text:
    George G. Green v. Kate McCrane et al.
    1. The act of March 7th, 1893 (Gen. Slat. p. 2111 $ 41), declares that any chattel mortgage upon household goods and furniture in the use and possession of any family in this state, not given to secure the purchase-money for the goods &c., shall be void unless signed &c. by both the husband and wife of the family. — Held, that it must appear by allegation and proof that the household goods were in the use of the family, as well as in their mere possession, before the act would be applied. Semble that if the mortgage included not only household goods but also other property, and the act were applied, it would be held in equity to make the mortgage void only as to the household goods.
    2. A debtor in failing circumstances may secure one or more creditors by chattel mortgage in preference to others; and such a chattel mortgage, if honestly given simply to secure the favored creditor and without any design to benefit the debtor, or to hinder his other creditors, is a valid security. Milton v. Boyd, 4 Dick. Ch. Rep. 142, distinguished.
    On bill and affidavits and order to show cause &c.-
    The complainant, George G. Green, is the owner of a farm in Harrison township, Gloucester county. He files this bill against Kate McCrane, John McCrane and Jeremiah McCrane, defendants. Green had leased his farm to John and Jeremiah McCrane, who were in the possession of a considerable quantity of goods and chattels, consisting of farming stock, implements &c., and John McCrane was possessed of a large amount of household furniture, all situated on the complainant’s farm. On February 1st, 1897, John and Jeremiah became indebted to the complainant for $425 rent, which then came to be due on the lease of the farm made to them by the complainant, and on February 9th, 1897, the complainant distrained all the above-named goods and chattels, furniture &c., and, after seizure, impounded them on the farm.
    Previous to this seizure, John and Jeremiah McCrane had, on January 5th, 1897, made a chattel mortgage to the defendant Kate McCrane (who was a daughter of John) upon the goods and furniture subsequently distrained by the complainant. The chattel mortgage, as stated in the bill, is conditioned for the payment of $943.75 in one month from the date thereof, according to the tenor of a bond 'bearing even date therewith, given by John and Jeremiah McCrane to Kate McCrane.
    The bill states that a copy of the chattel mortgage is annexed to the bill. The complainant alleges that this chattel mortgage is without consideration — is not in good faith; that it was made to hinder and delay the complainant in the collection of his claim against John and Jeremiah McCrane; that the mortgage is void and of no effect, because the affidavit annexed to it does not conform to the requirements of the statute, and because John McCrane is married and has a wife residing with him on the farm, and the chattel mortgage is given in part on household goods in the possession of John McCrane and his wife • and the complainant claims that by the terms of the statute passed March 7th, 1893 (Gen. Stat. p. 8111), the mortgage is absolutely null and void. The complainant shows that the chattel mortgagee, on February 19th, 1896, advertised the goods mortgaged (excepting the household goods), to be sold at public vendue on February 26th, to pay and satisfy the amount of the chattel mortgage, and the complainant charges that the chattel mortgage is fraudulent, and the sale under it is also for the purpose of delaying the complainant and hindering him in the collection of his rent, and he prays for an answer by the defendants John and Jeremiah McCrane, without oath; that the chattel mortgage may be set aside and declared invalid as against the complainant; that the property may be sold under the complainant’s distress warrant free from the lien of the chattel mortgage, and the proceeds, so far as may be necessary, may be applied to the satisfaction of the complainant’s rent, and that Kate, John and Jeremiah McCrane may.be enjoined from making sale of the goods and chattels of the said John and Jeremiah, by virtue of the chattel mortgage and the power of sale therein contained. The bill is supported by the affidavit of the private secretary of the complainant and that of the sheriff of the county, who, as bailiff, served the distress warrant. A copy of the lease of Green to McCrane is annexed to the bill, and also a copy of the distraint impounding the goods, with a list of the goods themselves. On the filing of the'bill an order to show cause was allowed why injunction should not be granted according to the prayer of the bill, and upon the coming in of the order, the defendant Kate McCrane appeared by counsel, and filed in reply her own affidavit and that of the defendants Jeremiah and John McCrane.

      Mr. Austin H. Swaekhamer, for the complainant.

      Mr. John S. Jessup, for the defendants.
   Grey, V. C.

The only affidavit of the complainant which impugns the consideration of the chattel mortgage of the defendant Kate MeCrane is that of the witness Harrison Livermore, the private secretary of the complainant. The witness states that.he believes that the chattel mortgage was given “ without any consideration paid by the said Kate MeCrane and for the purpose of hindering and delaying the said George G. Green in the collection of his rent.” He further states that the defendant Kate MeCrane never carried on any separate business on her own account, always- lived in her father’s family and depending upon him for support except at times when she went out at service. So far as the consideration of the chattel mortgage is attacked by this affidavit, I think it doubtful if the showing on the part of the complainant (which is evidently upon information and belief and not knowledge) would have been sufficient to support any conclusion that the mortgage lacked consideration. When the responding affidavit of the defendant Kate MeCrane is considered it is apparent that the chattel mortgage rests upon a consideration of moneys (earned by her, or given to her by other persons than the mortgagors) loaned to the mortgagors, for which they gave her various notes which all came to be payable, and then an account was stated, the amount of interest and principal was computed, the due notes were exchanged for the bond and further time of payment of the aggregate debt was given the mortgagors by the mortgagee. The evidence for the defendants on this point is, I think, conclusive.

It is further objected that the chattel mortgage is void in toto under the provision of the statute of March 7th, 1893. Gen. Stat. p. 2111 § 41. This act provides that every mortgage made upon household goods and furniture in the use and possession of any family in this state, not given to secure the purchase-money for such goods and chattels thus in use and possession, shall be absolutely void unless such mortgage shall be first duly signed &c. by the husband and wife of the family and be duly recorded as provided by law &c.

The complainant' claims that the operation of this act upon the chattel mortgage in question is to make it wholly void, because among the things mortgaged there are enumerated sundry articles of household goods and furniture, and he insists that the terms of the act are to be strictly construed to make the mortgage void and of no effect, notwithstanding the articles of household furniture may be few in number and the other goods and chattels may constitute the more considerable portion of the goods pledged.

The intent of the act is undoubtedly to prevent the disposition, by way of chattel mortgage, of those articles of household equipment which are in the actual use of a family, without the consent of both the husband and wife of the family, obtained by their joining in the execution of the mortgage. The purpose is to protect this household furniture in the use of the family against the mortgagee, not to defeat the mortgagee’s lien for the benefit of other lien creditors. The object of the act would be fully accomplished if the mortgage were to be held void to the extent that it includes household furniture. It would seem an absurd construction to give to the act, if a chattel mortgage executed only by the husband, upon a herd of cattle und a drove of horses, should be held to be totally void because it also included a rocking-chair in the actual use and possession of the family. An absurd construction will not be given to a statute when the object of the legislation is manifest and can be secured by a reasonable interpretation consistent with the words of the act. An act which prescribed a penalty against anyone not licensed by Trinity House pilotiug a ship on the Thames was held to apply only to ships on a voyage and not to persons in charge of a ship merely shifting from wharf to wharf to unload cargo. Rex v. Lambe, 6 T. R. 76.

But whatever construction may be given to this-provision when its interpretation becomes necessary, it is certainly essential to the raising of this point that 'the bill should specially allege, and the proofs should make it affirmatively appear, that the instrument challenged is one of those which the act declares to be void. That it seeks to mortgage household goods and furniture which may be in storage or in stock would not put the mortgage within the application of the act. The intent of the statute is plainly that the furniture of the household in actual use by the. family shall be secured for its comfort and necessity, unless the heads of the family shall join in the mortgage. In the case in hand the bill does not allege that the household goods and furniture named in the mortgage are in the use and possession of any family in this state. The bill asserts that the said “John McCrane was possessed of a large amount of household furniture, all situated on the complainant’s farm; ” and in another part states that

“he is married and has a wife residing with him on the said farm, and the said chattel mortgage is given upon the household goods in the possession of the said John McCrane and his wife.”

The affidavits annexed to the bill do not deal with this question at all and throw no light upon the point whether or not the household furniture was in either the use or possession • of the family. All that is proven is that the bailiff seized the goods and chattels of John McCrane situated on the demised premises, so that even .if the allegation of possession by the family necessarily implied use, there is no proof of such possession to support the allegation. The chattel mortgage itself is executed by John McCrane and Jeremiah McCrane and states that “ all the goods and chattels mentioned in the schedule hereunto annexed and now in our possession ” &c.; so far as the chattel mortgage itself is evidential on the point, it shows that the possession was in John and Jeremiah McCrane, the mortgagors. But whether the furniture consists of household goods in the use and possession of the family is not stated. For all that appears on the face of the bill and in the proofs, the household furniture might have been in the possession of McCrane and his wife, but stored upon the complainant’s farm, and not in the use of the family. The essential element required in order that the act may apply to make the mortgage void even as to household furniture, is that it should affirmatively appear, not by allegation alone but also by proof, that the household furniture was not only in the possession, but actually in the use of the family. It is not intended that possession merely, without use, should create the condition under which the statute would apply; and as the remedy sought is in the nature of an enforcement of a penalty, making void a contract which save for the act would be valid, the complainant must certainly make distinct- averment, and also explicit proof, of those circumstances, the existence of which he claims entitles him to the administration of so severe a judgment. To declare such a mortgage totally void, the attacking party would probably b.e compelled to resort to the courts of law for his remedy. Equity will, in a proper case, relieve against penalties; it never hungers for their enforcement.

The chattel mortgage was further objected to on the ground that the affidavit was faulty, in that it states “ that there is due on the said mortgage the sum of $943.73, beside lawful interest thereon from the fifth day of January, 1897,” the complainant claiming that, by the condition of the mortgage, it is shown that it secures a bond payable in one month, while the affidavit, in its terms, indicates that the money is payable at once, at the time of taking the affidavits.

The Chattel Mortgage act, in requiring the affidavit of consideration, prescribes that it be made by the holder of the mortgage, stating the consideration “ of the said mortgage, and, as nearly as possible, the amount due and to grow due thereon.” The use of the words “ as nearly as possible,” applicable to the specifications of the amount due or to grow due on the mortgage, indicates that the act does not require precise and exact naming of a definite sum, but only a statement, as nearly as possible, of the amount due. The word “due” has been defined in this state to signify sometimes simply indebtedness, without reference to the time of payment, and at other times it means that the day of payment or render has passed. Scudder v. Coryell, 5 Halst. 403 ; Hoyt v. Hoyt, 1 Harr. 143.

In the statute requiring an affidavit of the plaintiff or his agent, on the confession of judgment on bond and warrant of attorney, the affiant is required to swear that the amount for which judgment is confessed is justly due and owing, and in the case of Scudder v. Coryell the word “due” is defined to have been used in this statute in the sense signifying simply indebtedness. For the purpose of the inquiry in this case, it is immaterial whether the word “due” is defined to be limited to a definition of the existence of the indebtedness, or to an indication that the day of payment has passed, because the affidavit, under the authorities discussing this statutory requirement, must, in cases referring to the chattel mortgage, be considered to make the mortgage a part of the affidavit, and they are required to be read together. In Fletcher v. Bonnet, 6 Dick. Ch. Rep. 515, the court of errors held that where the affidavit expressly refers to matters stated in the mortgage, these matters must be regarded as part of the affidavit, citing previous cases to the same effect. In the case in hand, the affidavit is annexed to the mortgage, the affiant opens her affidavit by swearing that she is the mortgagee named in the foregoing mortgage, she further swears that the true consideration of the said mortgage is &c. No one can read the affidavit without being referred to the mortgage. The statement of the consideration in the affidavit and recital of the sum due in the condition of the bond must stand together, and, so taken, they notify the reader that the amount due on the mortgage, in the sense of the amount owing on the mortgage, is the sum of $943.73, and that that amount is also secured to be paid by a bond wherein it is specified that it shall come to be due in the sense of payable in one month from the date thereof. The affidavit and the chattel mortgage, when read together, sufficiently comply with the statutory requirements.

The attacks upon the chattel mortgage for defects by reason of supposed non-compliance with statutory requirements fail, and it stands, so far as these criticisms are concerned, as a valid mortgage, vesting in the defendant a legal right to the benefit of the security, and therefore not void as to the complainant or any other creditor who may subsequently have obtained a lieu upon the mortgaged property.

The complainant also claims that he has a lien on the goods named in the chattel mortgage by virtue of his distraint, and although it was levied subsequently to the making and recording of the defendant Kate McCrane’s chattel mortgage, he charges that it is prior thereto, because he alleges that the mortgage was without present consideration, and was made for the purpose of defrauding and delaying creditors, and changing the title to the chattels to avoid the lien of the complainant’s distraint, and he claims that as a creditor he is entitled to disregard the lien of the defendant’s mortgage.

This assertion of priority requires an examination of the nature of the disputing claims of the several parties, and how far the proofs sustain the complainant’s charges.

The claim of the complainant is based upon a rent which accrued on the 1st day of February, 1897. He levied under his landlord’s warrant on the 9th day of that month. The lien of his distraint attached at the time of the actual seizure under the warrant. Woodside v. Adams, 11 Vr. 419. It was this levy which so fastened his claim upon the mortgaged goods that he is in a position to be considered a creditor within the meaning of the Chattel Mortgage act, holding a status by which he can question the efficacy of precedent liens. Haston v. Castner, 4 Stew. Eq. 697; Currie v. Knight, 7 Stew. Eq. 487; Graham Button Co. v. Spielmann, 5 Dick. Ch. Rep. 123. Before the rent accrued it was not an asset or credit of the complainant. A money rent not due, such as is reserved in the complainant’s lease, is not dehitum in prcesenti, solvendum in futuro ; it becomes a debt for the first time when it accrues. Had the complainant died before the rent accrued, it would not have gone as part of his assets to his personal representatives to pay his debts, but with the land, as incident to the reversion, to the succeeding holder of the title. If the complainant, during this period before the rent came to be due, could assert the holding of even a latent equity, it is certainly as favorable an attitude as he could possibly claim. He had no charge or lien whatever on his tenant’s chattels. It required the statute of 8 Anne c. 14 (Gen. Stat. p. 1915 § 4) to save the landlord’s rent from the sweeping effect of a fieri faoias levied on the tenant’s goods.

It was while the complainant’s claim was in this undetermined condition — a mere latent equity, of the existence of which the defendant is not shown to have had any knowledge — that her chattel mortgage was made, delivered and recorded, and she thereby acquired a fixed legal right against the mortgagor’s chattels. The complainant’s equity, if it may be so defined, became fastened on the mortgagor’s chattels more than a month after this by the distraint. The complainant, to secure this lien, parted with neither money nor anything of value, and made no change whatever in his position. He is neither a subsequent bona fide purchaser nor a bona fide mortgagee such as the Chattel Mortgage act contemplates. He is simply a creditor who has secured his claim by obtaining a lien upon the property of his debtor, subject to antecedent liens. The fact that his debt is charged as a lien upon the goods does give him a status from which he can attack other liens claimed to be precedent, but it does not, ipso facto, give him a right superior to such preceding liens. That superiority depends upon the existence of some infirmity in the apparently precedent lien which makes it, as to his claim, inferior.

Turning to the claim of the defendant under her chattel mortgage, the proofs show beyond all question that the consideration of her mortgage was money that she had earned by her own labor while at service, or which had been given to her by other persons than the mortgagors. This money she had from time to time loaned to the mortgagors, and had received their notes as evidences of their debt. The notes had all come to be due and payable when the chattel mortgage was taken; the complainant’s rent was not yet due. If there had been a purpose to defraud the complainant as he alleges, the mortgage could have been made immediately payable and the property sold before the complainant could have acquired a lien. Instead of this, time was given to the mortgagors, and proceedings to sell were only taken after the complainant had himself seized the goods by his distraint, and thus forced a realization. Any doubts which might have been raised by the fact that one of the mortgagors is the father of the mortgagee, are dispelled by the proof of the origin and character of her claim exhibited in her frank statement, which is probable in itself and wholly unrefuted. There is no showing in the case of any indication that there was any purpose to benefit the mortgagors or to defraud or delay their creditors; on the contrary, the proof is clear that the sole intention which induced the giving of the mortgage was to secure the payment of the mortgagee’s debt. The mortgagee obtained from her debtors, without any fraudulent purpose or action, a preference by way of chattel mortgage. The complainant afterwards, when his rent accrued, pursued his legal remedy and secured a lien on the mortgagor’s chattels.

The question is narrowed down to the single inquiry, can debtors who owe two or more creditors, secure one of them by giving her a valid lien upon their property, where it is done without fraudulent design and simply to prefer the favored creditor? I do not think it has ever been denied that they can. In Holbird v. Anderson, 5 T. R. 235, such a preference was sustained, though the disputing creditor had judgment and was about to issue execution, and these facts were made known to the preferred creditor before he was given his preference. And it makes no difference if an honest preference of one creditor defeats the claims of the others. Hendricks v. Mount, 2 South. 743. So long as the debtor exercises this right honestly, his acts, whether the preference be created by sale or pledge, are unimpeachable. Essex Freeholders v. Lindsley, 14 Stew. Eq. 194; Jones v. Naughright, 2 Stock. 298. “ That a debtor in insolvent circumstances may prefer certain creditors has been too long the received law of this state to be questioned now.” National Bank v. Sprague, 6 C. E. Gr. 539. And in Bank v. Cummins, 12 Stew. Eq. 580, the right to prefer was supported, even when the preferred creditor was aware at the time that the vendee, who gave him such a lien for a debt due from his vendor, had taken his title in fraud of the creditors of the vendor. Such a proposition was held not to be a participation in the fraud, but on the contrary to put the property to its legal use by applying it, though by a preference, to the payment of the debts of the fraudulent vendor.

The tests turn not upon the right of the creditor to prefer, nor on the failure of the non-preferred creditor to secure, his claim, but upon the honesty of the parties to the transaction in simply giving and receiving a preference and the absence of any intent to secure a benefit for the debtor or to hinder or delay his other creditors.

The case of Milton v. Boyd, 4 Dick. Ch. Rep. 142, to which my attention has been called, has no application to the case now before the court. In that case the mortgage of the complainant, Milton, was made in consideration of a present value passed for it, and, without any recording, gave to Milton a legal title as against the mortgagor and all the world except creditors and subsequent purchasers and mortgagees in good faith, under the fourth section of the Chattel Mortgage act. The mortgage of the defendant, Boyd, was subsequently given to secure a preceding debt, but was recorded before the Milton mortgage. The court held that the previous record of Boyd’s mortgage did not protect him against the superior equity of the prior though unrecorded mortgage of Milton, because Boyd was not such a bona fide mortgagee as the statute contemplated, in that he paid nothing and parted with nothing, and did not change his position in any way, at the time he received his mortgage. He took the interest which the mortgagor had, but subject to the equities with which it was then charged, one of which was Milton’s mortgage. There was also, in that case, strong evidence of a fraudulent design on the part of the defendant, Boyd, because he secreted the fact that he had an agreement for a mortgage for several years before he took it, and thus enabled the mortgagors to secure a credit by their apparent ownership of their goods, though they were bound to him all the while to pledge their goods to secure his debt. There is, however, in the case cited, a distinct and express recognition of the right of preference to be exercised by a debtor in failing circumstances., by which he may secure a favored creditor, provided his action' and that of the creditor be free from fraudulent design to protect the debtor or defraud his creditors. Milton v. Boyd, Dick. Ch. Rep. 153.

In the ease now before the court, the complainant had, at the most, a mere latent equity, of which the defendant mortgagee is not shown to have had any notice until after her legal right had been fastened upon the mortgagor’s goods by the delivery and record of her mortgage. After this had been fully accomplished, •the complainant for the first time acquired a lien by his own sole act, without giving anything for it or surrendering any right. Neither his equity nor his legal right is in any way superior to that of the defendant. He is, of course, not a bona fide purchaser or mortgagee as contemplated by the statute and interpreted in Milton v. Boyd, nor is he even a bona fide lien-holder within the spirit of that case, because he secured his lien as a mere volunteer, uninvited, and without the passing of any present consideration. He cannot successfully attack the defendant’s mortgage as a creditor under the chattel mortgage act, because her mortgage is prior in point of time of its delivery, and the mortgagee has complied, as above shown, with all the requisites prescribed by that act which are necessary to make her chattel mortgage valid against creditors and subsequent bona fide purchasers and mortgagees.

This branch of the case has been considered in the most favorable light for the complainant’ that the circumstances shown would justify, treating the chattel mortgagee as if her mortgage had been given simply to prefer a pre-existing debt and not as a bona fide mortgagee who had changed her position to her debtor in order to secure her lien. I have discussed her equities as only equal to those of the complainant and becoming superior by the recording of her mortgage, by which they were developed into an actual legal right before the complainant acquired any lien upon the property. There is another view which might be taken of her status which would place her in a much more substantial position as to the consideration of'her mortgage. When she gave up the due and payable notes which might have been prosecuted immediately and took a bond, payable at a future date, in consideration that its payment should be secured by the chattel mortgage, it might be claimed that she gave up her then existing and perfected right to collect her money as a consideration for her present lien, and that she' thus became, a bona fide mortgagee in the broadest sense of the term. All this time the complainant had no fixed and’ascertained charge on the property, and it is only after the defendant’s equity had become an actual legal right that his own claim became a lien by his purely voluntary act. The point was not argued and I do not deem it necessary to pass upon it.

I see no reason in any of the objections to the defendant’s mortgage which would justify the issuing of an injunction. I will advise that the order to show cause be dismissed and the restraining order dissolved.


source: Caselaw Access Project

author: Grey, V. C.

license: Public Domain

text:
    Richard S. Bacon et al. v. Hubert Devinney et al.
    1. When a husband and wife both make payments to meet the dues of building association stock, standing in the name of the wife, the presumption is that his payments were gifts to her, and a resulting trust in favor of the husband because of his payments will not arise until this presumption is rebutted by evidence sufficient to establish such a trust.
    2. The heirs of a deceased wife have, as against her surviving husband, an equity to have stock, pledged by her in her lifetime for the payment of a mortgage on her lands, applied to satisfy the mortgage before recourse is had to the lands.
    3. They have a right to require that her personal estate which comes to the hands of her surviving husband, shall be applied to the payment of the wife’s debts, of which the wife’s bond, secured by a mortgage on her lands, may be one, before recourse is had to her lands.
    4. An attempt to obtain the release of the stock from the pledge, so that the mortgaged premises may be made primarily liable, will be restrained by injunction.
    On bill and answer.
    Sarah B. Devinney was, in her lifetime, the wife of the defendant, Hubert Devinney, and sister of the complainants. She died intestate, and they filed this bill as her heirs-at-law. The bill alleges that prior to her marriage she was the owner, in her own name, of two shares of stock of the Franklin Loan and Building Association of Salem. After her marriage she acquired two more shares; that she had a trade and occupation, and worked at the same, and received the income for her own use and paid for the shares up to the time of her death from her own earnings. On the 23d day of September, 1885, she took title to a house and lot in Salem, by conveyance to her in fee-simple in her own name. She borrowed $700 from the building association, and on the 24th of September,- 1885, she and her husband, Hubert Devinney, gave a bond to the association to secure the payment of $700 and interest thereon, and secured the payment of the bond by a mortgage (on the house and lot purchased by her) made by her and her husband to the building association.
    At the time of obtaining the loan, Mrs. Devinney pledged, as -collateral security for its payment, the four shares of stock of the association above named, according to the terms of the constitution and by-laws of the association, by which each member is entitled to borrow $200 for each share of stock which he may-hold. The two shares of stock first purchased by Mrs. Devinney matured and were credited on the bond at the valuation of $200 each, leaving the balance still due on the bond $300. After this, on the 20th of October, 1891, Mrs. Devinney, while seized of the house and lot, died intestate, never having had any child of her marriage with the defendant, Hubert Devinney, and leaving her surviving her husband, and also three brothers, Richard S. Bacon, Joseph H. Bacon and Daniel D. Bacon, the complainants in this suit. These three brothers were her only heirs-at-law. The bill alleges that Mrs. Devinney, up to the time of her death, regularly met the monthly dues and interest on the stock out of her own earnings, and that after her death the complainants permitted .her husband to occupy the premises and receive the rents, and that since the death of the wife he has paid the dues and interest, and has occupied the premises and received the rents. In October, 1896, Devinney applied to the -board of directors of the building association, requesting them to assign the mortgage made by him and Mrs. Devinney, and now reduced to a principal sum of $300, to a person to be named by him, and thus released the stock held by the association as collateral for the payment of the mortgage. The bill further states that the board of directors granted the request of Devinney and passed a resolution in accordance with his wish, and that they were about to transfer the mortgage unless restrained by this court. .The complainants allege that the transfer with the purpose named would deprive them of the benefit ■of the pledge of the stock for the payment of the loan, and subject the real estate, which they have inherited from their sister, Mrs. Devinney, to the full payment of the remaining mortgage indebtedness, in violation of the scheme of loan and of the agreement under which it was made. The complainants claim that they are entitled to the benefit of this agreement and scheme of loan, and to the collateral pledged for the loan. They ask that the building association may be enjoined from making any assignment without the consent of the complainants.
    The defendant, Hubert Devinney, is the only one who answers. His answer substantially admits the statements set forth in the bill, except that he denies that Mrs. Devinney always paid the monthly dues from her own separate funds, and he says that the dues thereon were, for the most part, paid by himself or with his earnings, from the time of their marriage up to the time of Sarah Devinney’s death, on October 20th, 1891, and since that time the defendant says he paid all of the dues, and has paid the insurancé, taxes and repairs on the property. The ■defendant further states that in 1874, just prior to their marriage, ■Sarah Devinney, then Sarah Bacon, took out three shares of .stock in the association, and that he and his wife paid the dues •on this stock until 1883, when one share was sold and the two ■other shares in 1886 were credited on the mortgage. The defendant alleges that he earned considerable sums of money from 1874 to 1886, and that he gave all his earnings to his wife to be applied to her housekeeping expenses and to the payment of the building association dues. He states that he had not made .actual application to have the mortgage assigned, and that he had only made inquiry for that purpose, but he declares that in ;good faith such a transfer should be made, and that he will make a formal application for such transfer, unless restrained by ■.this court from so doing.

      Mr. William T. Hilliard, for the complainants.

      Mr. Jonathan W. Acton, for the defendants.
   Grey, V. C.

This cause has been presented on final hearing on bill and answer. There is but little variance between the allegations of the bill and those of the answer, the only matter of substance being the statement in the bill that the decedent, Mrs. Devinney; paid the dues &c. for the shares of the stock pledged, up to the time of her death, from her own earnings. The husband defendant denies that she always paid these dues from her own separate funds, and says- they were for the most part paid by himself or with his earnings, up to the time of her death, and since that time he has paid them all, and also the insurance, taxes and repairs of the property. So far as the answer denies the allegations of the bill it must be taken at this hearing to be true. The defendant does not deny the statement in the bill that since his wife’s death he has had the use of the property without paying any rent.

. It nowhere appears in the bill or answer that the defendant supposed, believed or understood that Mrs. Devinney, in receiving title to the lands in her own name, was acting in bad faith toward him, or that he had any agreement with her, or that he had given any direction to her that she should hold this title for his use. He joined in the making of the bond and mortgage, and he must thereby have had actual knowledge that the title to the premises stood in Mrs. Devinney’s name and not in his. The law casts upon him knowledge of the fact that when the title stood in her name, and there were no children of the marriage, it would, upon her decease intestate, descend h> •her heirs-at-law, and nothing in the answer shows that he had any other expectation. What he seeks by his answer is not to have the title to the premises declared to have been mistakenly conveyed to his wife, or to have been conveyed to her in trust for him, but a decree that the stock which had been pledged by the assent of himself and of his wife in her lifetime to the association for the payment of a mortgage debt, may be permitted to be diverted, and by the plan set out in the bill, changed from the pledge made of it by the parties at the time of the original agreement. The substantial facts set forth in the bill are not disputed in the answer. The denial goes only to refute the statement that Mrs. Devinney paid for all the dues and interest out of her own separate estate, and to declare that the defendant, Hubert Devinney, in great part, paid for the dues and interest on the stock, but there is no denial that in making these payments the defendant, Hubert Devinney, knew that they were relieving the title standing in the name of his wife from the charge of the mortgage debt.

The admissions in the pleadings show that the husband and wife arranged that this title to the lands should stand in the name of the wife, and the funds of both were used indiscriminately to pay off the principal and interest of the mortgage debt, without any understanding or agreement that the payments of the husband should secure to him any rights in the property. The answer, in stating the disposition he made of his earnings, admits that he always gave all his earnings to his wife, to be applied to her housekeeping expenses and to be applied to the payment of the building association dues.” This is not the language which would be used if the statement was intended to indicate that the moneys were paid on an understanding or belief that a trust for his benefit was to arise from their payment. He knew this money would aid to relieve his wife’s land of the charge of the mortgage, and he gave it to her for that purpose.

Under these indefinite circumstances, when the husband made some payments out of his separate estate, and the wife some out of hers, and there is no evidence that the money was paid on any agreement or belief that the husband was to be benefited, no trust arose in his favor, nor could he rightfully claim to be entitled, either at law or in equity, to any interest in the property, the title to, which he knew stood in his wife’s name when he made the payments. In cases where the parties stand in such intimate relationship to each other, the presumption is that the payments were intended to be a gift until by satisfactory proof the contrary is established. If they had been strangers, the payments made by one and the title granted to another, with no explanatory circumstances attending the transaction, would raise a presumption of a resulting trust in favor of the person paying the consideration ; but where the relations of the parties are those of husband and wife, or parent and child, the presumption is that the payment was a gift until overcome by proof. The proof necessary to overcome this presumption must be as satisfactory and explicit as that required to establish a resulting trust. Peer v. Peer, 3 Stock. 432 ; Reed v. Huff, 13 Stew. Eq. 233.

At the time the stock was pledged, Mrs. Devinney was the holder not only of the title to the stock, but also of the title to the lands mortgaged. Her husband joined her in the bond and mortgage and obviously knew of the pledge of the stock. She had a right to dispose of this property in this way, and those who succeed to her rights in the stock and to the title to the lands receive what they get subject to such charge and disposition as she in her lifetime had made of them, respectively. The rights of her husband are to take the ownership of the stock subject to the pledge; the rights of her heirs-at-law are to take the ownership of the land subject to the mortgage and with the benefit of whatever contract touching the payment of the mortgage debt was outstanding and existent at the time of the death of the deceased. "What is claimed by the defendant is the right, by the plan indicated in the bill (the purpose to carry which into effect is substantially admitted in the answer), to take away from the complainants the benefit of the bargain made by the decedent in her lifetime, by which the stock stood primarily pledged for the payment of the mortgage debt.

The principle controlling this case has been established in New Jersey in the court of errors in the case of Herbert v. Mechanics’ Building and Loan Association, 2 C. E. Gr. 497, where a member of a building association had secured a loan by mortgage, and also by the assignment of ten shares of the stock, and subsequently conveyed the premises; judgments were afterwards recovered against the mortgagor, and the ten shares of stock-were levied on. The court held that the equity which the grantee of the mortgage had acquired as against the mortgagor and the association, to have the assets so marshaled that the debt due the association should be paid primarily out of the shares of stock, was not impaired or affected by the intervention of the judgment creditors; and it further held that the rights of the creditor who is entitled to have the assets of the debtor marshaled is absolute against the debtor himself, and cannot be taken away by the action of subsequent creditors. The superior equity supported in the case cited was that of a grantee to have a mortgage subject to which he bought first satisfied out of shares of stock pledged with the mortgage as collateral security for the mortgage debt. The right was sustained against creditors of the pledgor who had acquired a lien. In the case in hand the heirs-at-law insist upon their right as against the administrator or surviving husband of the intestate who made the pledge. In principle the equities in the case cited and that, under consideration are the same. The lien of the creditors' levy, in the case cited, gave them no more and no less rights than were outstanding in the pledgor, and the interest which the administrator took from his decedent pledgor, in the case now under consideration, was that which she held at the time of her death. The administrator or executor takes subject to charges created by the pledgor decedent in his lifetime (Glaholm v. Rowntree, 6 Ad. & E. *710), where the point was fully discussed in the king’s bench on the question of the liability of executors to account for assets pledged by the testator. In Phillipsburgh Building Association v. Hawh, 12 C. E. Gr. 355, stock pledged to secure a first mortgage was, as between the association and a second mortgage, applied to pay the first mortgage, before recourse was had to the land, and the levy of an execution against the pledgor’s interest did not bar this equity. So in Sherron v. Acton, Assignee, in this court — opinion filed January 6th, 1890, not reported — the same equity was supported in favor of a second mortgage, against an assignee for benefit of creditors.

But, accepting the right of the husband under an administration to take, Jure mariti, the personal estate of his deceased intestate wife, he must apply these assets to the satisfaction of his wife’s debts, and he can take only the surplusage. What he gets on her death intestate, leaving assets, is a right to take her personal estate with a liability to account only to creditors. Heard v. Stamford, 3 P. Wms. *410; Kent Com. *145.

Even if there were not special pledge of this stock to pay the building association debt, it must be applied as a part of the intestate’s personal property to pay her debts, of which the bond to the association is one. The personal estate of the decedent is the primary fund for the payment of debts. This is the common-law rule, and in our state it has been frequently enforced. The heir-at-law has enforced it against the executor. Keene v. Munn, 1 C. E. Gr. 398; Krueger v. Ferry, 14 Stew. Eq. 432.

The answer of the defendant admits that it is his purpose, and he claims his right, to procure the mortgage upon the complainant’s property to be so transferred that the stock pledged for the payment of the same debt may be released, and thus to defeat the pledge of the stock made by the decedent, and make the land, and not the personal property, the primary fund out of which the debt of the decedent must be paid.

I will advise that the defendants be enjoined from this course, in accordance with the prayer of the complainant’s bill.


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    Emil R. Thiefes, administrator cum testamento annexo of Gertrude Loewendahl, deceased, v. Joseph Mason, executor &c. of Israel Loewendahl, deceased.
    1. An executor derives Ms power from the will, and not from its probate. He may dispose of the property of the testator before probate. .
    2. An executor who does not prove the will of his testator, but disposes of Ms personal property otherwise than as directed by the will, is responsible to the legatees of the testator for this conversion, and his executor or administrator is likewise responsible to such legatees, but not to the administrator cmm testamento annexo of the first testator.
    3. A bill filed for the recovery of definitely-ascertained sums of money and showing no occasion for an accounting, no breach of trust, fraud or other element of equity jurisdiction, will be dismissed on the ground that adequate remedy exists at law, where the answer of the defendant prays, on this ground, the same relief as if he had demurred.
    4. And on such a prayer in the answer, if it appears by the proofs that the sum recoverable is less than §50, the bill will be dismissed at final hearing.
    On bill, answer, proofs &c.
    Joseph Loewendahl and Gertrude Loewendahl, were man and wife. Gertrude died in 1885, leaving Israel her surviving, but without any issue. Her heirs-at-law and next of kin were her brothers and sister, none of whom are parties in this suit. Gertrude left a will dated December 19th, 1884, whereof she appointed her husband and brother Charles executors. On her death, her husband took possession of whatever property, real and personal, she left, and, among other things, of her will and other papers. He survived his wife and died in 1894.
    Gertrude’s personal property consisted in great part of a share in her parents’ estate, which, by her will, she gave to her husband during his life, and on his death, one-half to her brother Charles, the other to be divided among her other brothers and sister. She also left some jewelry, books, a piano and some household furniture. These also she gave to her husband for life, and on his death to her brother Charles.
    Israel Loewendahl did not prove Gertrude’s will, nor did the other executor. He took possession of the property and received several hundred dollars (reichsmark), in 1889, through a firm of bankers, from the representatives of the estate of Gertrude’s parents. Israel died in 1895, testate, the defendant, Joseph Mason, being the executor of his will. After Israel’s death, Gertrude’s will was probated by the complainant, who took out letters of administration with the will annexed.
    The complainant files this bill as administrator with the will annexed of Gertrude Loewendahl, sole complainant, against Joseph Mason, executor of the will of Israel Loewendahl, sole defendant, setting out the will of Gertrude, and alleging that Israel had used and disposed of part of Gertrude’s personal property, and that some of it was sold and converted by the defendant as executor of Israel’s will since his death. The complainant also alleges a demand made upon .the defendant for $500, the money paid to Israel in 1889, and for $150, the value of Gertrude’s other personal property. He states that the demand for payment of the $500, with interest, was agreed to by the defendant under authorization by letters from the parties interested in Israel’s estate, but that the defendant now insists that he cannot pay without the protection of a decree. The complainant prays discovery, and that the defendant may be decreed to pay him the $500, and interest from the death of Israel, and the $150, with interest from the same date.
    The defendant answers, praying the same benefit as if he had demurred because the complainant, if entitled to any relief, might have received it at law. He admits that he has disposed of' Israel’s property; that the proceeds are in his hands for distribution. He also admits that demand was made upon him for the moneys referred to in the complainant’s bill, and says he gave the complainant notice that his claim was disputed and to sue according to the statute. He admits that he advised the payment of the two thousand reichsmark — the $500 — provided that the payment should be in full discharge of all matters in dispute between parties interested in the two estates of Israel and Gertrude, and that the parties interested in the estate consented to the proposed settlement, but before any money was paid, they revoked the authority to settle, and since that time he has been without authority of the parties to make any payments. He admits that he sold the personal property he found at the residence of the testator, but he denies that the complainant is entitled to be paid the moneys he claims.

      Mr. Wheaton Berault, for the complainant.

      Mr. William W. Benthall, for the defendant.
   Grey, V. C.

This cause came on for hearing at the same time as another between the same parties regarding the real estate of Gertrude Loewendahl, and it was in open court agreed that all the testimony taken should be deemed to be testimony in either cause, so far as applicable.

The correspondence submitted indicates that the defendant made an effort to obtain the consent of the beneficiaries under Israel Loewendahl’s will to settle the claim of the complainant for the $500 which Israel had in his lifetime received and converted to his own use, but the evidence shows that before the attempted settlement was finally agreed upon the interested parties differed in their views, and the defendant gave notice that the claim was disputed.

The complainant sues as administrator cum testamento annexo for discovery and to recover a definite sum of ■ money paid to the defendant’s testator in his lifetime as, either, executor of the complainant’s testator or as life tenant entitled to the enjoyment of it under her will, and also to recover the value of certain goods of the complainant’s testator which it is shown the defendant’s testator had received in his lifetime either as executor or as legatee for life. The sum of money and the goods were portions of the estate of the complainant’s testator, and were proven to have been so converted by the defendant’s testator in his lifetime (except the piano &c. hereinafter referred to) — that they no longer existed in specie at the time of the death of the latter.

As to the money received by Israel in his lifetime, there is no pretence of proof that it remained in specie, nor, indeed, was the money received by Israel ever the property of Gertrude in the form in which it came to him, for at her death, in 1885, it was a mere right or chose in action to receive a share of her parents’ estate; this was so realized that in 1889, after Gertrude’s death, it was satisfied by the remittance of the $472.29 to Israel. He used it as his own in his lifetime, and at his death it was either consumed or so mingled with his own estate as to be undistinguishable, and the defendant, Israel’s executor, never received this fund in any identifiable shape.

The other personal property of Gertrude (except the piano &c. hereinafter dealt with) was likewise disposed of by Israel in his lifetime, and when his executor, the defendant, assumed charge of his property, none of her personalty (except as stated) could be in any way identified.

The complainant is the administrator cum testamento annexo of Gertrude. Israel, in his lifetime, was the executor of her will. He did not prove the will, but he was none the less executor. An executor may receive and dispose of the personal estate of the testator before probate. Brazier v. Hudson, 8 Sim. *67; Wankford v. Wankford, 1 Salk. *301. He derives his power from the will and not from the probate. Comber’s Case, 1 P. Wms. *768. It is only in order to assert his right to sue as executor that he must first have probated the will. Humphreys v. Ingledon, 1 P. Wms. *753. When Israel converted the estate of his testatrix to other uses than those directed by the will, he became liable to the legatees for his wrongdoing, and they have a right of action against his executor to recover for the injury. The complainant in this case does not represent these legatees of Gertrude in any way. He is administrator cum testamento annexo of Gertrude. In this capacity he has authority to take the goods of the testatrix, but he has no power to recover for an injury done by his predecessor, the executor of the will, by disposing of or converting the estate of the testatrix. Brownlee v. Lockwood, 6 C. E. Gr. 256. Eor such a conversion of the estate of the testator the representative of the deceased executor must account to the legatees. Carrick v. Carrick, 8 C. E. Gr. 367. A very clear exposition of the principle on which this rule is based will be found in the opinion of the late Justice Bradley in the case of Beall v. New Mexico, 16 Wall. 540.

The letters on which the complainant sues are apparently those of immediate administration cum testamento annexo, and not those of limited administration de bonis non administratis by the executor. In actual fact, as appears in this ease, there had been a partial administration by Israel Loewendahl, the preceding executor, though without proof of the will, and he had by his disposition of the testatrix’s estate so converted a great part of it that it no longer existed in specie as. it had at her death. The form of the letters issued by the probate court does not alter the fact that there has been a partial preceding administration, by reason of which the complainant can only administer those goods &c. of Gertrude which remain not administered, nor can it deprive those legatees interested in Gertrude’s estate of their direct right of action against Israel Loewendahl’s executor because of the wrong he did them by his disposition of Gertrude’s estate; for it is obvious that the legatees and the new administrator cannot both have a right of action for the conversion by the executor. On the same form of administration with the will annexed the plaintiff sued in Wankford v. Wankford, ubi supra, seeking to enforce a claim against the heirs of a deceased executor, but the king’s bench sustained the defendant, holding that the executor, who had partially disposed of the testator’s goods, though without probate of the will, was, in fact and in law, executor of the will, and entitled to all the rights of an executor. Necessarily, such an executor became charged with all the responsibilities of the place, one of which was the liability to the legatees of his testator for his disposition of the estate. The representatives of the deceased executor are still liable to those legatees for this default, and his successor in the administration of the estate has no right to call on those representatives to account to him for the goods converted, or, technically stating it, administered. Beall v. New Mexico, ubi supra.

This leaves the claim for the piano, books and music the only further question in this case. These articles appear to have been a part of the personal estate of Gertrude Loewendahl which came to the hands of the defendant in specie as they existed at the time of Gertrude’s death. The defendant sold them the piano for $15.70 and the books and music and a book-case for $2.50, making a total of $18.20. There is no other proof of the value of any of those articles than the prices at which they were sold when disposed of by the defendant, nor is there any indication that these prices were not their full value. The defendant has in his answer objected that the remedy of the complainant, if he had any, is in a court of law, and he now insists that this court should not retain this bill to enforce a payment of so trivial a sum as $18.20. Lord Bacon’s ordinance declaring that all suits under the value of £10 are regularly to be dismissed has been determined to be forceful in this state in several cases. Swedesboro Church v. Shivers, 1 C. E. Gr. 453 ; Allen v. Demarest, 14, Stew. Eq. 164.

The claim of the complainant is merely for the payment of money. There is no allegation of fraud or other element of equity jurisdiction which should induce the court to retain the further consideration of this case. The rule is based upon grounds of public policy and is intended to discourage litigations in this court which involve only unimportant and frivolous controversies. Story Eq. Pl. *500. It was enforced at final hearing, when it appeared that the balance due to the plaintiff did not amount to £10, and the bill was dismissed, even where there was no demurrer. Brace v. Taylor, 2 Atk. 253.

The bill filed is apparently one for discovery and relief. The complainant, though asking for discovery, prays an answer without oath. An answer thus filed without oath may, as to its admissions, be evidence against the defendant who answers (Hyer v. Little, 5 C. E. Gr. 443), but when a complainant invites an answer without oath, he. deprives it of any evidential quality for the defendant, under the operation of our statute. Gen. Stat. p. 376 § 23 ; Sweet v. Parker, 7 C. E. Gr. 455. So far as his bill invokes the aid of this court to obtain a discovery, this voluntary refusal by the complainant to credit the invited disclosures of the defendant would seem to be an abandonment of this element of jurisdiction. The other relief he asks is a decree for the payment of the sum of money, part of Gertrude’s estate, disposed of by Israel in his lifetime as above described, and also the value of other personal property, part of which Israel disposed of in his lifetime, and the residue of which the defendant converted into money.

As to the property converted by Israel, it is to be taken to have been administered by him as above shown, and the right of action is not in the complainant. Irrespective of the view above taken of his claims, there is no ground stated on which the jurisdiction of this court is necessary to give the complainant full relief. • The substantial right which the complainant asserts is the obligation of the defendant to pay him a definitely-known sum of money, and also for the value of certain known and named goods. No accounting is prayed, nor does any seem to be required, as the sums claimed are already ascertained. The courts of law, in a case of this character, have jurisdiction to give him full and adequate relief. The defendant in his answer alleged that the matters complained of are cognizable at law, and that the complainant is not in respect to them entitled to any relief in this court and prayed the same advantage as if he had demurred to the bill. Dan. Ch. Pr. *714 note, *715. At the hearing he insisted that as the only matters on which the complainant based his suit were merely claims for ascertained sums alleged to be due to the complainant, without the setting up of any fraud and breach of trust or need of an account or other ground of equity jurisdiction, he had a full, adequate and complete remedy by suit at law. I think this. contention is justified.

The complainant, upon the view above expressed, has shown no ground which puts him in a position to invoke the jurisdiction of this court. I will advise that the bill should be dismissed.


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    Whitall E. Mingin v. The Alva Glass Manufacturing Company et al.
    1. The right to a preference in payment of their'wages, given to workmen of an insolvent corporation, is wholly statutory, and does not vest until the happening of the statutory requirements.
    2. It is created only when insolvency proceedings are begun, and then arises in favor of those persons, and for such amounts and under such conditions as the legislation on the subject then in force may prescribe.

      3. Apprentice workmen, who have allowed their wages to accumulate upon an agreement that they should be paid at the end of their apprenticeship, have no more extensive right to a preference than have any other unpaid workmen in the regular employ of the insolvent corporation.
    On petition of receiver &c.
    The bill of complaint was filed on the 27th day of November, 1895, and has resulted in a decree that the defendant corporation is insolvent. A receiver has been appointed, he has realized upon all the assets of the corporation, and reports that he now has in hand the sum of $4,423.09, from proceeds of sales &c. Claims have been filed with the receiver as follows:
    By workmen, for wages.......................................§10,146 89
    By apprentices, for wages held back....................... 358 20
    By C. W. Shoemakex-, for salax-y........................... 2,068 39
    By B. Elmer Shoemaker', salary............................ 2,234 08
    By Cumberland Mfg. Co., for services of C. W. Shoemaker and B. Elmer Shoemaker........................ 629 76
    By other creditors............................................... 17,326 83
    Total of all claims filed with receiver............§32,764 15
    The receiver is now ready to state his final account and to distribute to those claimants who are entitled to it the balance which may be found to be in his hands. The balance which will remain for distribution is already indicated to be insuflScient to meet the claims of those who assert preferences under the statute for wages as employes in the service of the corporation, if these claims are admitted as entitled to payment to the full amount named therein as preferences. Under this situation the counsel representing the different classes of claims appear before the court and enter into a stipulation declaring the facts in the case applicable for the ascertainment of the rightfulness of their several claims; and to this stipulation they append a schedule showing the names of the several workmen and apprentices, the amount of their schedule claims for wages, when their work began and ended.
    The apprentices claim that their wages were retained in trust for them by the insolvent company, upon an understanding that they should be returned to them on the completion of their full term of apprenticeship; that the intervention of the insolvency proceedings before the completion of their term of apprenticeship was occasioned by no fault or action of theirs; that this alone prevented the full service of their term of apprenticeship, and that their money, retained as above stated, ought properly to be payable to them in full out of the assets in the hands of the receiver. They also assert a right to a preference for wages under the Corporation acts.
    The other workmen claim that the amounts respectively due them for wages are preferred claims under the provision of section 639 of the General Corporation act of 1875 (Rev. 1877 p, 188), as enlarged by the act of March 31st, 1887 (P. L. of 1887 p. 99), and that they hold this preference as a vested interest and should be first paid in full, or if the total of their claims exceed the balance in hand, that they alone should participate in the division of it. They insist that the act of 1892 (P. L. of 1892 p. substantially re-enacted in the General Corporation act of 1896 (P. L. of 1896 p. 808 § 88), which limits the preference of employes to wages earned during the last two months preceding the assumption of jurisdiction in insolvency,, cannot be used to affect their vested right to their preference, and they declare they are controlled by the above-cited preceding acts of 1875 and 1887, and have an unlimited preference for all wages due them.
    On the part of the general creditors, it is claimed that no preference should be allowed to any of the workmen to whom wages are due from the corporation by reason of the statutory provisions above referred to, or because of the retention of a-portion of the wages of the apprentices until the completion of their term, but that an equal dividend should be declared to all1 claimants. The general creditors insist, however, that if any preference is given to the laborers, the act of April 8th, 1892,. has superseded all previous legislation giving wages preference in case of the insolvency of a corporation, and that the provisions of the Corporation act of 1896 (P. L. of 1896 p. 808) are identical with those of the act of 1892.

      All parties join with the receiver in the application to the court for direction as to the mode in which the surplus remaining in the hands of the receiver shall be distributed.

      Mr. Austin H. Swackhamer, for the complainant and workmen claimants.

      Mr. William T. Hilliard, for the defendant, and for C. W. Shoemaker and R. Elmer Shoemaker and Cumberland Glass Manufacturing Company.

      Mr. Jonathan W. Acton, for the apprentice claimants.
   Grey, V. C.

As to the claims of the apprentices. The portion of their wages earned but held back has no greater equity than the unpaid portion of any other class of workmen’s wages. There is no assertion that the amount so held back exists in any specific and separate form held in custody for them; no trust fund has been created or held for these unpaid wages. They stand merely as a credit in favor of the apprentices, for which they have a right of action on breach of the contract by the company, as any other workmen may have under like circumstances.

I am referred to the case of Bedford v. Newark Machine Co., 1 C. E. Gr. 121, as declaring that the apprentices have some equity superior to that of other workmen in the employ of an insolvent company. That case arose like this, on an application for direction to a receiver as to disposition of funds in his hands. The right of the workmen to a lien on the assets of the company in the hands of the receiver, was asserted under section 42 of the act'of 1849, authorizing the establishment of manufacturing companies. That act gave a lien for their wages, in case of insolvency of the company, to laborers in its employ. There were wages due to laborers who had left the employ of the company previous to the act of insolvency, and also to others who were at that time still in its employ. The question in dispute was whether both these classes of laborers were entitled under the statute to a preference; and only those laborers were held to have a preference who were actually in the employ of the company at the time of the suspension of its business operations, which was, under the statute, the act of insolvency. There were also apprentices in the employ of the company, and these were held to be entitled to their wages without regard to the time they were last’ actually laboring for the company, because there was no evidence that they had been discharged from their indentures prior to the act of insolvency, and the refusal or inability of the •company to furnish them with employment did not affect the ■continuance of their employment. For this reason they were ■declared to be within the class of laborers who were in the employ of the company at the time of the suspension of its business, whether actually engaged in the doing of labor or not. 'The apprentices were not given any different or more favorable position than other laborers in the employ of the company, but because of the continuity of their contract under their indentures they were deemed to be within the class of laborers who were in ■the employ of the company at the time of the act of insolvency, within the meaning of the statute.

The act of 1887 (P. L. of 1887 p. 99) changed the law, as -defined by the case of Bedford v. Newark Machine Co., and provided that the lien upon the assets of the insolvent company for wages should extend to all the laborers for services rendered in behalf of the corporation before the date which the court -adjudged to be the time when the insolvency occurred, whether such laborers were in the actual employ of the corporation at that time or not.” "Whatever rights the apprentices have to a preference are secured to them not because they are ■apprentices, but because they are employes, and those rights are in no way superior to those of any other employes of the insolvent company.

It being ascertained that the apprentices and all other laborers are alike in their rights of preferential payment, it remains to be ascertained what those rights are under the facts .of this case.

It may be premised that the privilege of preferential payment is wholly statutory and is always dealt with in statutes-which direct the disposition of the assets of insolvent corporations. These acts prescribe the conditions and characteristics which will entitle a certain class of claimants to preferential payment over other creditors whose claims may be equally meritorious. The privilege conferred is in derogation of the general equity of all creditors to share equally in the distribution of the assets of an insolvent debtor.

The laborers who, in this case, claim a preference, began working for the insolvent company in the year 1890 and while section 63 of the Corporation act of April 7th, 1875 (Rev. p. 188 § 63), as modified by the act of March 31st, 1887 (P. L. of 1887 p. 99), was in force. The provisions of these statutes gave to the-laborers who had been in the employ of an insolvent corporation a lien upon the assets of the company for the whole of the-amount of wages which might be due them, respectively, for all services rendered before the date which the court adjudged to be-the time when the insolvency occurred.

The act of 1892 (P. L. of 1892 p. 426) directed that the workmen should have a first lien upon the assets of the insolvent company, but prescribed that this lien should be limited to the amount of wages owing for services rendered within two months next preceding the date when the proceedings in insolvency were-actually instituted.

This statute has been, in all its material elements, re-enacted' in the Corporation act of 1896. P. L. of 1896 p. 303 § 83... These workmen in this case, who earned wages as above stated, prior to 1892, insist that they should be given a preferential payment, under the acts of 1875 and 1877, for the full amount of those wages, and that the limitation of their preference, under the act of 1892, to wages earned two months next before the assumption of jurisdiction in insolvency, ought not to be applied to them, because they say they took their employment before-the passage of that act, at a time when the acts of 1875 and 1887 were in operation, and they insist that they acquired a vested right to this preference, which cannot be taken from them by subsequent legislation. This argument is based upon the-.assumption that the preference given by the statute of 1875 became a part of this workman’s contract as soon as he accepted •employment, and that, during its continuance, he has always been entitled to the same preference, which could not be taken away by subsequent legislation.

An examination of the several statutes will show that the •employes’ lien has its origin in the taking of jurisdiction by a ■court to administer the assets of the insolvent company. The lien which the laborer has upon the assets of the employing ■company does not. attach coincidently with nor as attendant upon the making of the contract of employment, but only when all the prescribed statutory conditions which create that lien have come into being.

By section 63 of the act of 1875, it was only in case of the insolvency of the corporation that the workmen were given a lien on the assets of the corporation. The time when the lien attached was defined in the Bedford v. Newark Machine Co. Case, ubi supra, to have been the period when the insolvency •occurred.

The act of 1887 enlarged the class of workmen who might have the lien, and extended its benefits to include all claims for ¡services rendered before the date which the court adjudged to be .the time when insolvency occurred. The workmen had no lien under these acts against the assets of a solvent corporation engaged in the conduct of its ordinary business. They acquired none by their contract; it came as a pure gift, and only when insolvency occurred. There is nothing submitted to me which in any way indicates that this company has become insolvent or suspended its ordinary business, whereby the workmen acquired a lien on its assets, before the act of April 8th, 1892 (P. L. of 189%, p. JjBS), was passed, which limited the workmen’s lien to the .amount of wages for services rendered within two months next before the insolvency proceedings were begun. The bill in this ■case was filed on the 25th day of November, 1895; the earliest act of insolvency set out in the bill was the permanent closing of the works, which is stated to have been “about two years ago;” that is, about November 25th, 1893, more than eighteen months after the act of 1892 had on its .passage gone into effect. As the workmen had acquired no lien under the acts of 1875' aud 1887, they had no vested interest' which the. act of 1892-.either could or did impair. The mere chance that they might continue to work for the corporation, until at some indefinite-time in the future, when it might become insolvent and might be indebted to them,, and they might, if. insolvency proceedings-were taken against it, claim a lien on.its assets, is quite too re-r mote a possibility to be recognized as a vested right protected against legislative action by the modification of the statute giving them a preference. .There is no basis for the application of the-principle that vested rights cannot be impaired by subsequent legislation, because there were no rights vested at the time when the subsequent legislation was enacted.

The insolvency proceedings in this case are controlled by the-legislation in force at the time they were begun. This was the-act of 1892, re-enacted in its substance in 1896. ,P. L. of 1896 p. 277. It is under this legislation that the receiver holds-these assets, and it is under it that the lien of the workmen became fixed on the assets of the insolvent company. Their right to a preference was therefore given them by the same act which must guide and control the distribution, and no question-arises as to the taking away of vested rights by subsequent legisr lation. Under this act of 1892 the workman acquires no lien on the assets of an insolvent company until the court has assumed jurisdiction to administer those assets. And even if the company be insolvent, and the court has assumed control of its-assets, the workman, under that act, has no lien upon them, unless it has become indebted to him for wages earned during the-two months next preceding the beginning of the insolvency proceedings. His preferential privilege is therefore created by the-statute which authorizes the insolvent suit, and is wholly dependent upon the institution of the insolvency proceedings. He can reach the assets only through the receiver, who is appointed by the court to administer them. Hinkle v. Camden Safe Deposit and Trust Co., 2 Dick. Ch. Rep. 334.

The statutory provision for laborers’ preference in the act off 1892 differs so radically from the previous legislation on the same subject, as to the extent of the lien and the conditions under which the preference will be given, that it must be construed to stand as a substitute for the earlier statutes on the subject. It is true that there are no words in the statute of 1892 in terms repealing the previous acts of 1875 and 1887, but no repealer is needed where the preceding statute, treating of subjects in pari materia, cannot stand and be enforced with the succeeding statute on the same subject. The act of 1892 is clearly repugnant to the former one in its limitation of the time within which the wages must have been earned for which a preference is given, and being the later statute the act of 1892 must stand as a repealer by construction of the previous acts of 1875 and 1887 as to the extent of the preference.

This question was raised, on somewhat different lines, in Mersereau v. Mersereau Co., 6 Dick. Ch. Rep. 382, and the act of 1892 was in that case held to have superseded section 63 of the act of 1875, and that no words of repealer were necessary where the repugnancy between the several statutes was so manifest.

I will advise an order instructing the receiver to distribute the balance of the assets shown by his account in satisfaction of a prior and first lien for all wages of workmen due for labor done within two months next preceding the date when this insolvency suit was begun, if there are any claims for wages earned during that period. The residue of the balance of assets must be divided pro rata among the general creditors. If wages were not earned during the period named, they are not entitled to a preference and come in with the claims of the general creditors.


author: The Ordinary.

text:
    Susan Davis v. Edward Elliott.
    Upon the facts of this case, the finding of an orphans court that a will signed by a mark is a forgery, set aside as against the weight of evidence.
    On appeal from a decree of the Camden county orphans court, which denies probate to a paper which purports to be the last will of Mary Ann Elliott, deceased.

      Mr. John W. Weseott, for the appellant.

      Mr. Henry S. Scovel and Mr. Frederich Bex, for the respondent.
   The Ordinary.

The paper in dispute is signed by .two ink lines drawn across each other at right angles, which purport to be the mark of Mary Ann Elliott. The validity of the paper, as her will, is questioned upon the insistence that this mark was not made by her and that the document is a forgery.

Before she married, Mrs. Elliott sold vegetables at market. There she met Elliott, a butcher, who was a widower with two young children, Henry and Susan. She married him and by him had one child, a son, named Edward. Before the paper in dispute was made the three children had grown up to manhood and womanhood, and the husband had died. The two boys made their residence at Williamstown, in.Gloucester county, and the daughter went to reside in Camden, leaving Mrs. Elliott alone at Haddonfield, about nine, miles from Camden. She saw but little of the two boys, except when one or the other of them wished to borrow money from her. Her own son, Edward, is the caveator below and the respondent here. He appears to have offended his mother, after his father’s death, by selling some farming implements and refusing to pay over" the proceeds of their sale to her, and by abusing her when she demanded payment of the proceeds of sale from him.' A justice of the peace, who had been employed by the mother to collect these moneys from the son, testifies that Mrs. Elliott cried when her son refused to pay and wrote abusively of her, and declared that she would punish him in her will. The evidence very clearly establishes that for a year or more before the disputed paper purports to have been made, and thereafter till the mother died, although the respondent lived only twenty miles away, he failed to visit his mother, and that his continued and marked neglect was a cause of distress, and, at times, of irritation to her, which moved her, upon occasions, to declare that he should not have any of her estate, and, upon other occasions, that he should not have any considerable portion of it. At the same time, while the proofs seem to indicate that this feeling of distress and irritation predominated, there were occasions when the maternal affection caused her to express feelings indicative of her relenting and giving her son the greater part of her estate.

The proofs do not show much of the life of the stepdaughter, Susan. They place her, at the date of the will, as a member of the family of her son-in-law, Philip W. Beale, a druggist and physician of Camden, and show that she was in the habit of visiting Mrs. Elliott weekly while the latter was well, and more frequently when she was .sick. They also show that the rela7 tions..between Mrs; Elliott and Susan were amicable, and; such as should properly have existed between mother and daughter., Mrs.. Elliott frequently visited at Dr. Beale’s as a welcome guest. The proof is that she repeatedly asked the doctor. to draw her will for her, and that from time to time¡he postponed it until the 10th of March, 1894, when, having previously secured a blank form in Philadelphia, he prepared the document in dispute.

The provision of the will is. as follows: $500 to the • son, Edward ; $200 to a neighbor, whose daughter appears to have frequently acted as amanuensis for Mrs. Elliott; $50 to John Arthur, a former employe; $50 to another neighbor, and the residue of the estate to the husband’s daughter, Susan Davis.

Precisely what the residuary estate is worth has not been disclosed, but the indications are that it constitutes the bulk of Mrs. Elliott’s property. I'gather that it is worth at least three or. four thousand dollars.

If the subscribing witnesses to the will are to be believed, the document was. drawn and executed in Dr. Beale’s office, in his house adjoining his drug store, on the morning of the 10th of March, 1894, between seven and ten o’clock. Those witnesses are Dr. Beale and Edgar H. Landes, a veterinary doctor, who that morning happened to. be in Dr. Beale’s drug store. The testimony of members of the family of Dr. Beale is, in effect, that on the 10th of March, shortly after seven o’clock in the morning, Mrs. Elliott arrived at Dr. Beale’s house; that the doctor was then yet in bed; that she said that she' had come to have her will drawn by the doctor; that she breakfasted there; that she, Dr. Beale and Dr. Landes were together in Dr. Beale’s private office for half an hour or more, and that when she came out of the office she declared that she had made her will. The subscribing witnesses say that she dictated the will, and that Dr. Beale wrote it in a blank form, and that after it had been read over to her, she duly executed it in the presence of the witnesses, making her mark, for she was unable to write her name.

It is not claimed that Mrs. Elliott lacked capacity to make a will, nor that the will was the product of undue influence, nor that in its execution there was failure to comply with the requirements of the statute. The position boldly taken is, that the instrument was not executed by Mrs. Elliott; that the mark is a forgery and that the testimony of the subscribing witnesses is false. This position imputes a double crime to Drs. Beale and Landes. There is a suggestion that Dr. Landes may have been deceived by some one personating Mrs. Elliott, but his own testimony is that he knew Mrs. Elliott, and was not thus deceived.

Let us see upon what evidence the position rests.

The case was opened by the examination of the subscribing witnesses. Dr. Beale testified that all the written portions of the will were made at the same sitting, in the presence of Mrs. Elliott and Dr, Landes, with the same ink, but, possibly, not with the same pen. Dr. Landes testified that Mrs. Elliott dictated the will, and that Dr. Beale wrote it all with the same ink and the same pen, and then read it to her, and that she made her mark to it in the presence of the subscribing witnesses, who then signed in her presence and in the presence of each other.

An inspection of the instrument shows that at the end, in stating the date, the words “tenth,” “March,” “ninety-four,” and thereunder, “ Mary Ann Elliott, her ^¡— mark,” are written with apparently darker ink than the writing in the body of the will, and so, under the attestation clause, the names of the subscribing witnesses appear to be in somewhat blacker ink than that used in the body of the will, yet not so black as the words quoted.

The mark appears to have been made with some care by lines intended to be at right angles with each other. The horizontal line apparently was intended to follow a lead-pencil line immediately above it, which, to the right of the vertical line, is yet apparent. I think that the person who made the mark attempted to follow the lead-pencil line, and that, commencing at the right, he or she moved along immediately under it for a quarter of an inch and then, inadvertently or because of defective eyesight, or inexpertness in the use of a pen, fell below it for a short distance, and then, discovering her error, returned to the point of divergence and from thence made a new line which ran upon the pencil mark. Thus, at its left, the horizontal line of the mark has two prongs of uneven length. The vertical line Avas evidently marked over partially, and perhaps wholly, more than once. It presents a patched appearance. Thus particular effort in making the .mark is demonstrated.

The caveator produced four gentlemen as experts in handwriting, all of whom expressed the opinion that the body of the Avill and the words at the end, Avhich have been quoted, were not written with the same ink. The last sworn of these gentlemen expresses also the opinion that the particular effort in making the mark was not the habit of Mrs. Elliott, as her habit is demonstrated by three or four other marks received in evidence as hers,'which he used for standards in comparison.

I do not acquiesce in the opinion of these gentlemen that different inks were used. I have very carefully examined the will with the aid of a poAverful magnifying glass. The heavy strokes in the name of Mrs. Elliott at the very outstart of the instrument appear to me to be quite the same black and ink that appears in the suspected words. Possibly the ink is not quite as thick, but that may easily be accounted for by a deeper dipping of the pen in the sediment that is almost invariably found in the bottom of an inkstand. The thickness of the.fine lines in the AA'ords written in the date indicates either a change of the pen or a dipping into sediment. But if I be mistaken in my opinion and another ink was used it does not by any means follow that the will is a forgery. It simply results that Drs, Beale and Landes are mistaken that the same ink was used throughout the completion of the instrument. The testimony shows that there were íavo inkstands and several pens on Dr. Beale’s table, and that it was possible that .two inks may have been used.

"When it is remembered that the subscribing witnesses testified fifteen months or more after the making of the will, during which many other important transactions may have intervened, they are not to be disbelieved in the important features of the will-making merely because they may be mistaken as to details which may not have impressed them as important at the time of the transaction. If the will were a forgery in which they must have been principals or accomplices, they would hardly, knowing that there were two inks on the table, have positively stated that one only was used. A guilty conscience would have constrained them to pretended forgetfulness or inattention to the trivial circumstances.

I do not think that any significance adverse to the will is to be drawn from the care exercised in making the mark. It is to .be remembered that the will was important to Mrs. Elliott — so important that she had traveled from Haddonfield very early in the morning to be sure and find Dr. Beale. She probably thought that she was obliged to follow the pencil lines in making the mark, and, with the infirmities of her age and lack of education, found it difficult to do so, and hence her efforts. It is only a remote possibility that a forger, familiar with the usually careless habit of Mrs. Elliott in making her mark, would have resorted to such efforts.

Upon the apparent conflict of the opinion of the experts with the statements of Drs. Beale and Landes, the interest of Dr. Beale and the insistence that the will is unnatural in the exclusion of the caveator from the greater portion of his mother’s •estate, the two associate judges of the orphans court, notwithstanding the dissent of the presiding or law judge, denied probate to the will.

Dr. Beale had some interest in the instrument which gave his wife’s mother the bulk of Mrs. Elliott’s estate, but precisely what that interest was, does not appear. It may be that his mother-in-law was not dependent upon him, and that his wife, .after years, could expect only a fraction of the property that her •mother might leave. But if we doubt his integrity because of this interest, there still remains Dr. Landes, appearing to the court as an entirely disinterested and reputable witness, who was casually called upon to be present when the will was made, and who, in performance of his duty as subscribing witness, saw the whole instrument prepared and executed as the law requires. His testimony cannot be lightly set aside. And, in addition, Charles Mayer, the clerk of Dr. Beale, testifies that before the will was made Mrs. Elliott had told him that she meant to have Dr. Beale write her will, and that when he did so she wished Mayer would be a witness to it; that when the time came Dr. Landes was in the drug store, and Dr. Beale came from his office to get Mayer, as Mayer supposed, and, seeing Dr. Landes, asked him to be the second witness, saying to Mayer that Dr. Landes was preferable because of his age and experience. It was thus that the interview between Mrs. Elliott and the two doctors was impressed upon Mayer’s mind. Moreover, it is shown by other entirely disinterested witnesses that, after the date of the will, Mrs. Elliott declared that she had made a will.

I do not find justification for the decree of the orphans court. The evidence relied upon by the respondent is, to my mind, insufficient to do more than to awaken suspicious scrutiny, which, I think, is quickly put at rest by the remaining evidence.

I will reverse the decree.