating to the issue of bonds is also clearly explained'. Fletcher v. Bonnet, 51 N. J. Eq. 615; Camden Safe Deposit Co. v. Burlington, &c., Co., 33 Atl. Rep. 479; Breit v. Salferino, 77 N. J. Law 436.

A further question raised is as to the power to mortgage after-acquired property. The complainant’s mortgage is like many others in this regard. The instrument not only covered all chattels and book accounts then owned by the mortgagor, but provided that the lien should extend to all after-acquired chattels and book accounts that should be substituted in the regular course of business for those existing at the date of the mortgage. In the Case of Smithurst v. Edmund, 14 N. J. Eq. 408, the right to mortgage after-acquired property was first established in this state, and that ease has been followed by a long line of subsequent decisions. Lister v. Simpson, 38 N. J. Eq. 438; Bouvinger v. Evening Union Printing Co., 65 Atl. Rep. 482.

My conclusion is that the chattel mortgage was a lien as against creditors .on book accounts that arose after the date of the mortgage and as to chattels acquired after the date of the mortgage. To hold otherwise, seems to me, would be to destroy .the lien of any mortgage of this character.

The last question to be decided is presented by the Lehigh Valley Railroad Company, which company contends that the receivers have no right in the trestles and permanent structures which, it claims, are part of the real estate leased by them to the Wertheim company, and which it claims to be lawfully in its possession since September 17th, 1914.

I am in accord with the complainant’s views in this regard. In the first place, the default under the lease for the non-payment of tax for 1913 was effective January 19th,-1914, and no action to' enforce a forfeiture- was taken by the railroad company until September 17th, 1914, at which time the receivers of this -court were in possession of the property. This delay is, in effect, a-waiver of the default in equity where forfeitures are not regarded with favor. Grigg v. Landis, 21 N. J. Eq. 494. Some definite action must be taken to claim a forfeiture, and it is well settled that if such action is taken after a lapse of time this constitutes a waiver of the right to declare a forfeiture. 24 Cyc. 1364. It has been held that the lessor may -waive the forfeiture by neglecting to assert his right within a reasonable time after the default. 24 Cyc. 1364. Furthermore, the railroad company has never taken possession of the trestles and structures under the default in the lease for the non-payment of taxes, because service of the notice on one of the officers of the Wertheim company on September 17th; 1914, after the appointment of receivers in this cause, was of no effect, and the subsequent service of notice on the receivers or any attempt to oust them from possession was ineffective without the permission of this court first obtained for such action.

The tender of a bill for rent reserved under the lease for the year commencing November 1st, 1914, and the acceptance by the railroad company of payments thereunder, was a waiver of any defaults under the lease which existed prior to that date. It is claimed by the company that the agent who mailed the bill for rent had no authority; but it would appear that the company is estopped from denying this authority by the acceptance of the rent. In Levy v. Blackmore, 67 Atl. Rep. 1022, Vice-Chancellor Howell says:

"But even conceding the position of the landlord, and conceding that the tenant did violate the covenant, and conceding still further that the violation operated as a forfeiture, "and that due notice was given thereof, and everything done by the landlord to conserve what he thought were his' rights, it still appears that the landlord has accepted the rent from the beginning of the lease down to the present time. This operates as a waiver of any forfeiture which may have been incurred during that period.”

Equity will relieve against forfeiture where compensation can be made. The Lehigh company was entitled to rent and taxes. The former had been paid, and my conclusion as to the latter is that the company had a prior lien on the proceeds of the sale of the chattels under forfeiture for taxes and interest thereon paid by the company subsequent to September 17th, 1914.

A decree may be entered in accordance with the above views.


text:
    John Fraser Kempson v. Lucy C. Hoskins et al.
    [Decided November 19th, 1917.]
    1. Under the terms of the will to be construed there should be a sale of The Insurance Times and the proceeds thereof divided.
    2. A power given in the will'to testator’s children to decide whether the paper should be continued after the termination of the life estate created by the will is violative-of the rule against perpetuities.
    On bill for construction, answers, cross-bill and proofs.

      Messrs. Collins & Corbin, for the complainant.

      Messrs. Smith, Mahon & Herr, for the children of St. George Kempson, deceased, defendants.

      Mr. John K. English, for Mafian K. Brush, defendant, and Edward E. Brush, administrator of Julia H. Kempson, deceased, defendant.

      Mr. John A. Coan, for Aylin Pierson, defendant.

      Mr. Charles O. Truex, for Charles M. Van Cleve, administrator, &c., defendant.
   Lewis, V. C.

The bill of complaint in this cause was filed February 25th, 1916. It was afterwards amended in some trifling particulars. Answers were filed for the defendants, St. George Kempson, Peter Tertius Kempson, Julia Cornelia Carter, Eber Hall Kempson, Grover Cleveland Kempson, Helen A. Kempson, John Monroe Whitman Kempson and Agnes Emily Kempson, infants, by their guardian, Helen A. Kempson; Sarah Adele Gladys Halstead and Helen Hall Mitchell, Charles M- Van Cl'eve, administrator of James A. Van Cleve, deceased; Marian R. Brush, and Edward E. Brush, administrator of Julia H. Kemp-son, and the defendant Aylin Pierson, who appended to his answer a cross-bill against the complainant, and to this the complainant filed a special replication.

The bill was taken as confessed against the defendants, Lucy C. Hoskins, Truman T. Pierson, Amy Norma Pierson, Esther Noble Pierson,'John Noble Pie.rson, John Noble Pierson, executor of and trustee under the- last will and testament of Lucy C. Pierson, deceased; John Noble Pierson, guardian of Amy Victoria Pierson and George Alden Pierson; and also against Malcolm Boylan Kempson, and against Grace Duffie Boylan Geld-hart, individually and as executrix of the last will and testament of St. George Kempson, deceased, by order of this court made on November 15th, 1916. .

The complainant is one of the sons of Peter Tertius Keinpson, who died in the county, of Middlesex, New Jersey, on the 25th day of September, 1890,■ having made .his last will and testament, which -was admitted to probate by the surrogate of that county.

The pertinent parts of the 'will read as follows:

“First. I direct and desire that my executors hereinafter named, as soon after my death as the same can be done with a due regard to the interests of my estate to pay all my just debts and funeral expenses, as the same may be presented and approved. ' .
“Second. I give, devise and bequeath to my beloved wife, Julia H. Kempson, all my household furniture, books, pictures, plate and articles useful'and ornamental, except as hereinafter otherwise devised, together with all horses, carriages, harness, and stable equipments, farming tools, and stock of every kind, with all money standing to my credit in the Union Trust Company in the city of New York, and also-in the American Exchange Bank, to have and to hold the same, to the' said'Julia H. Kempson and her heirs forever. ■ ' ' \ '
“Third. I give-and bequeath to my beloved daughter, Lucy Clara Bier-son, wife of John Noble Bierson, my piano, one music stool and all my music, bound' or unbound, now in my residence in Metuchen, New Jersey, also a small table bought 'for the purpose of holding music,' and standing beside the piano, also the one large- photographic portrait of Lucy’s mother, to have and to, hold the same to her and to her .heirs forever. And I further give and devise tó my said.daughter Lucy Clara'Bierson, tlie full sum of six hundred dollars, and direct and request my executors hereinafter named, to pay the same into the Seaman’s Bank for Savings in the City of New York, in trust for the said Lucy Clara Pierson, and to pay the same to her in half-yearly instalments of one hundred dollars with interest earned by the Bank.
“Sixth. To my son St. George Kempson, I give and bequeath my watch and its appendages, and also my family Bible, and my field glass, as tokens of love and remembrance.
“Seventh. I give, devise and bequeath to each of my sons, St. George Kempson, and John Frazer Kempson, the sum of Five hundred dollars, to be paid to them as soon after my decease as can be done with due regard to the interests of my estate, as tokens of love and affection.
“Ninth. I give, devise and bequeath- to Frederick R. Coudert of the City of New York, D. A. Heald of the City of New York, President of the Home Insurance Company, Roger V. Bonnell, of Metuchen, Middlesex County, State, of New Jersey, and Levi W. Norton of Rahway, New Jersey, all the rest, residue and remainder of my estate both real and personal, not hereinbefore disposed of, or hereinafter specified, to have and to bold the same, in trust however, for the uses and purposes hereinafter specified and directed.
“My said executors and trustees shall take and hold all the rest residue and remainder of my estate real and personal, with all the rents, use, interest and profits of the same, for the sole use, benefit and advantage of my said beloved wife Julia H. Kempson during her natural life, or so long as she may remain my wiioio, and I enjoin and direct my said executors and trustees named to keep the premises in good repair and condition, and to keep said real estate free and discharged from any and all incumbrances by taxation or assessment.
“On the death or remarriage of my beloved wife Julia H. Kempson, I will and direct that my estate both real and personal, shall be divided, share and share alike between Lucy Clara Pierson, St. George Kempson and John Frazer Kempson, but if any of my children above named shall die before the happening o-f such event, leaving, lawful issue, I then direct that the share to which such deceased widow or child have been entitled if living, to be paid such lawful issue as such deceased widow or child may leave.
“Whenever in the judgment of my trustees herein named, or any two of them, it shall be deemed expedient, and for the best interests of my estate, to sell the whole of any part thereof of which I may die possessed, I then authorize and empower my said trustees; or any two of them, to sell or dispose of'the same, or any part thereof, and to make good and sufficient deeds therefor; but the proceeds of such sales shall be re-invested by said trustees either in good bonds and mortgages upon unincumbered real estate or in bonds of the United States or of the City of New York, the interests and profits thereof to be applied by my said trustees precisely as though ho change' has been made in said property or estate. If at any time it shall happen that funds belonging to my estate shall be accumulated in the hands of my trustees from any source, they are hereby authorized and required to invest the same upon bond and mortgage upon unincumbered real estate or property that shall be deemed a sufficient security, or in-United States Government bonds, or in bonds of the City of New York, preference being given to mortgage securities if the same can be obtained, and pay the income as above provided.
• “From all the provisions of the precedirig clauses I except my interest in The Insurance Times newspaper, its.good will, contracts and all business therewith or which may' become connected therewith, or so. much of such business, including money in hand or in Bank, and all debts Sue as I may owe at the time of my decease, and I direct that my interest in and control of sái'd business pass into the hands and charge of my executors, the business to remain intact so -long as my wife Julia H. Kempson' may live or remain unmarried, the property at her .death or remarriage, to be sold to the highest bidder or at private sale, or continued and conducted as my heirs may jointly decide, the will of the majority, exclusive of grand children, ruling;. but until such time all profits arising from such business are to belong to my said wife, with the exception of Eight Twentieths thereof, three twentieths of which shall be paid semi-annually to my daughter Lucy Clara Pierson; three twentieths to be paid semi-annually to my son. St. George Kempson, and two twentieths thereof to be paid semi-annually to my son John Frazer Kempson; And should my said wife again marry, I will and direct that all her right and interest in such property shall thereupon terminate.
“With regard to my son St. George Kempson’s connection with The Insurance Times, I wish that my wife will continue the arrangement at present existing, and that as soon as it may seem best to my trustees, and Mrs. Kempson, some specific arrangement be entered upon with my said son St. George Kempson, so that he may have a permanent interest in The Insurance Times, of course under the direction and subject to the control of Mrs. Kempson, whenever she chooses to exercise that control.
“And with, regard to Mr. James A. Van Cleve, I hereby desire to express my satisfaction with his conduct of the business under the present arrangement with The Insurance Times, and as soon as may be convenient I should wish that Mr. Van Cleve have some interest in the success and profits of said Insurance Times. ■
'T wish no power given to any of my children legatees to examine the books or accounts of The Insm-anee Times, but they must be satisfied to abide by whatever my trustees consider a true and just estimate of the profit arising therefrom.
“Lastly. I hereby constitute and appoint Frederick R. Coudert, of the City of New York, D. A. Heald, Roger Y. Bonnell and Levi W. Norton, above named, Executors and Trustees under this my last will and testament.”

The prayer of the complainant as prayed by his bill is;

(1) That this court determine whether the children of St. George Kempson have any interest in The Insurance Times, or the proceeds of sale thereof, if sold; or whether the assignment made by him in his lifetime to Julia H. Kempson and James A. Van Cleve passed the entire interest in that paper, its income or avails of sale, and, if so, whether that interest is now vested in Charles M. Yan Cleve as administrator of James A. Yan Cleve, deceased, and Edward E. Brush as administrator of Julia H. Kempson, deceased, and Marian R. Brush as only child and next of ldn of Julia H. Kempson, deceased, by reason of said assignment of St. George Kempson to Julia H. Kemp-son and James A. Yan Cleve.

(2) That it be determined whether Grace Duffie .Boylan Kempson, widow of St. George Kempson, deceased, and Malcolm Boylan, her son by a former husband, and one of the legatees named in St. George Kempson’s will, are entitled to any interest in the said Insurance Times, and, if so, what interest.

(3) That Charles M. Yan Cleve, administrator of James A. Yan Cleve, deceased, file an account in this court of his administration of the Insurance Times during his trusteeship.

(4) That complainant may be appointed trustee for the said Insurance Times under the provisions of the will of Peter Tertius Kempson, deceased, in the place and stead of James A. Yan Cleve, deceased.

(5) That it may be established by decree of this court whether or not it is to the interest of all who may be decreed to have an interest in the said Insurance Times that its publication should be continued under the direction and management of complainant as trustee, and that it may be determined when and under what conditions, if any, the Insurance Times, its good will and business, should be sold.

(6) That the ninth paragraph of the will of Peter Tértius Kempson be construed by this court as to its meaning regarding sale of said publication, its good will and business.

None of the trustees or executors qualified as such or accepted the trust, and St. George Kempson, one of the sons of the testator, and James A. Yan Cleve were appointed administrators with the will annexed on November 15th, 1890.

On September 21st, 1893, Julia -H. Kempson, Lucy C. Pier-son and the present complainant in this cause filed a bill in this court praying for the appointment 'of a trustee or trustees and an accounting by the administrators, and James A. Yan Cleve was thereupon appointed sole trustee do execute the trusts relating to The Insurance Times.

The' first question to be decided in this ease is whether the testator died intestate so far as the final disposition of The Insurance Times, after the termination of the' particular estate, is concerned.

I have had no difficulty in reaching the conclusion that the testator died intestate so far as that is concerned.

Under our intestacy daws his three children would, immediately upon the testator’s death, have a vested interest, the en¡jojunent of which, however, would be postponed until the termi-nation of the particular estate, excepting so fax as they wexe to receive under the will a portion of the profits during their stepmother’s lifetime, when the particular estate was to terminate. It therefore follows that the children could at any time after the death of their father, the testator, dispose of all or any portion of their interest. Two of the children of the testator predeceased their' stepmother. Under their father’s will they were to get a certain proportion of the profits from the newspaper during their stepmother’s lifetime. The will makes no provision for the disposition of their profits from the newspaper during the period between the death of the children and the stepmother, in case she outlived them. It will be remembered that the testator gave twelve-twentieths of the profits from the newspaper to his wife, and the balance to his' children, in the proportions mentioned in the will. Lucy Clara Pierson, the daughter of the testator, died on May 1st, 1897; St. George Kempson died on August 12th, 1907, and Julia H. Kempson, their stepmother, died August 13th, 1913. After the death of any of the children and until the death of the stepmother, that is to say, the termination of the particular estate, I think that the profits which would have gone to the children of the testator during the period between their death and that of the stepmother should go with the principal and be divided among the next of kin, unless the children of the testator had disposed of all of their interest prior to their death, and in that event the person or persons who bought out the interest of the child or children would be entitled to everything to which the child or children would have been' entitled. As a result, I find that the assignment by St. George Kempson, one of the children of the testator, in writing, under his hand and seal, dated December 30th, 1893, wherein he assigned, transferred and set over to Julia H. Kempson, his stépmother, and James A. Yan Cleve, who afterwards became the trustee,-his interest in The Insurance Tim'es, including 'ther good will, contracts and other business connected therewith, accounts and bills receivable, to have been a valid assignment of all his interest in the same, and I find that his wife and .children have no interest whatever, but it was vested in the stepmother and the trustee appointed after the assignment who had purchased his interest for good and valuable consideration, and as'the trustee, James A. Yan Cleve, and Julia H. Kempson are now dead, the administrator and the only child-of'Mrs. Julia H. Kempson are entitled to the undivided one-half part of said interest; and the other undivided one-half part of such interest belongs to the estate of James A. Yan Cleve.

The complainant is the only living child of the testator, and he sets up that under the will he has the sole right to decide whether The Insurance Times shall be sold or continued. Under the fifth paragraph, of the ninth section of the will the testator gives this power to his children to decide for themselves at the termination of the particular estate, the majority ruling. The point has not been raised by counsel, but L am of the opinion that so far as continuing the paper is concerned it is violative of the rule against perpetuities.

The bill prays that Charles M. Yan Cleve, administrator of James A. Yan Cleve, file an account in this court of his administration of live Insurance Times during his trusteeship. That will be the order.

My conclusion is that there should be a sale of the paper and a division of its assets among those entitled thereto., and I shall advise a decree to this effect.


author: Backes, V. C.

text:
    Minnie Van Harken Penny v. Frank Penny.
    [Submitted August 10th, 1917.
    Decided October 11th, 1917.]
    .1. Bonds conditioned to obey writs of ne exeat are in the nature of equitable bail, and the obligations of sureties are substantially the same as bail at common law.
    2. Where, on hearing, the petitioner failed to substantiate her case, and, by leave of the court, substituted another, on which she succeeded, the liability of a surety on the husband’s ne exeat bond given under the petition as originally filed, ceased.
    On order to show cause.

      Mr. Max L. Simon, for the order.

      Messrs. Qorbin é Hughes, for the surety-respondent.
   Backes, V. C.

This matter is before the court on an order to show cause why a ne exeat bond should not be forfeited and the. penalty paid into court, following the practice in Schreiber v. Schreiber, 85 N. J. Eq. 303. The surety claims exoneration because the petition for divorce was amended, substituting a cause of action different'from the one pleaded when the bond was given.

The petition was filed October 13th, 1916, charging that the petitioner was compelled to leave her husband because of his. extreme cruelty — the acts of cruelty are recited in detail — and praying -that she be divorced a mensa et thoro, awarded alimony and the custody of their child. Three days later a writ of ne exeat issued. Upon being apprehended the defendant entered into bond with respondent as surety, with conditions as prescribed by Rule 192 (now 216). Being unable to' substantiate the charges at the hearing, the petitioner asked, and was granted, leave’ to amend by setting up that the defendant, without justifiable cause, had abandoned her and refused or neglected to maintain and provide for her, and upon the amended pleadings and proof a decree was añade awarding weekly alimony. Shortly afterwards, the defendant defaulted and later failed to respond to an order to show cause why he should not be adjudged in contempt. Then these proceedings followed against the surety. That an entirely new cause of action was set up by the amended pleading is manifest. Jurisdiction of the two causes of action set up respectively by the original and amended petitions is conferred by separate sections of our Divorce act, and the method of acquiring jurisdiction and the mode of procedure are essentially different. One is by petition and citation; the other by bill and subpoena. In the former an accompanying affidavit of non-collusion is a jurisdictional requisite not demanded in the latter. The nature and quality of proof is different and the cause for action under either section would not sustain a decree under the other. While in both alimony is awarded, in one it is incidental to the relief; in the other it is the principal relief.

Bonds conditioned to obey writs of ne exeat are in the nature of equitable • bail and the obligations of sureties are substantially the same as bail at common law. Palmer v. Palmer, 84 N. J. Eq. 550; Schreiber v. Schreiber, supra; 2 Brandt S. & G. § 592; Johnson v. Clendenin, 5 G. & J. (Md.) 463. That a material amendment to a cause of action, upon which, as amended, the plaintiff relies for judgment, without the consent of the sureties, discharges the sureties, is uniformly laid down in the textbooks and the reports of decisions. I will quote from a few only.

In 6 Corp. Jur. 924 § 91, it is tersely put thus: “Any alterations or amendments in the writ or pleadings whereby a different or new cause of action is created and the bail is thereby subjected to a different or additional responsibility or is otherwise placed in a situation which materially changest the legal nature’ of their obligation operate to discharge the bail, unless the judgment is rendered on the original demand only.” To the same effect is Ping. S. & G. (2d ed.) 424, 426, §§ 412, 413; 1 Tidd’s Prac. 293, 449. In Wood v. Denny, 7 Gray (Mass.) 540, the declaration on the common monfey counts was amended by adding a count on a guaranty of a debt due by a third person to plaintiff. In discharging the bail, the supreme court held that '“In the first of these actions the new count on a guaranty of a debt due from a third person to the plaintiffs was hot for the same cause of action as the money counts and could not have been given in evidence on those counts. Whether as between the parties to the action the filing of that count was properly allowed is not now in question. As to the bail, we are of the opinion that it discharged him from his undertaking. He became bail in an action for money had and received; money lent and money paid as set forth in the writ and declaration against the principal, and not in an action on a guaranty by the principal, of the plaintiff’s claim on another. The rule by which the court is to decide whether an amendment discharges bail, or dissolves an attachment so as to let in subsequently attaching creditors, is correctly stated by Mr. Justice Wilde as follows: ‘Amendments in form merely will not dissolve an attachment, or discharge bail. To have this effect, the amendment must be such as to let in some new demand or new cause of action.’ Haven v. Snow, 14 Pick. 33; Wight v. Hale; 2 Cush. 493. See, also, Haynes v. Morgan, 3 Mass. 210. In the case before us the amendment did let in a new cause of action which was not known even bjr the attorney until after the writ, declaration and arrest were made. In England, bail are not liable for any cause of action different from that which is stated in the process or in the affidavit to hold to bail. 1 Tidd’s Prac. (1st Am. ed.) 242; Wilks v. Adcock, 8 T. R. 27; Wheelwright v. Jutting, 7 Taunt. 304; Thompson v. Macirone, 4 D. & R. 619.” Other cases in Massachusetts are Prince v. Clark, 127 Mass. 599; Dunsmoor v. Bankers’ Surety Co., 206 Mass. 23. Cases in other states are Pell v. Grigg, 4 Cow. (N. Y.) 426; Bryan v. Bradley, 1 Tayl. (N. C.) 77; Bradhurst v. Pearson, 32 N. C. 55; Hamlin v. McNiel, 32 N. C. 306; Cassidy v. Saline County Bank, 104 S. W. Rep. 829; Fish v. Barbour, 43 Mich. 19. In Hyer v. Smith, 3 Cranch C. C. 437, Chief Justice Cranch said that “The court is clearly of opinion that if the plaintiff amends his declaration by adding a count upon a cause of action which could not be given in evidence upon the original declaration as sent out with the writ, or which is not contained in the affidavit 'to hold to bail, the bail must be discharged.” And in Carrington v. Ford, Cranch C. C. 231, he- observed “That the reason for discharging bail upon amending the declaration is that it would be unjust to charge the bail upon a cause of action different from that xipon which the bail was originally given; or where the amendment is of a defect existing at the time of entering bail and which would have defeated the plaintiff’s action but for such amendment.” •

The question was put at rest early in this state in the case of Robeson v. Thompson, 9 N. J. Law 97, where the affidavit to hold to bail disclosed that the suit was on a book account, but the cause of action‘as set out in the declaration was on a special agreement to pay the debt in question. In declaring the variances fatal and the surety exonerated, the supreme court said: “Courts of justice suffer slight variances to be taken advantage of in this way. 2 Taunt. 107; 6 T. R. 363; 7 T. R. 80; 13 East 273. And it is right they should do so. Whoever attacks the liberty of the citizen should know the grounds on which he does it. Our statute requires an affidavit of the cause of action in order to hold to bail. And it should be stated truly. And bail may safely come forward and protect the debtor from imprisonment, even where he is liable, if that liability rests upon different grounds from those stated in the affidavit.”

Now in the case in hand the surety’s undertaking was that if the petitioner sustained her charges of extreme cruelty, as laid in the original petition, and thereon a divorce was granted with permanent alimony as an incident, he would respond if the defendant failed to submit himself to proceedings to enforce the decree, and there his .engagement ended; and when the petitioner failed to make out her case at the trial and substituted another cause upon which she recovered, his liability ceased. It may be surmised that when he performed this gracious act he was assured that the defendant was not guilty of the brutality of which he stood charged or that the charges could not be sustained and that there could be no decree, and to that extent was willing to take the risk of his enlargement; and it is equally permissible to suppose that he knew the defendant had abandoned his wife and that if this were the coinplaint he would not have undertaken the hazard. Brit his motives are immaterial, for his 'accountability is' fixed by the letter of his bond. As Justice Story said in Miller v. Stewart, 9 Wheat. 680, “Nothing can be clearer, both upon principle and authority, than the doctrine that- the liability of a surety is not to be extended by implication beyond the terms of his contract. To the extent, and in the manner, and under the, circumstances pointed out in his obligation he is bound, and ho 'farther. It is not sufficient that he may 'sustain no injury by a change in the contract or that it may even be for his benefit. He has the right to stand upon the very terms of his contract; and'if he does not assent to any variation of it, and a variation is made, it is fatal. And courts of equity, as well as of law, have been in the constant habit of scanning the contracts of sureties with considerable strictness.” * * * “Nothing can be better settled than the doctrine that, if - an obligation be dependent' on another obligation (and, by parity of reasoning, upon the legal existence of another instrument), and the latter be dischárged, or become void, the former is also discharged.”

A further contention is tliat even 'if the surety cannot be held to the defendant’s performance of the final decree, the bond ought to be forfeited because of a default in the payment of taxed costs on an order for alimony pendente lite entered before the amendment'was made. The answer'to this is that there was no default until after the bondsman was released. The order to show cause why defendant should not be held in contempt was not issued until after the pleadings were changed.

The rule will be dismissed, with costs, and as the respondent’s liability is at an end, the bond will be ordered canceled and surrendered.


text:
    Mary Agnes Heyer, by her next friend, v. Michael A. Sullivan et al.
    [Heard and decided May 28th, 1917.]
    1. Wheré testatrix’s estate has been fully administered except as to certain 'corporate shares specifically bequeathed the right of action to recover such shares is in the legatee, the executor’s qualified estate therein being at an end. ' ' ■ '
    2. The orphans court, in which such estate- was settled, had not the power to try the title to such shares under P. L. 1909 p. 88J/.

    3. Evidence held insufficient to establish a gift of such shares by testator to her son, as against the specific legacy given by the terms of the will. ’
    4. Delivery of a certificate of stock without actual transfer or a written assignment or power to transfer, although accompanied with words of gift, does not constitute a valid gift inter, vivos.

    On'bill, &e.

      Mr. Thomas J. Brogan, for the complainant.

      Mr. Theodore Burode, for the defendant.
   Backes, V. C.

■This bill is to recover a specific legacy of ten -snares of the capital stock of the Jersey City Horse Manure Company. Mary Sullivap, deceased,-owned thirty-twq shares of the stock of this company,-and by. her will dated February 10th, 1912, bequeathed ten shares to the complainant and the remaining shares to her son; the defendant, Michael A. Sullivan. Sullivan claims the thirty-two shares by gift from his mother under date of January 12th, 1910, at which time the stock was transferred to him upon .the books of the company. The prayer-is that Sullivan transfer .to the eom-plainant the ten shares, and also pay over to her the dividends thereon, received by him since the death of his mother, amounting to upwards of $2,000.

Two preliminary questions are presented. The first is that the right of action is in the executor and not in the complainant; and second, that the orphans court of Hudson county has adjudged the controversy.

The estate of the testatrix has been fully administered in the orphans court, except as to the shares here involved. The complainant’s title is by virtue of the will. The qualified estate of the executor therein is at an end. His duty to surrender the legacy to the complainant will be presumed to have been performed. “Equity regards that as done which 'ought to be done.” The executor is a party to the suit and does not object. See Hayes v. Hayes, 45 N. J. Eq. 461.

Upon the petition of the executor, the orphans court or.dered Sullivan to show cause why he should not surrender the ten shares of stock and after a hearing adjudged the shares to be assets of the estate and ordered them to be transferred upon the books of the company and delivered to the executor. From this order an appeal is pending in the prerogative court. Chapter 190 of tb,e Laws of 1909 (P. L. 1909 p. 284), authorizes a discovery in the orphans court of the estate of decedent and empowers the court to “take such proceedings for the recovery of any assets of the said estate so discovered by order or decree as may be taken in like cases in the court of chancery.” The orphans court had not the power to summarily try the title and determine the question of gift dr no gift. There is nothing in the act to warrant the decree. The court of chancery on discovery, on bill for that purpose, simply restrains third parties from disposing of disputed property, and determines the issue of fraudulent trust on final hearing upon pleadings and proofs. A receiver appointed under the act (Comp. Stat. p. 435) must proceed against third parties to recover other than trust property according to the course of the common law. The subject-matter of this litigation not being within the jurisdiction of the orphans court, its decree must be disregarded.

The gift is not established. It is supported by the testimony of the donee onty, who says that his mother called him into her room one day and said, “Here, I have promised yon this stock for some time,” and that she then handed to him the certificate, reserving the right to the dividends thereafter to accrue, which he says he paid to her down to the' time of her death. The usual form of assignment and power of attorney to transfer, printed on the hack of the certificate, is not filled out. It bears date January 12th, 1910, and purports to have been signed by Mary Sullivan by her mark, and witnessed by Hannah Elynn. In this form the stock was transferred to Sullivan upon the books of the company, which he owned and controlled. No-attempt was made by Sullivan to prove the mark to be his mother's, nor to prove the signature of the subscribing witness. Hannah Elynn, the supposed subscribing witness, daughter of Mary Sullivan, denied the signature as hers. It may also be observed that it is deducible.from the testimony that Sullivan had access to his mother’s papers. The circumstances arouse grave suspicion as to the genuineness of the mark, but it is not necessary to dwell upon this serious aspect of the case in reaching the conclusion that the defendant has not made out a gift.

A delivery of a certificate of stock without actual transfer or a written assignment or power to transfer, although accompanied with words of gift, does not constitute a valid gift inter vivos. Matthews v. Hoagland, 48 N. J. Eq. 455. There is no proof of a written assignment or transfer. 36 Cyc. 455.

The naked and absolutely uncorroborated testimony of a donee will not be accepted as sufficient to sustain a gift as against the estate of a deceased donor. Berg v. Baldwin, 84 N. J. Eq. 90; affirmed, 84 N. J. Eq. 193.

To this may be added that the imputation of forgery of the name of the subscribing witness, the blank form of the assignment, and the evident belief of the testatrix that she owned the stock at the time she made her will, and other circumstances in the case, so utterly discredit the testimony of the defendant Sullivan regarding the alleged gift by his mother as to render it unworthy of belief.

The complainant is entitled to a decree for the stock and the dividends, with costs.