author: Magie, J.

text:
    Jacob Kalmus, appellant, v. Louis Ballin et al., respondents. Aleck Kantrowitch et al., appellants, v. Louis Ballin et al., respondents.
    1. Since an assignee for the benefit of creditors may attack previous fraudulent transfers of property made by his assignor, when such property is necessary to satisfy the demands of creditors, he owes a duty to certain creditors to make such an attack, and, upon failure to perform such duty, a creditor to whom it is due may file a bill in his own name to avoid such transfers.
    2. A creditor may thus supplant the assignee and assert his rights when the latter, by his connection with the fraud or otherwise, is disabled from asserting them, or when, upon proper notice, he has neglected or refused to perform his duty in that regard.
    3. A mere request to take proceedings to set aside transfers of the assignor’s property, will be insufficient. He must be informed of facts tending to show the transfers fraudulent and a reasonable ground for contest.

      4. If, upon request, the assignee declines to act on the ground that there are no funds to make the contest, it should appear, to justify a creditor' in supplanting the assignee in the litigation, that his excuse was false or that creditors had offered to supply the necessary funds or indemnify against loss.
    5. The creditor who may demand performance of the assignee’s duty and upon his default may act, is one who has presented his claim against the assignor, to the assignee, in the manner provided by the statute.
    6. The orders appealed from were made upon affidavits. — Meld, that the affidavits did not sufficiently establish the material allegations of fraud contained in the bill, to justify the appointment of a receiver and the peremptory sale of the disputed property.
    On appeals from orders of the court of chancery in Ballin et al. v. Morris et al.

      Mr. Boderick B. Seymour and Mr. Gilbert Collins, for the .appellants.

      Mr. William B. Douglass, for the respondents.
   The opinion of the court was delivered by

Magie, J.

The bill in this cause was filed by Louis Ballin and others, partners, in behalf of themselves and other creditors of Hannah Morris. It was founded on an attachment sued out by them in the Hudson county circuit against her property. It averred, among other things, that Hannah Morris had, previous to the attachment, made a bill of sale of a stock of goods in her store to Jacob Kalmus, and that he had made three chattel mortgages on the goods — one to Aleck Kantrowitch, one to Leopold J. Liberman, and one to Charles Elauk. It charged that the bill of sale and mortgages were made without consideration and for the purpose of defrauding the creditors of Hannah Morris. The prayer was that they should be set aside and the property be subjected to the lien of the attachment or sold for the benefit of creditors.

The bill further showed that Hannah Morris had subsequently made an assignment, for the benefit of creditors, to one Lowy, but he was not made a party. Kalmus and the three mortgagees were made defendants.

Upon the bill with affidavits annexed being filed, an order to show cause was made, returnable December 27th, 1892, and a restraining order.

On December 27th, 1892, another order was made permitting respondents to amend their bill by striking out all the charges respecting the attachment (which had then been dissolved), and by adding a more particular statement of the assignment for the benefit of creditors; an averment' that the assignee had been requested to take proceedings to set aside the bill of sale and mortgages and that he had refused, and an additional prayer for a declaratory decree that the title of the goods passed under the assignment to the assignee. It further permitted respondents to make the assignee a party defendant, and continued the order to show cause to January 3d, 1893. It also appointed a receiver ftf the goods, and directed him to dispose of them in the usual course of business at retail.

The order to show cause was brought to hearing on January 3d, 1893, upon the bill and the annexed affidavits and counter-affidavits and exhibits. The order was made absolute and the receiver continued.

On January 12th, 1893, upon a report of the receiver that the business was unprofitable and no insurance could be obtained upon the stock of goods, an order was made directing him to sell the stock as a whole.

Kalmus has appealed from the orders of December 27th, 1892, and of January 3d and January 12th, 1893.

Kantrowitch and the other mortgagees have appealed from the two last-mentioned orders.

All the appeals were argued together.

It is first contended that if it be assumed that respondents had a status to question the transactions which the bill sought to avoid, the allegations material to the relief prayed for were not so established by the affidavits as to justify the orders seizing the disputed property and disposing of it by the receiver.

The propriety of these orders must be determined upon a consideration of the affidavits then before the court below.

A review in detail of the affidavits will serve no useful purpose, and it will be sufficient to indicate the conclusions reached.

In respect to the bill of sale, the charge is that it was without consideration and designed to defraud creditors. As to its consideration, unless the counter-affidavits are rejected as unworthy of credit, for which I can find no reason, it clearly appeared that the transfer to Kalmus was for a consideration of $6,000, which was no less effective because-it was partly paid by a release of Hannah Morris from a debt due to him for borrowed money, and by. the assumption of the payment of her note which he had endorsed for. her accommodation, and which was then held by a bank which had discounted it, and partly by his undertaking to assume debts which she owed to Kantrowitch, Liberman and Flauk for borrowed money, and to pay her note, which Kantrowitch had endorsed for her accommodation, and which was also held by a bank which had discounted it. Nor do the affidavits show any such inadequacy of consideration as to justify an inference of fraud. Nor can there be discovered therefrom any ground for holding that the transfer was made to hinder, delay or defraud creditors within the prohibition of our statute. If the affidavits justify an inference that Hannah Morris made the transfer with that intent, it will not be sufficient to sustain this allegation of the bill. It must also appear that Kalmus participated in the fraudulent intent or knew at the time of facts and circumstances from which such intent was a natural and legal inference. Tantum v. Green, 6 C. E. Gr. 364. It is true that the effect of the transfer is to prefer creditors, but, in the absence of the restrictions of'bankrupt or insolvent laws, debtors may prefer creditors and the latter may accept preferences without fraud.

In respect to Kalmus, the orders of January 3d and 12th were made without-sufficient proof and should be reversed.

As to the chattel mortgages, appellants’ case is still stronger. The affidavits annexed to the bill showed no fact from which any inference that they were without consideration or made to defraud creditors could be drawn. The counter-affidavits establish that they were given by Kalmus to secure his notes made in pursuance of his agreement with Hannah Morris and substituted for her obligations held by the mortgagees. The consideration of the mortgages was thus established, and there was nothing to justify even a suspicion that the mortgagees conspired to defraud the other creditors of their debtor.

Upon their appeal there should be a reversal of the same-orders.

It is next contended that respondents had no status to maintain this action and file the amended bill. This contention is applicable to the orders already considered, but particularly to-the order of December 27th, which permitted the amendment.

By such amendment, the whole scope and purpose of the bill' was altered. From a bill to enforce the lien of an attachment,, interfered with by alleged fraudulent transfers, it became a bill by particular creditors to establish the rights of an assignee for the benefit of creditors upon such property as against such-transfers.

It was conceded in argument that the duty to attack fraudulent transfers of the assignor’s property primarily devolves-on the assignee. In general, he cannot be supplanted in the-performance of that duty unless it is one which, from the circumstances, he cannot properly perform or which he will not perform. If there are no circumstances showing .disability or intention not to discharge his duty, the proper course is for a creditor to whom he owes the duty to give him notice to perform it. Then, if he refuses or neglects to do so, the creditor may become an actor in a suit for the relief he thinks should be afforded. Legendre v. Goodridge, 1 Dick. Ch. Rep. 419; Davis v. White, 3 Dick. Ch. Rep. 22; S. C., 4 Dick. Ch Rep. 567.

There was nothing in the bill or affidavits to indicate that Lowy, the assignee, was disabled from attacking the transactions-which the bill seeks to avoid. All that was before the court to-indicate his refusal or neglect to perform a duty in that regard' is contained in an affidavit of the solicitor. He testifies that, on a day not specified, he applied to the assignee to take proceedings to have the bill of sale and. mortgages set aside as fraudulent and that the assignee refused to comply with his request, alleging as’an excuse, lack of funds to make such a contest.

This affidavit does not establish neglect or refusal on the part of the assignee. In the first place, it does not appear that he knew or was informed of any facts tending to show that the bill of sale and mortgages were fraudulent or that there was reasonable ground for a contest respecting them. It cannot be said that he neglected a duty of which he is not shown to have been aware. In the next place, the assignee was not bound to enter on such a contest at his own expense. He based his refusal on that ground, and such refusal was not wrongful unless it is made to appear that his excuse was false or that the creditor who applied to him offered in good faith to supply the necessary funds or to indemnify him against loss.

It is further contended that an application to an assignee in a case of this sort can only be made by creditors to whom he bears a relation which imposes upon him a duty in respect to them, and that respondents are not such creditors.

This contention is applicable to all the orders, for it involves the right of respondents to intervene in case of his refusing their request and to maintain such a bill.

The bill does not show that respondents had obtained judgment against Hannah Morris upon their claims or that they had presented their claims to the assignee under oath or affirmation, as required by section 3 of the Assignment act. Rev. p. 37. It was conceded in argument that, when amended, the bill was one filed by general creditors, whose claims had not been ascertained and fixed by judgment and had not been presented to the assignee, so as to entitle the claimants to share in the assets of the debtor when distributed by the assignee, and it is in the capacity of general creditors that respondents claim the right to compel the assignee to attack the alleged fraudulent transfers, and, upon his refusal, to attack them themselves.

The general rule settled in this state is that creditors only acquire a status to challenge a fraudulent transfer of property by their debtor by having first obtained a judgment or other lien which, but for the transfer, would affect the property. Debts which are made liens by statute confer such status upon the creditor. Haston v. Castner, 4 Stew. Eq. 697; Graham Button Co. v. Spielman, 6 Dick. Ch. Rep. 120; S. C., 5 Dick. Ch. Rep. 796. Respondents do not fall within this rule, and their right to maintain this action arises, if it exists at all, from the fact that their debtor has made the assignment for the benefit of •creditors.

The right of an assignee for the benefit of creditors to attack •a previous fraudulent transfer of property by his assignor was first discussed in this state in the supreme court, and although the question was not necessarily presented, Mr. Justice Potts •indicated his opinion to be that such an assignee could attack such fraudulent transfers, and because he was trustee for. creditors ¡they could compel him to do so. Garretson v. Brown, 2 Dutch. 425.

The question arose afterward in the court of chancery, and Chancellor Zabrislde held that an assignee could not attack the fraudulent transfers of his assignor, on the.ground that the latter could not impeach the fraudulent transactions in which he took part and was incapable of giving authority to another to do so. Van Keuren v. McLaughlin, 6 C. E. Gr. 163. This case was folilowed by Vice-Chancellor Van Fleet in Pillsbury v. Kingon, 4 Stew. Eq. 619.

The last-named case was brought to this court by appeal. The case was one of a conveyance of lands by a debtor in fraud of creditors — an assignment for the benefit of creditors, under which creditors had presented their claims, and the property in the hands of the assignee was insufficient to pay such claims in full. The bill was filed by the assignee for the purpose of setting aside the fraudulent conveyance. The right of the assignee to attack the fraudulent transfer of property by his assignor was thus in question, and it was settled that he had such right. 'This was put on the ground that although the assignee was the •grantee of one of the fraud-doers, yet he was to be. regarded as the representative of creditors so far as to enable him to institute proceedings to set aside such a conveyance when the property affected thereby is needed to satisfy creditors. The assignment was declared to create, ipso facto, a trust for the benefit of creditors. But it was also held that the fraudulent transaction would only be set aside so far as was necessary to satisfy the demands of creditors. Pillsbury v. Kingon, 6 Stew. Eq. 287.

Upon the doctrine thus settled, Lowy, the assignee in the case before us, became a trustee for the benefit of creditors and entitled to attack fraudulent transfers of property in the interest of creditors and to the extent necessary to satisfy their claims. But obviously he owed a duty in this regard only to the creditors with whom the trust relation was established. He is, no doubt, trustee for all creditors who may, within the prescribed time and in the required mode, present their claims, which thus become, prima facie, ascertained and fixed. But until a creditor presents his claim he is a stranger to the assignee and cannot impose on him the burden of a trust in his favor. When a creditor presents his claim, the trust relation with the assignee comes into existence. Tim assignee owes to such a creditor a duty to attack, on proper request, fraudulent transfers of property necessary to satisfy such claims. Upon the neglect or refusal of the assignee to comply with such a request, such a creditor acquires a status to act in the assignee’s stead.

This conclusion is not, as argued, in conflict with previous decisions. In Hays v. Doane, 3 Stock. 84, the bill was filed by a judgment creditor to set aside a fraudulent assignment for the benefit of creditors and fraudulént transactions by the assignees: The creditor had not presented his claim to the assignees. The relief finally granted was confined to property which the assignees had improperly transferred, and the complainant’s right to such relief was sustained, not as a general creditor, but as a creditor who had ascertained and fixed his debt by a judgment which would éntitle him to any surplus after creditors who had presented their claims were satisfied.

In Davis v. White, 4 Dick. Ch. Rep. 567, the bill was also filed by a judgment creditor, and its purpose was to set aside various transfers of property and also an assignment for the benefit of creditors made by the debtor in fraud of creditors. The defendants demurred to the bill and thereby admitted the fraudulent character of the transactions. This court, in affirming the decree overruling the demurrer, approved the course which 'Vice-Chancellor "Van Fleet had indicated as proper to be taken, which was, not to set aside the assignment, though admitted to be fraudulent as to the complainant, but this approval was expressly put on the ground that the assignment ought' to be preserved for the purpose of administering the equities of all the creditors.

The result is that respondents were not in a relation of trust with the assignee and not entitled to require him to attack the transactions set out in the bill. Respondents had, therefore, no status to attack the transactions.

All the orders must, therefore, be reversed.

For reversal — Depue, Dixon, Garrison, Reed, Van Syckel, Bogert, Krueger, Phelps — 8.

For affirmance — Abbett, Lippincott — 2.


source: Caselaw Access Project

author: Garrison, J.

license: Public Domain

text:
    William F. Fisher et al., appellants, v. William L. Bull et al., respondents.
    1. It is well-settled law that an assignee of a non-negotiable or matured debt-takes it subject to all the equitable defences that the original debtor may have.
    2. One who is about to become the assignee of such a debt must at his peril find out from the debtor whether there are any equitable sets-offs or defences.
    S. William L. Bull held in trust for I-Iarry F. Worthington a certain mortgage made by Fisher & Furman. Fisher & Furman became sureties for said Harry F. Worthington on an .attachment bond and took as indemnity an assignment of his interest in said mortgage, and by force of proceedings in said attachment suit were forced to pay the judgment rendered therein against said Harry F. Worthington. Subsequently William Jj. Bull and others (executors of Henry B. Worthington) purchased of Harry F. Worthington his interest in said mortgage and took from him an assignment of all his interest therein. Upon a foreclosure of said mortgage by Bull, trustee, for the benefit of the last-mentioned assignees — -Held, that Fisher & Furman, the mortgagors, were entitled in equity to set off the amount paid by them for said Harry F. Worthington under their prior assignment.
    On appeal from a decree advised by "Vice-Chancellor Bird in Bull, Trustee, v. Fisher et al., whose opinion is as follows:
    The bill in this case is filed to foreclose a mortgage. The defendants Fisher & Furman say that they are entitled to be first paid out of the proceeds of the sale of the mortgaged premises the amount of a certain judgment in attachment against- Harry F. Worthington, on whose bond, in such attachment, they became surety, and, as an indemnity for so doing, took an assignment of his interest in this bond and mortgage. They insist that the complainant, through his counsel, Mr. Jenner, had notice of their interest in this mortgage. They have endeavored to show that his counsel, Mr. Jenner, had this notice, from the fact that he had a general knowledge of all the transactions which lead up to the execution of the assignment, and also of the difficulties which prevented the sale of the lands so mortgaged until this assignment was agreed upon. Enough of the transactions and the difficulties may be given in a few words.
    Henry R. Worthington died leaving a last will and naming his executors. Before his death he had made some agreement respecting the sale of the land covered by this mortgage. After his death the Worthington Brick Company brought suit against his executors to compel specific performance of the alleged contract of the testator. Pending this suit Fisher & Furman made-an offer for the land in controversy, which was considered by the owners, and a sale was at length effected, with the understanding that the fund should represent the land in the litigation. Difficulties were encountered in completing the sale. An important one was the existence of an attachment against the-interest of Harry F. Worthington, a son of the testator. Harry having, or claiming to have, an interest in the land, this attachment was a bar to a perfect title. Fisher was to give a mortgage on his half of the land in case of a sale, and, in order to remove the attachment, Harry agreed to assign all of his interest in the said mortgage to Fisher & Furman, the purchasers of the title, in case they would become his sureties on a bond in the said attachment. And the matter was closed up in this way. The attachment was determined against Harry. Fisher & Fur-man paid the judgment and costs, and these they now claim are . a first lien on the proceeds of the sale in this case if a sale be ordered, and they make this claim because they say that the complainant had the notice above intimated. And this is the .important question in the case.
    This claim of notice is set up by the defendants in their cross-bill, and the burden of proving it is on them. It must be made to appear that Jenner knew of the assignment as a fact, or of such other facts as would prompt a prudent man to inquire, and if he did, would have discovered the fact. It is not enough to assert simply that he was in a position where he might have known or learned of them. It will doubtless be agreed that the court cannot base a decree upon what might have been. The question is not what might have been, but what actually was heard or seen. Did Jenner, as the counsel of the complainant, see this assignment and know what interest it was intended to assign, either from reading - it or from any other source, or did he have such facts communicated to him as would prompt a prudent man to investigate ?
    These observations have been induced by the very strong argument of counsel, that because the attachment matter was so seriously in the way of the sale, and was so much the subject of conversation by those who were interested in effecting the sale, .and because Jenner was the counsel of the complainant, and through him all the negotiations were carried on, and because he was in the office of Bryan, the counsel of the other 'Worthingtons who had an interest, in whose office the change of the title •was effected, for more than two hours at the time of such change of title, during which time the assignment was lying on Bryan’s table, he must certainly have learned of the assignment.
    And this leads me to observe that if the fact had in any direct manner been communicated to Jenner, there would have been preserved the most satisfactory proof of it. This arises from the exceeding great care exercised by both Jenner and Bryan in making memoranda of all the transactions respecting this matter with which either of them had anything to do, even to the smallest details, which have been preserved and produced in great fullness in court and offered as evidence. • And yet there is nothing from which I can infer in the remotest degree that anyone informed Jenner that the mortgage which Eisher was to-give, and in which Harry had an interest, was to be assigned by Harry to Fisher & Furman as an indemnity.
    Again, when I consider the exceeding great care evinced by Jenner in this matter, in guarding the interests of the estate of the testator, not only as to the perfect arrangement of all of the details, but also as to the preservation of the just equality of the different interests, and that all of these were from day to day noted and communicated to his client, it seems to me quite incredible that a matter, which in the event of the suit of the brick company being determined against the estate would be likely to prove so serious, involving the whole $35,000, should have been entirely forgotten.
    But, in looking at the statement of the witnesses and taking it for granted that the difficulty of removing the attachment was one of the chief, and it may be the very last, in the way of completing the transfer, we can discover just what approach there was towards showing that Jenner had knowledge. Mr. Bryan speaks of a moral conviction that he had informed Jenner of the assignment, but in his testimony he does not venture beyond this, of which more hereafter. In the following questions this point was held up before Mr. Adrain, who was the counsel of the attaching creditor and who had had interviews with counsel and parties (excepting Mr. Bull) respecting the attachment, namely:

      “Q. Can you say from your distinct recollection that Mr. Jenner knew of this assignment of Harry F. Worthington’s interest in that mortgage to Fisher & Furman as collateral security?

      “A. It would be impossible for me to say exactly what I told Jenner, but my recollection is that I assured the parties who were representing the vendors that it was absolutely necessary that that attachment should be ráised; and I have a moral certainty that Mr. Jenner was present and informed of that fact, but as to what time I conveyed it to him I can’t say, but I know that they were all there during the day on which the transfer was made, running in and out, for the purpose of bringing the links together.”
    And again:

      “ Q. Mr. Jenner was fully aware that the title could not pass until the attachment was removed ?

      “A. As fully as I have suggested.

      “Q. Was he aware that in accomplishing that, Harry F, Worthington had made an assignment of his interest in that property to Fisher & Furman, who were to be his bondsmen in removing the attachment? ■

      ‘A. My impression, is that he was; I was distinct and open in my declaration that that must be raised ; my impression is that that matter was openly discussed, not only in reference to lifting the attachment, but the character of .the searches and the fact of the assignment.”
    And there is no stronger or more certain evidence that Mr. Jenner was informed of this assignment than that given by Fisher himself. He swears that he spoke to Jenner several times, pending the negotiations, about the assignment of the mortgage to Fisher & Furman as an indemnity. If I understand Mr. Fisher’s testimony correctly, these interviews with Jenner must have been a considerable period of time before Fisher’s own counsel or Mr. Bryan had even considered or thought of making such assignment in order to get rid of the attachment. Indeed, the giving of this mortgage was not talked of until the 26th of March, 1883, but upon that day, for the first, Mr. Bryan expressed the thought that the object in view, to wit, ■completing the sale, might be consummated, for on that day Mr. Bryan says he received a letter from Mr. Jenner, in which he wrote: “ I have just heard from my client; he supports me in declining to take back the mortgage on an undivided half.” He .adds:

      “ But before I got that letter, my son went and delivered my letter that I wrote on March 26th; my son reported that he read it and said, ‘ I have written an answer and said that we won’t do it; ’ my son further reported that he asked him whether he would consent to a mortgage on an undivided half if we would agree to take it on account of our share, and he said he would ; my son further reported that Mr. Jenner said that he wished that put in the stipulation; my son had my authority to say this, and he further reported that Mr. Jenner said, ‘It will not be necessary to see Mr. Bryan; we will do it.’”
    Thus, while it appears that, in order to oblige Mr. Eisher, who wanted to be accommodated by giving a mortgage, an effort was made to induce Mr.' Jenner to accept such mortgage ■ on Fisher’s undivided one-half, but which Jenner had not accepted, and which, on this 26th day of March, he positively refused to .accept. It was not until that day suggested that the mortgage might so be taken provided Mr. Bryan would stipulate that it should be taken on behalf of his clients. This being so, it does not seem at all reasonable that, prior to that date, there should have been any talk between any of the parties interested respecting the assignment of the mortgage by the said Harry. But Mr. Jenner consenting, the whole matter was speedily arranged; and as soon as Mr. Bryan could get his clients and Mr. Adrain in his office, which I think was upon the 28th of March, it was agreed that Fisher & Furman should become sureties on the bond in attachment, and that this mortgage, which Jenner had consented to, provided it should be taken on the account of Mr. Bryan’s clients, should be assigned to Fisher & Furman as an indemnity. On the 30th of March such assignment was prepared and executed, although dated upon the 28th. On the '26th Mr. Bryan entered in his memorandum-book the following:
    “ I hope to be able to get Messrs. Fisher & Furman to go security on the H. F. W.’s bond to lift the attachment; to do this I may be obliged to give them some claim on our interest in the mortgage.”
    He does not say what the nature of that claim shall be.
    It seems to me, therefore, very reasonable to infer that this method of relieving the land from the attachment was not considered until the 26th day of March, and that the exact mode by which Fisher & Furman were to be secured u-pon the interest of said Harry was not on that day determined upon.
    With these facts before the mind, it seems to be conclusive that Mr. Fisher was mistaken in saying that he had several times informed Mr. Jenner that he and Furman were to become sureties for Harry in the attachment, and Harry was to assign his interest in the bond and mortgage as an indemnity.
    I think, in this connection, it deserves attention that as soon as Mr. Jenner heard of this assignment and of the claim that was made under it, he denied having any previous knowledge of it, which evidence only became admissible by being introduced by the defendants in this manner — that is, when Mr. Bryan was being examined on this point he said that he was morally certain that Mr. Jenner knew of the assignment before the settlement which took place on the 2d of April, 1883, but was not prepared to swear that he did so know, for he understood that Mr. Jenner denied any such knowledge; and when this denial was communicated to Mr. Bryan (this was in May, 1885), he wrote to Mr. Jenner not to be too hasty in his contradictions until he saw him; and although Mr. Jenner asked Mr. Bryan for any facts which he had referring to this knowledge, Mr. Bryan had none to give'; but notwithstanding these things, it is urged that Mr. Jenner had notice of .this assignment April 2d, 1883, when the parties met in the office of Mr. Bryan to pass the title and pay the consideration money or to secure its payment, at which time Mr. Jenner was present. As I have stated, Mr. Jenner positively denies all knowledge of this assignment prior to May 13th, 1885. He admits that he was present in Mr. Bryan’s office when the sale was completed, during most of the time between the hours of two and four, during which time the principal part of the work in perfecting the papers, and in delivering them, and in making all the calculations, and in drawing and passing the checks, was done. It is conceded by the defendants that during this time Mr. Jenner spent the most of his time, if not about all of it, upon a sofa some distance from the table where the work was done. It is conceded also that during this time the assignment was upon Mr. Bryan’s table, but there is no-satisfactory proof that Mr. Jenner so much as saw the paper,, saying nothing about his having any knowledge of its contents. To adjudge that because a person who may have an interest in-a certain transaction, expressed or represented in some document,, happens to be in a room where that document is and nothing else appears to have passed to have brought it to his attention, had knowledge of such instrument, would itself be adjudged to-be quite unreasonable.
    I think, therefore, that the effort to charge the complainant with notice has not been satisfactorily sustained. Although I did not think that counsel for Fisher & Furman seriously pressed the allegation that the complainant had notice through, the registry of the assignment, perhaps I ought not to let that point pass unobserved. The assignment was not recorded until after the. complainant’s interests were fixed, and it is clear enough, that in such case, the record does not amount to notice. Hoy v. Bramhall, 4 C. E. Gr. 563, 572.

    It being established that the complainant did not have notice^, he holding the mortgage as he did, in trust, and the cestui que trust, independent, of the assignment, being competent to join therein, had a right to settle with the trustee, and did so in May, 1885, it therefore seems impossible to charge the complainant now upon the ground of notice. The complainant, I think, is entitled to the whole amount due on said mortgage, and I will advise a reference in order to ascertain that amount.

      Mr. Abraham V. Schenck, for the appellants.

      Mr. John Lmn, for the respondents.
   The opinion of the court was delivered by

Garrison, J.

The bill in this case is to foreclose a mortgage. In form the suit is between William L. Bull, trustee, the holder of the legal title to the mortgage, and Fisher & Furman, owners as tenants, in common of the legal title to the mortgaged premises. The real contest, however, is between Bull and others (executors under the will of Henry R. Worthington, deceased), who claim, as equitable assignees of Harry F. Worthington, the eestm que trust of the mortgage, and the defendants Fisher & Furman, the mortgagors, who claim a right in equity to set off the amount paid by them for said Harry F. Worthington under a prior assignment to them of his interest in said mortgage debt. The transaction that gave rise to that situation was this: In 1880 Henry R. Worthington and Harry F. Worthington, his son, were owners as tenants in common of certain premises known as the Worthington brick property. On March 3d, 1880, Harry F. Worthington conveyed to the Worthington Brick Company, a corporation under the laws of New York, his equal undivided one-half part of the premises in question. Henry R. Worthington, the father, died in December, 1880, without having conveyed his undivided half. By his- last will he appointed as the executors thereof his widow, Sara H. Worthington; his two sons, Charles C. Worthington and said Harry F. Worthington, and his son-in-law, William L. Bull, who proved the will and took upon themselves the administration of said estate, with power to convey lands. On August 5th, 1881, an action was begun in the supreme court of the State of New York by the Worthington Brick Company, as plaintiff, against the said executors, for the specific performance of an agreement to convey the undivided one-half part of said lands, made by said Henry R. Worthington in his lifetime. While this action was pending a proposition was made for the purchase of the Worthington brick property by William F. Fisher and Hoah Furman, which was accepted, and, in order to insure a good and sufficient title thereto, all of the parties in interest joined in a series of conveyances and stipulations by which the legal title to said- property passed to Fisher & Furman in consideration of certain payments of cash and a purchase-money mortgage of $9,000, executed by said Fisher on his undivided one-half of said property. This is the mortgage now sought to be foreclosed. The mortgage was accordingly made to William L. Bull as trustee, for whom it might concern among the parties to the action then pending in the court of New York; and it was further stipulated that the said bond and mortgage should be considered in any final division or distribution of the proceeds of said sale as belonging to and distributable in the undivided half formerly belonging to the said Harry E. Worthington in the said lands and premises. In 1884 Fisher paid on the principal of said mortgage the sum of $6,000, and in 1885 conveyed to Noah Furman his one-half interest in the said premises. In 1887 William L. Bull, trustee, filed his bill against said Fisher & Furman to foreclose said mortgage, which proceeding has since been amended by joining as parties thereto the legal representatives of Henry R. Worthington, deceased. In his replication in this suit, William L. Bull, the complainant, states that the said executors of Henry R. Worthington (of whom he was one) had made a settlement with Harry F. Worthington with respect to his interest in said mortgage and had taken from him an absolute assignment of all his (said Harry F. Worthington’s) interest in the same, as such cestui que trust to the estate of said Henry R. Worthington, deceased. In his said replication the complainant further states that, as trustee under said stipulations, he assented to the said assignment and that he still holds said mortgage for the benefit of the said executors under this assignment, and in their interest filed the bill of complaint to foreclose the same.

Turning now to the claim of the defendants Fisher & Fur-man, the ease shows that they have an equitable defence to the said mortgage, resting upon a certain payment by them for and on behalf of said Harry F. Worthington, under an assignment to them of his interest in said mortgage, prior in point of time to the assignment by which the executors of Henry R. Worthington, deceased, claim title. The transaction with the defendants was in this wise: After Harry F. Worthington had conveyed his undivided interest in the brick property to the Worthington Brick Company, one James Sweeney, on the 5th day of October, 1881, sued out a writ of foreign attachment in this state against said Harry F. Worthington, under which the interest of said Harry F. Worthington in all of said lands was seized and .attached. After the death of Henry R. Worthington and after the commencement of the suit for specific performance in New York, and in order to effectuate the conveyance above mentioned to Fisher & Furman, and to free the premises from all encumbrances, the said Fisher & Furman became sureties for the said Harry F. Worthington to the said Sweeney, the plaintiff in attachment, whereupon the premises were released from the lien thereof. The said Harry F. Worthington, in order to indemnify said Fisher & Furman, assigned and transferred t'o them, as collateral security, his interest in the said bond and mortgage held by William L. Bull, trustee as aforesaid, which act of assignment was, by the deed of said Harry F. Worthington, dated and delivered March 30th, 1883, the same day upon which the said mortgage to Bull, trustee, was acknowledged and delivered. Subsequently, the said attachment was prosecuted to a verdict against said Harry F. Worthington and an action brought against the said Fisher & Furman on their said bond,- as sureties, whereby they were compelled to pay, and did pay, for said Harry F. Worthington, on the 22d day of January, 1886, the amount of said verdict, to wit, $2,402.35, together with the costs and interest thereon, for which sum they now claim a deduction from the balance remaining due upon the said mortgage.

From this recital it is evident that the real complainant in equity is not William L. Bull, the trustee of said mortgage, but William L. Bull and others, executors of Henry R. Worthington, deceased, whose claim rests not upon or through the legal title of William L. Bull, trustee, but solely upon their settlement with Harry F. Worthington and his consequent assignment to them of his interest as the cestui que trust of said mortgage. The defendants Fisher & Furman may in equity be regarded indifferently as prior assignees of the interest of Harry F. Worthington, or as mortgagors who have discharged part of their debt. In the court of chancery the case was tried upon the theory that William L. Bull, trustee, must recover upon the strength of his legal title unless he had notice of the assignment by his cestui que trust to Fisher & Furman. Upon this point a large mass of testimony was taken, which, however, failed to satisfy the learned vice-chancellor that notice had been given, who thereupon has advised a decree in favor of the complainant for the entire balance due on said mortgage.

It would seem clear that in this disposition of the case the real parties in interest are lost sight of, as likewise is the true nature of their dispute. The'essential facts to be dealt with were these: First. That Harry F. Worthington, who was in equity the owner of the debt due from Fisher & Furman, received from them a certain part thereof for which he assigned to them his interest in their own debt. Second. That Harry F. Worthington afterwards assigned all of his interest in said debt to the executors of his father’s estate.

From this brief summary of the case it is evident that under a mass of detail the real transaction was simply the purchase by the complainants of a debt that had been partly paid, by the debtor to their assignor. That an assignee of a bond and mortgage or any other non-negotiable or matured debt takes it subject to all the equitable defences that the original debtor may have, is a settled rule in this state as well as elsewhere. Magie v. Reynolds, 6 Dick. Ch. Rep. 113, and cases there cited. Whether Bull, trustee, had notice of the first assignment, is not a question that concerns us, for the reason that no party in interest claims through the legal title of which he was trustee, the real parties having dealt, over his head, directly with the owner of the debt in equity. That there might have been such action by Bull, trustee, in the execution of his trust as would have postponed a prior assignee to the taker of the legal title without notice to the trustee, may be conceded -without affecting at all the decision of the case in hand. At bottom the doctrine of notice is part of the law of negligence. It is undoubtedly true, as a general rule, that an assignee of a fund is negligent if he fail to give notice to the depositary, who otherwise may innocently pay it out to a subsequent assignee. That is not the case here, where the first assignee is not only the debtor, but is also, so to speak, the depositary of the fund itself. The case discloses no negligence of which the second assignees can complain. They were buying a debt, and it was clearly their duty to find out from the debtor whether he had any set-off. Having neglected to do this they must be postponed to the just claim that he now presents.

The case will be remitted to the court of chancery, in order that an account may be taken and a decree entered in accordance with these views.

For reversal — The Chief-Justice, Abbett, Depue, Dixon,. Garrison, Lippincott, Reed, Van Syokel,. Bogert, Brown, Krueger, Smith — 12.

For affirmance — None.


author: Abbett, J.

text:
    Dwight P. Cruikshank et al., trustees &c., appellants, v. Charles W. Parker, respondent.
    The will of Rufus Story conveyed all the rest and residue of his estate to his executors, in trust, to sell, dispose of and convey the same, with a further trust to divide the estate -into four shares for each of his daughters. The trustees were directed to convey to each of three daughters one share absolutely and the other was to be held and invested and kept invested by them during the life of his fourth daughter, who was to be paid the income arising therefrom, and on her death to be conveyed to her issue. — Held that, under the terms of his will, the power to sell continued after the division of the estate into the four shares, and that a bill would lie to enforce specific performance of an agreement between the trustees and a purchaser of a lot which was a part of the land of the testator, thus set apart for the fourth daughter for her life.
    On appeal from an order of the chancellor, whose opinion is reported in Cruikshank et al. v. Parker, 6 Dick. Ch. Rep. 21.

      Mr. Isaac S. Taylor, for the appellants.

      Mr. Gilbert Collins, for the Parets.

      Mr. De Witt Van Buskirh and Mr. Charles W. Parker, for the respondent.
   The opinion of the court was delivered by

Abbett, J.

The questions in this case arise upon a bill praying for specific performance of a contract for sale of land and a demurrer thereto, which demurrer was sustained by the chancellor. Before the determination of this cause, upon suggestion of the court and the parties to the suit consenting thereto, the four daughters of Mr. Story and the husband and children of Mrs. Paret were brought in as additional parties, and under consents and by orders of the court, so that all the parties in interest under the will should be bound by the decision in this case.

Rufus Story died October 5th, 1887, seized of the land in question, with other property. He left a will, with two codicils annexed thereto, copies of which are annexed to the bill of complaint.

He left him surviving, his widow, Ursula Story, who died October 16th, 1891, and four children, his devisees and heirs-at-law, to wit, Mary E. Palmer, Alice Rowland, Emily L. Paret, wife of John Paret, and Abby A. Marshall, wife of Charles C. Marshall. The will, which is dated January 3d, 1884, and the two codicils thereto, dated respectively July 30th, 1886, and April 25th, 1887, were admitted to probate December 14th, 1887, and letters testamentary issued thereon to his executors named therein, except Elias J. Herrick, who refused to act. The executors were also made trustees under the will, as therein set forth.

A partition or division of a large part of the lands of Rufus Story was made and has been confirmed by a decree of the court of- chancery, dated November 30th, 1891. The views of the chancellor as to this division and the rights of the said executors and trustees are stated in Story v. Palmer, 1 Dick. Ch. Rep. 1. The bill was dismissed in that case October Term, 1889, as premature, but, November 30th, 1891, upon another bill, the partition of a portion of the real estate of which Rufus Story died seized, and including the premises in question, was made, the court confirming said partition. Thereafter the said trustees sold two lots (a part of the share set apart for Mrs. Paret) to Charles W. Parker, by agreement dated May 25th, 1892. He refused to take the lots on the ground that the trustees had no power to sell the same.

Complainant’s bill was demurred to on the following grounds:

First. Because the bill does not state a case that entitled the complainants to any relief as against the defendant, as to any matters contained therein.

Second. Because, by the allegations of said bill, it appears that the complainants have no power or authority, under the will of JEtufus Story or the codicils annexed thereto, to make sale and conveyance of the lands described in the said contract of sale.

The demurrer was sustained upon the ground that the complainants had no power to sell any real estate set apart by said partition as the share of Emily L. Paret, and that if this conclusion is not correct, that the question is so serious that the case is one in which specific performance should not be decreed.

The will, after making certain specific bequests and devises, -devises and bequeaths the entire residue of the estate, real and persona], to the executors, the survivors and survivor of them, •or to such of them as may qualify, and the survivors and survivor of them, in trust, to and for the uses and purposes therein .stated.

Among the trusts affecting this residuary estate, as set forth in the will and codicils, are—

First. That they, the trustees, sell, dispose of and convey the same at public or private sale at such times and on such terms ■as they, in their, his or her discretion, may think proper.

'Second. That they divide such real and personal estate or the proceeds thereof into four equal parts or shares, one of such shares for each of testator’s daughters (naming them). They are directed to convey, pay and assign the shares of his three daughters (excluding Mrs. Paret) to them absolutely. They are directed to deduct from Mrs. Paret’s share the sum of $49,539.28, which amount is to be equally divided among his other three daughters, and the survivors and survivor of them, and the issue of any of them who may have died, such issue to take by representation. The remainder of the share of Mrs. Paret, left after this deduction, the second codicil provides, shall be held and invested, and kept invested during her life, by his executors and trustees, who shall collect and pay or apply the interest and income thereof to the use of his daughter Emily, Mrs. Paret, so long as she shall live, and if she be not living, or on her death, that his executors and trustees convey, pay and assign such residue of such share to her issue absolutely.

The sixth clause of his will authorizes and empowers his executors to pay all taxes and assessments which may be imposed upon his property, until the division or sale thereof; to pay all premiums of insurance and sums necessary to keep the buildings in. good repair; to lease or rent any of his real estate until such sale or division, and to make all divisions and partitions of his real and personal estate or the proceeds thereof, and also to make, seal, execute and deliver all necessary deeds or other instruments in writing, with or without seal, necessary in the premises.

The will- vests the entire legal estate in said residue of the lands of which Rufus Story died seized, in the trustees named in the will.

The chancellor holds that the power of sale exists only for the purpose of creating the fimr shares, one for each daughter mentioned in the will, and that after said division or partition of the residuary estate the trustees must hold Mrs. Paret’s share, just as it had been set off, for the benefit of herself and her children, without the power to sell any of this real estate, although it may be unproductive or depreciating in value. If this view is correct, they cannot sell even to provide Mrs. Paret an income therefrom during her life; they cannot sell even to stop the accumulation of taxes and assessments on unproductive real estate. The ruling below might seriously affect the estate and deprive her of income under certain contingencies, and that, too, without benefiting in any way her issue, who are to take absolutely after her death.

If we can ascertain the intention of the testator, that must govern. The only object of construction is to ascertain his will. The language should be very clear to warrant a construction that might lead to such results as might flow from excluding Mrs. Paret’s share from the exercise of the trustees’ discretion to sell when proper occasion demanded it.

An examination of the will and codicils will satisfy anyone that the testator entertained great affection for all of his daughters, and intended to make a division of his estate among them that should be equally just to all. After dividing his estate into four shares, one for each of his daughters, he took into consideration the fact that he had loaned or advanced to the husband of his daughter, Mrs. Paret, nearly fifty thousand dollars, and he deemed it just that this sum should be repaid out of the one-fourth share allotted to her, and be divided among his other daughters, and the indebtedness thus canceled. He directed his trustees to give to his other three daughters their shares absolutely. For reasons which seem readily apparent upon the face of the will and codicils, he determined to protect his daughter, Mrs. Paret, by securing to her an assured income from her share during her .life, and to secure this income to her he directs, in his second codicil (after having revoked and annulled, in his first codicil, the appointment of Mr. Paret as executor and trustee under his will), that the said remainder of her share should be held and invested and kept invested, during her life, by his trustees, who were to collect and pay or apply the interest and income thereof to her use during her life, and on her death were to convey the same to her issue absolutely.

There is nothing in the will or codicils which is inconsistent with the continuance, after such division, of the power of sale which is expressly given to the trustees in the fifth paragraph of the will. On the contrary, there is strong reason for its continuance as affecting the one-fourth share set apart for the benefit of Mrs. Paret. There is nothing in the will or codicils that should induce us to conclude that when he gave his trustees the broad and unqualified power to sell, in their discretion, all or any part of liis residuary estate, that he only had in contemplation the interests of his three daughters, and that it was his desire to limit the use of this power so as to be only for their benefit and for the purpose of making a division, so that their share might come to them absolutely without trouble or difficulty. Why should he limit this, power so as to make it available only for the benefit of his three daughters, who were to immediately get their share of his estate absolutely ? He had clearly expressed his intention that his daughter, Mrs. Paret, should get the income of her share during her life, and is it conceivable that, with this intention to secure her such income with certainty, he intended •to tie up all the real estate in her share so that his trustees, in whom he reposed unlimited confidence, could never sell or dispose of the same, no matter how clear it was to them that the interests of Mrs. Paret, and her children after her, demanded that certain land in her share should be sold, so as to produce an income ? This father, when he made his will, was not thinking primarily of Mrs. Paret’s children, but of her, his own daughter, and of securing to her an income during her life. With this object in view, the will vested his entire legal estate in the trustees. The superadded power of sale did not render the devise of the fee to the trustees invalid; the legal estate remained in fee simple in the trustees, liable to be extinguished only by the trustees under the power of sale, or by their conveyance thereof under the terms of the trust.

They extinguished the legal estate to the land set apart by said partition or division to represent the shares of the three daughters, Mrs. Palmer, Mrs. Rowland and Mrs. Marshall, by absolute conveyances to each of said daughters. The legal estate in the land set apart by said partition or division to represent Mrs. Paret’s share they did not convey to anyone. The legal estate therein remained in them by the second codicil, to be held and invested and kept invested during her life,” and they were directed to collect and pay or apply the interest and income thereof to the use of his daughter Emily [Mrs. Paret] so long as she shall live,” and after her death to—

“ pay and assign such residue of such share [such residue being the one-fourth of the real and personal residuary estate set apart by said division in severalty for Mrs. Paret, less the §49,539.28 to pay Mr. Paret’s debts] to her issue absolutely.”

The power of sale and the trusts imposed on this land originally by the will were, therefore, as applicable to this land, when set apart in severalty for Mrs. Paret and her issue, as when this land was originally conveyed to the executors in trust. This would be the rule at law in reference to partition of land held jointly by several persons. If the will had devised the residuary estate to the four daughters directly, a partition thereof would not have produced any effect upon or alteration of their estate in the land; it would merely have severed the possession, and thereafter each, instead of being seized of an undivided fourth, would have become seized in entirety of one-fourth, and that occupation and estate which before was in common would have become several and distinct. Den, ex dem. Howell, v. Howell, Spenc. 411, 416. This rule should be applied to the equitable estates of the daughters, and the partition or division which set apart the land in question (with other land) merely set it apart in severalty, so that thereafter the trusts affecting Mrs. Paret’s share affected this land in severalty. The power of the trustees to sell continued as to this land, because it was part of the land that originally passed to them under the will, in trust, and they still hold the legal title thereto under the will. The language of the second codicil shows clearly that there was no intention to extinguish this power of sale, because the trustees were to invest and keep invested Mrs. Paret’s share, which consisted of both real and personal estate. We cannot read the second codicil so that the trustees shall hold the real estate thus set off for Mrs. Paret during her life, and only invest such personal property as was set off for her share, without supplying language which the testator did not use and changing the clear meaning of that which he did use. The testator having given the trustees power to sell all or any of the residuary estate of which he died seized, when he came to this share, set apart in severalty for Mrs. Paret and her issue, naturally used the word invested ” with reference to both real and personal estate both were to be held and invested, under all the powers and trusts of the will, for the purpose of carrying into effect his primary object of securing a certain life income to Mrs. Paret.

The power of the trustees to sell as well after as before the setting apart of Mrs. Paret’s share in severalty, is clear under the will and the codicils annexed thereto. This interpretation will also enable the trustees to better preserve and manage this part of Mr. Story’s estate.

The power of sale being clear, the purchaser would take a good title to the premises by deed from the trustees, and a bill for specific performance will lie to compel Parker to carry out the terms of his written agreement of May 25th, 1892.

The demurrer should have been overruled, and the order that it should stand and be allowed should be set aside and reversed.

For reversal — Abbett, Depue, Dixon, Gaeeison, Lippincott, Reed, Van Syckel, Bogebt, Bbown, Smith — 10.

For affirmance — None.


author: Per Curiam.

text:
    Adeline J. Gordon, administratrix cum testamento annexo of George P. Gordon, deceased, et al., and Augustus Sidney Doane, appellants, v. William W. Old, executor &c. of Lenora M. Van Wyck, deceased, Pauline Theresa Reitz, Samuel Richard Ruyssenaer et al., respondents.
    On appeal from a decree of the ordinary, whose opinion is reported in Gordon’s Case, 5 Dick. Ch. Rep. 397.

      Mr. Gilbert Collins, for the appellants.

      Mr. Barher Gummiere and Messrs. Miller & Old (of New York), for the respondents.
   Per Curiam.

The paper in question, purporting to be the last will of George P. Gordon, deceased, was presented to the ordinary for probate on the 17th of January, 1891. No caveat was filed in the surrogate’s office of the county against the probate of such a will, and it appearing to the ordinary that it would be exceedingly difficult, if not impossible, to ascertain what interests would be affected by the probate and what persons should be notified of the proceedings for probate, the ordinary, under the circumstances, considered it expedient to permit probate in common form in the first instance, and if a contest should arise thereafter, to require solemn proof, and admitted the will to probate and granted letters cum testamento annecco to Adeline J. Gordon and William H. Corbin.

The deceased died at. Norfolk, in 1878, leaving a widow, Lenora M. Gordon, and a daughter, Mary Agnes Gordon, his only heir-at-law. At the time of his death he resided in Brooklyn, in the State of New York, and letters of administration were issued by the surrogate of the county of Kings, in the State of New York, to Henry J. Cullen, as public administrator.

On the 13th of February, 1891, shortly after the probate was made, Cullen, as the personal representative of the deceased, under the New York letters, and Lenora M. Wan Wyck, the widow of the deceased, and Pauline Theresa Reitz and Samuel Richard Ruyssenaer, devisees and legatees under the will of Mary Agnes Gordon, daughter and only heir-at-law of the deceased, presented a petition to the chancellor alleging that the said will was not the will of the deceased, and praying that the said probate be annulled and revoked, and that the parties filing the same be directed to proceed anew to prove said will, and that all persons concerned and interested be cited and made parties to the proceeding.

Upon filing this petition a rule to show cause was granted, testimony was taken, and the ordinary, being of opinion that the paper purporting to be the last will of the deceased was not executed by him, made his order and decree that the probate of the same theretofore granted be revoked and annulled, and also denied probate thereof. From this decree this appeal was taken.

The facts appear in the opinion of the ordinary.

The production of this will so long after the death of Mr. Gordon, and after the litigation in the New York courts over another will purporting to be his last will, tended to excite suspicion of its genuineness and made it eminently proper that it •should not be admitted to probate on mere formal proof. The ordinary, in admitting the paper to probate on such proof, contemplated that the order for probate should be final only in the event that the paper propounded as a will should stand the test of a controversy if any contest should arise, and the order appealed from was in effect setting aside the order previously made by the ordinary himself. Of the regularity of the practice and procedure adopted we have no doubt. This court, being of opinion that the paper presented for probate was not the will of the deceased but was a forgery, affirm the decree. Whether, when a will is admitted to probate in compliance with the statute and the practice of our courts, the court, of its own motion, or at the instance of the next of kin or other persons interested, may require it to be proved in what is known in the English law as solemn form, and if so, by what practice and procedure and in what court such an investigation shall be conducted, we do not decide.

The decree is affirmed.

For affirmance — Depue, Dixon, Garrison, Mag-ie, Reed, Van Syckel, Bogert, Brown, Krueger, Smith — 10.

For reversal — Hone.


author: Pee Curiam.

text:
    William C. Scudder, appellant, v. Isaac W. Budd, respondent.
    1. Complainant and defendant agreed to build houses for sale, the latter to advance the money and the former to contribute his skill and time as superintendent, each to have half of the profits after sale. — Held that, independently of the question whether a partnership existed between the parties, complainant was entitled to maintain an action for an accounting.
    2. Defendant had no right to charge complainant with the land used for building purposes at a greater price than its original cost, though it was bought with money furnished by him, and the title was taken in his name.
    3. Complainant -was not entitled to have the value of land bought for building purposes, but not used, brought into the account, since he had no interest in the land, but only in the profits arising from buildings erected thereon.
    4. It appearing without contradiction that defendant was to furnish all the capital, but was not to be allowed interest till the completion of each particular building operation, he was not entitled to a credit for. interest on a pui> chase-money mortgage given by him for land till the building thereon was completed.
    ■ On appeal by defendant from a decree in Budd v. Scudder, advised by Vice-Chancellor Green, whose conclusions are as follows:
    The complainant, Isaac W. Budd, and defendant, William C. Scudder, in 1885, entered into a parol agreement contemplating the purchase of land in or near Camden, the erection of houses thereon, their sale when completed and an equal division of the net profits when disposed of.
    The defendant is an uncle by marriage of the complainant, is a man of means and had been largely engaged in having houses built for sale, in which he had at times employed the complainant, who was a bricklayer and builder, as superintendent and overseer. For services so rendered, complainant was paid by defendant $40 a house. It was then agreed that they should “ go in together,” defendant to furnish all the money necessary and keep all accounts, complainant to contribute his skill and time and take entire management of the construction, and after the sale each was to have one-half of the net profits.
    There were eight independent- tracts purchased on which houses were erected, each operation, so called, being distinct, but in point of time overlapping one another, so that one would be in contemplation or under way before the completion of the prior one. There were one hundred and fifty-three houses in all built. The number in the operations varied from two to sixty-five.
    ■ There was a partihl settlement, it not being contended by the defendant to have been final, and he admits the complainant is entitled to an account for which the bill is filed. The contention arises as to the basis on which the account is to be taken, complainant contending that the relation of partners existed between them, which claim defendant resists.
    In the consideration of the question we must not be misled by the acts and reasons which assume a partnership as between third parties and alleged copartners, for, while such relation is often presumed in law to exist as to strangers from the conduct of the parties, partnership inter se can only arise from contract, not necessarily one of partnership by express declaration, but when the agreement made embraces all the incidents of that relation. It may contain one or more of such incidents without creating the parties partners. Whether parties are partners as between themselves or not, seems, however, to be of little importance unless questions of jurisdiction or rights of property are involved in its solution. The complainant’s compensation being a moiety of the net profits of the adventure, he is entitled, without question, to maintain his action for an accounting. Alpaugh v. Wood, 18 Stew. Eq. 153. While he has an interest in the net profits of the transaction, he cannot be held to have any interest in the property, for his contract rested in parol, the consideration money was paid by the defendant individually and the title was taken in the name of the defendant. The recovery of the complainant is not dependent on ascertaining the legal relation of the parties, but what he is entitled to under the terms of the arrangement between himself and Captain Scudder. As is said by Lord-Justice Cotton in Walker v. Hirsch, 27 Ch. Div. 460, after stating the rule relating to acts which are held to -establish a partnership as to third parties (at p. 468): “Very different questions arise when we come to the question which exists here, whether the parties are, between themselves, partners. I have used the word ‘partners/ but, really, what we ■ have to consider when we are considering questions as between the parties themselves, and not as between strangers and one ■of the parties or all of them, is really this — what rights had the ■contract entered into in fact given one of the ¡parties against the other ? And that is the whole question when the matter arises as between those who are alleged to be — I will use now the ambiguous term — ‘partners.’ Therefore, what we really have to consider is this — what, on the contract between the parties, .are the rights which that contract has, inter se, given to one as •against the other ? ”
    To what credits and allowances are the complainant and ■defendant respectively entitled under the arrangement between them on the termination of their joint transactions ?
    The agreement, in general terms, was that Captain Scudder was to furnish the capital and Mr. Budd was to devote his time .and skill, and the net profits, when realized, were to be equally divided. The full arrangement between them, however, is to >be gathered from what was done under it, as well as from the -evidence of what was said.
    Captain Scudder paid the purchase-price of all the land and the cost of all the houses. He owed Mr. Budd, at the commencement of their joint transactions, $1,640.08, which he “left in ” the operations, and Budd agreed “ to leave all the money he ■could spare out of his business in the operation.” This embraced •a portion of the material furnished by his firm, as well as his ■unascertained profits in any operation which was completed. This money, $1,640.08, and the other “ left in ” by him, viz., his share of profits, wa-s to be paid him when the whole operation was finished. Scudder was to receive six per cent, interest -on one-half of his investment in any one operation after it was completed until the houses were sold. If they were rented, Budd was to receive one-half of the rents collected. In some instances money was raised on notes signed by Budd, but these were all paid by Scudder. In one instance- money was raised by a mortgage of a tract by a person to whom Scudder transferred the title for that purpose. In some cases part of the purchase-money of land was secured by consideration-money mortgages. All payments, however, were eventually made by Captain Scudder.
    The operations were, as a rule, carried on as follows: The attention of one or both of the parties being directed to a certain tract of land, they would get its dimensions and probable cost, and plot it out for the purpose of ascertaining how it could be most advantageously divided, and how many houses could be profitably erected upon it, and what they could probably be sold for. Then, in most of the cases, one or the other of them would see what was the lowest the land could be purchased for, aud if they concluded that it promised a profitable operation, the land would be bought, and the title taken in the name of William C. Scudder, who would either pay or settle for the consideration money. The size, character and number of the houses having been settled, estimates would be obtained by the complainant for their construction, contracts for which, on receiving the approval of the defendant, would be awarded as he directed. The buildings would then be commenced and continued to completion under the direct supervision of"the complainant, the materials and cost of labor being, either in the first place or ultimately, all paid by Captain Scudder.
    When the houses in a particular operation were completed, the aggregate cost of the land occupied thereby and the buildings would be ascertained, and that amount divided by the number of houses erected on that particular tract, in which way the cost of each house was arrived at.
    While buildings were being erected on any one' tract, the account of expenses incident to that operation were charged appropriately to that transaction. After the entire expense had been apportioned to the different houses, an account was opened with each house, and if any alterations or repairs or taxes or similar outlays were made with reference to a house, it was charged against it, and if it was rented an account of such rent was kept in its account.
    When the houses were ready for sale an estimate was made as-to what- each had cost, and the price was then fixed by the complainant and defendant, at which it was to be disposed of, and on a sale being effected the title would be conveyed to the purchaser by Captain Scuddei’, who received the purchase-money.
    By the agreement the defendant was to be repaid all his advances in each operation, with interest on one-half thereof from the completion of the houses built in it, and the complainant was to be paid what might be due him for materials furnished, and on the completion of the whole operation to be paid the amount due him from Captain Scudder, $1,640.08, and one-half of the-net profits, including one-half of the rents received, defendant retaining the other half of the net profits.
    No ascertainment of net profits was made at the end of the different operations, although a statement and partial settlement was once had.
    On the basis of the agreement as thus stated the points in dispute, in my judgment', should be disposed of as follows:

      First. The complainant claims that the defendant has charged, as the value of some one or more of the tracts improved in the operations, a greater price than he actually paid therefor, and that this is improper. There is no dispute, so far, at least, as the tract called the “ Wister tract” is concerned, that the defendant has put on it an increased valuation over its cost tQ him. I do not think that this is in accord with the spirit of the agreement. The complainant was to devote his skill and time to the supervision of the work; the defendant was to furnish- all the money necessary to carry on and complete it. This embraced the purchase of land as well as material; but, when purchased and used in the adventure, he was only to be repaid his advances-in arriving at the net result of the operation. It cannot be supposed that the parties intended that the defendant might speculate to his coadventurer’s disadvantage on his land purchases, any more than he could on the brick and lumber he bought and paid for. The enhanced value of the land was one of the elements of the complainant’s compensation, for it contributed to increase the net profits. The fact that materials were purchased from the firm of which the complainant was a member, as well as from the firm of which the defendant was a member, does not militate against this position, for it is to be assumed that the purchases from both firms were at market rates, without any personal advantage or disadvantage to either complainant or defendant. *

      Second. One of the tracts purchased was not at all used for building purposes by the parties, and defendant either retained that part or has sold it. If I understand counsel correctly, complainant claims that the value of this unbuilt-upon land is to be taken into the account. I do not see on what principle such claim can be sustained. The relations of the parties to the title has been before stated, and complainant has no interest therein which can be recognized; it is only when the land had been used in an operation which had resulted in a profit that his interest attaches to anything tangible, and then to the profits. This court might protect him if his rights were jeopardized, but it would not be on the ground of his having an interest in the land.

      Third. It is claimed that some of the land purchases Avere made by defendant by the payment of part of the purchase-money and giving a consideration mortgage for the balance, and that defendant has credited himself Avith interest moneys paid on such mortgages. If this is so, it is not correct. By the testimony of both parties, Captain Scudder was to furnish all the capital necessary, and Avas not.to be allowed interest until the completion of the particular operation, and then Budd was to pay him six per cent, on one-half. Under this agreement, defendant must pay the interest on any purchase-money mortgage up to the completion of the building on the mortgaged tract.

      Fourth. There was due complainant from the defendant when these transactions commenced, the sum of $1,640.08, Avhich he agreed to let remain in Captain Scudder’s hands for use in the business. This incident might have considerable weight in determining the question of partnership between the parties, though not a controlling one (Walker v. Hirsch, supra), but cannot be troublesome in these accounts. Captain Scudder’s bookkeeper has credited the amounts to Mr. Budd, and in stating the account there can be no objection to charging the defendant with the sum.
    There should be a reference to a master to take and state an account .on the lines suggested, with leave to apply for further instructions if necessary.

      Messrs. Grey & Grey, for the appellant.

      Mr. Henry M. Snyder, Jr., for the respondent.
   Pee Curiam.

Decree affirmed, for the reasons given in the court of chancery..

For affirmance — The Chief-Justice, Depue, Garrison, Lippincott, Magie, Reed, Van S yokel, Bogert, Brown,. Krueger — 10.

For reversal — Abbett, Dixon, Smith — 3.


author: Pee Cubiam.

text:
    Henry Price et al., appellants, v. Matthias Price, executor &c. of Daniel Price, deceased, respondent.
    1. Testator devised and bequeathed to his wife all his real and personal estate for life, with power of disposition, but provided that if she died intestate “ my property ’ ’ be distributed according to the following bequests. Then followed a devise of certain land, and several bequests, after which were direetions to be followed in case “my property” fall short of the bequests, or “my estate ” exceed the bequests. A codicil confirmed the will, except as disposition of “my property” is changed by the codicil, and finally expressed the-hope that, as there were no debts against his estate, the legacies would be paid without such waste as would call for large sacrifice of real estate or undue-pressure in collection of mortgages. — Held, that testator intended his real estate to be included in the property which was to go to pay the bequests.
    2. In construing a will to determine whether testator intended his legacies to he charges on the real estate, the fact that the legacies fai exceeded the-personal property may be considered.
    On appeal from, a decree advised by -Vice-Chancellor Pitney, in Price, Executor &c., v. Price et al.

    The bill in this case was filed by the executor, asking for the construction of the will, and the contest was between certain legatees and the devisees of the real estate as to whether the legacies were charged on the real estate.
    The vice-chancellor, after hearing Mr. D. A. Ryerson, for the complainants, and Mr. Robert H. McCarter, for the devisees of the real estate, without calling on the several counsel for the legatees, delivered the following oral opinion:
    I am certainly very much obliged to counsel of defendants for the- argument he has made, and having recently had occasion to-go through the line of cases which he has cited, I perhaps was better able to appreciate it, and am sorry to say that for the same reason he did not convince me that he was right in this case.
    I have looked at this will carefully, and have compared it in my mind with the case of Bragaw v. Bolles, 6 Dick. Ch. Rep. 84, recently decided by me, and also with the cases there cited and the principles illustrated, and I come to the conclusion that in this case the legacies are charged on the lands. I can state, very briefly, my reasons, and give the parties an opportunity to take an appeal much quicker than if I took the case home and wrote out my views at length.
    In the first place, the very first devise that the testator makes-is, “ I give, devise and bequeath to my wife Charity all of my real and personal estate ” — that is a complete devise of all his property, real and personal — “ to have and to hold during her natural life ” &c., “ and dispose of at any time she may deem advisable, by will or otherwise, but should she' die intestate then I direct distribution of my property to be made according to the following bequests.”
    That direction of distribution of his property, to be made “ according to the following bequests,” must, as it seems to me, be held to refer to the property he has just spoken of, that is, all his “ real and personal estate.” That shows what property he had in his mind and intended should be distributed by the bequests he afterwards made.
    He goes on and makes bequests, and in every one he uses the-words “give and bequeath,” except where he gave land in Michigan. After that he uses the words “I give and bequeath ” in all these fifteen or twenty bequests, and counsel made a strong argument based on the use of those words, but I think it fails entirely when we consider that what he gave was money. It was perfectly proper to use those words, even though that money was the result of the sale of land.
    Then, after giving those bequests he uses this language: “ Should my property fall short in the settlement of my estate of the within-named bequests ” — what property ? He had in the beginning of his will used the words “ all of my real and personal property,” as I have already said, and he wished the “ distribution of my property according to the following bequests.” Now, when he spoke of “ should my property fall short in the settlement of my estate of the within-named bequests,” he referred to the same property that he had referred to in the second-item of his will, where he had given and devised all his real and personal estate to his wife; so that I have not any doubt that the property he referred to in that clause was real and personal property both. He goes on then and uses this language:

      1 ‘ Should my property fall short in the settlement of my estate of the within-named bequests, I wish the legacies to individuals, the professorship to the College at Princeton, the Old Ladies’ Home of Newark, and German Theological School, to be paid in full and deductions made from the various bequests made to benevolent societies [it means other bequests to benevolent societies] in proportion to the amount given to each, and should the amount of my estate exceed the bequests, then I wish the Theological Seminary at Princeton, and German Theological School in the care of the Newark Presbytery, to be made my residuary legatees in equal shares.”
    How, what did he mean by the words “ my estate?”
    There are abundant authorities for the position that where a person uses the words “my property ” and “ my estate,” and he has immediately before that been dealing with real estate as well as personalty, that by those words he means real and personal' estate. A leading case in that line is Laing v. Barbour, 119 Mass. 523, referred to in Bragaw v. Bolles. And in order to arrive at the conclusion that by the words “my estate” and “ mv property ” in this last clause — the residuary clause here referred to — was meant real and personal estate, we have by no means to go as far as the court went in Laing v. Barbour, in which I think they went too far. But the same line of reasoning as led to the conclusion arrived at there, leads to the same conclusion here.
    Then we go on, and in the first codicil to his will he says: “ I hereby expressly confirm my former will dated 6th day of May, 1875, except so far as the disposition of my property is changed by this codicil.” How, he uses the general phrase ‘/property” there, and the presumption is that he means the property that he had spoken of in his will, and there he spoke of both real and personal property.
    Then we come to the second or last part of it, and to the last clause of it. I confess I do not see how it is possible to escape the effect of that. I listened attentively and with great satisfaction to the very ingenious and instructive argument of Mr. McCarter on that subject, and I am unable to adopt his solution of it. “And lastly, as I have no debts or demands against my estate, I hope the legacies may be paid by my executors without such waste [or “haste,” whichever you may choose to make it; say “ waste ” is a mistake for “ haste ”] as will call for large sacrifice of real estate or undue pressure in the collection of mortgages.” I think it Avould be a strained construction to say that the sacrifice of real estate there did not refer to the sacrifice in its.sale in order to pay these legacies, or that it referred only to the sacrifice of real estate which should be sold under foreclosure — other people’s real estate. It seems to me that the natural construction to put upon that language is that it referred to the real estate of the testator which he expected to be sold.
    Therefore, I think that the testator meant that his real estate should be included in the property which was to go to pay these bequests. But the difficulty which I stated some time ago has not yet been spoken to by counsel, and if they wish to be heard I will hear them, and that is whether or not, under the implication contained in this last codicil, there is a power of sale in the executors on which they can go on and sell and give a good title or whether it is not best that they should file a cross-bill, to which, of course, all the heii;s-at-law must be made parties, by which the property may be ordered sold. It is not clear that there is not a power of sale. The language is:
    “And lastly, as I have no debts or demands against my estate, I liope the legacies may be paid by my executors without such waste as will call for large sacrifice of real estate or undue pressure in the collection of mortgages.”
    A very ingenious argument may be made, and I have no doubt counsel have in their briefs a very ingenious argument in favor of the position that that gives a power of sale. But, out bono f Why ask a purchaser to take title under that, when, if my view of the will is right, the property can be sold under a bill in which some of the legatees or the residuary legatee shall be actors, and a perfect title made ? There the sale will be not by the executors as such under the will, but by the court — by decree of the court that it be sold to pay these legacies, and so much only of it shall be sold as is necessary for that purpose, and no question could be made about the title at all.
    Now, there is one other thing bearing upon the construction of this will, and that is the amount of property. I may as well mention it. It is clear that there is a deficiency of personal estate to pay these legacies — a very large deficiency — and probably to satisfy them it will require nearly or quite all the real aud personal property. There has been no valuation of the real estate, but the personal property amounted to only $60,000 and the legacies are over $100,000. Now, the testator knew that. He was a man of intelligence and yet he gave these large legacies. Now, while that, standing by itself, as has been decided in this state, is not sufficient except in the case where there are no heirs-at-law — is not of itself sufficient to hold that the legacies are charged on the real estate — yet it is a very strong circumstance, as I think was said by Judge Dodd in his opinion in Johnson v. Poulson, 5 Stew. Eq. 390 — a very strong circumstance to indicate that the testator did intend that his real estate should pay his legacies. In addition to what I find on the face of the will, I feel that it is in confirmation of my view.
    I therefore hold that these legacies are charged on the land and that the legatees have a right to have the land sold to pay them. I hold, of course, that there is no doubt as to the identity of the benevolent institutions, and the bequest in that one case may be given to that institution — Board of Church Erection.

      Mr. Robert H. MaCarter, for the appellants.

      Mr. David A. Ryerson and Mr. Frederick Q. Burnham, for the respondent.
   Pee Cubiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — Abbett, Depue, Dixon, Gaebison, Lippincott, Peed, Van Syckel, Bogeet, Bbown, Keuegee— 10.

For reversal — None.


text:
    John S. Leslie, appellant, v. Edward Leslie, respondent.
    1. A party to an arbitration agreement may estop himself from questioning the jurisdiction of the arbitrators, even in a case where they have clearly exceeded their jurisdiction, by appearing before them, admitting that he is indebted to the other party, and agreeing that the arbitrators shall take such debt into consideration and award how it shall be discharged.
    2. But an arbitration agreement cannot be changed or altered unless the minds of the parties meet and mutually assent to the change or alteration.
    On appeal from a decree advised by 'Vice-Chancellor Van Fleet, who filed the following conclusions:
    The legal questions involved in this case have already been considered and decided. In disposing of the demurrer filed to the bill, it was held that the award shows, on its face, that it is fatally uncertain and inconclusive, and also that, on a comparison of the award with the arbitration agreement, it appears that the arbitrators exceeded their authority and made an award in respect to matters not submitted to them. Leslie v. Leslie, 5 Dick. Ch. Rep. 103. To complainant’s case, standing in this position, the defendant makes two defences — -first, that the complainant, after he had seen the award and fully understood what it contained, assented to its execution, and should, therefore, be adjudged to have estopped himself from disputing its validity; and second, that the complainant was responsible for the arbitrators having exceeded their jurisdiction, the averment in that regard being that the complainant appeared before the arbitrators and admitted that he was indebted to the defendant in the sum.of $3,000, and agreed that the arbitrators should take this debt into consideration in making their award and direct how it should be paid or discharged. The precise form in which these defences are alleged appears in an opinion written on a motion to strike out parts of the defendant’s answer, reported in 5 Dick. Ch. Rep. 155.

    The burden of proof is on the defendant., Unless the evidence in support of the defence preponderates in the defendant’s favor he cannot prevail, and a decree must go in favor of the complainant. The case is destitute of the least proof in support of the first defence. There is not only no evidence going to show that the complainant assented to the execution of the award, but, on the contrary, it is shown by the evidence of every witness giving testimony on the subject, that from the moment he knew what the award contained,- every word he uttered and every act he did plainly indicated that he was dissatisfied with it and did not intend to abide by it. The award was made by two arbitrators, one chosen by the complainant and the other by the defendant. Within two or three hours after the complainant had read the award, it is proved that he charged the arbitrator he had selected with having been improperly influenced by his associate, and stated that he was not done with the matter — he had plenty of money — obviously meaning that he meant to try to undo, by litigation, the wrong which he believed had been committed against him. The arbitrator chosen by the defendant stated, while on the witness-stand, that the complainant had said to him, within less than four hours after the publication of the award, that he had pulled the wool nicely over the eyes of the other arbitrator. He also testified that he had tried to persuade the complainant to abide by the award by accepting a check for $7,700 and some other papers tendered in execution of the award, but that the complainant promptly and offensively refused to receive them. It is also shown, by the decided weight of the evidence, that when the arbitrator chosen by the defendant said to the complainant, within less than three hours after the publication of the award, that he had better be satisfied with the award, the complainant instantly replied, in the hearing of the defendant, that he would never be satisfied with it. The fact is that there is not a speck of evidence supporting the defence of assent. On the contrary, all the evidence in the case shows plainly that the complainant, both by conduct and speech, from the moment he knew what the award contained, manifested, in the most unmistakable manner, strong dissatisfaction with it, and that he would not perform it, nor allow it to be performed, if he could prevent it. The complainant undoubtedly believed that the award did him great injustice, and his conduct, from the moment he knew what the award contained, throughout evinced strong dissatisfaction and a deep sense of wrong.
    Nor is the other defence proved. The arbitrators strayed beyond their jurisdiction in this: They attempted to determine in what amount the complainant was indebted to the defendant, and also in what amount the complainant was indebted to the Leslie Brothers Manufacturing Company, when, in fact, neither of these matters had been submitted to them. Indeed, the Leslie Brothers Manufacturing Company was not a party to the arbitration agreement, and, consequently, could neither be heard by the arbitrators nor bound by anything they did. After the arbitration agreement had been signed, the arbitrators, before undertaking the duty imposed upon them, attempted to induce the complainant and defendant to agree upon an amicable adjustment of all their disputes and difficulties, including the moneys drawn by them respectively from the Leslie Brothers Manufacturing Company. Such an agreement was drawn by one of the arbitrators. When completed, the complainant was unwilling to sign it. He wanted time for consideration, and after he had considered it he refused to sign it. It was understood that the proposed amicable agreement should embrace all differences and disputed matters between the parties. While this agreement was in course of negotiation, allusion was made to a due-bill for $1,000, which the defendant claimed to hold against the complainant, but which the complainant alleged to be spurious, and also to the state of their respective accounts with the Leslie Brothers Manufacturing Company, and also as between themselves. The evidence shows that while this agreement was under discussion the complainant told one of the arbitrators that the due-bill was a forgery, and also that the same fact was shortly afterwards communicated to the other arbitrator. ■ It was in this way that the arbitrators obtained knowledge of the matters in respect to which they exceeded their jurisdiction.
    There is not a single shred of evidence going to show that the complainant admitted that he was indebted to the defendant. On the contrary, the proof shows that whenever the dne-bill was mentioned he denounced it as a spurious paper. Nor does the evidence show that the complainant uttered a single word indicating that he consented or was willing that the arbitrators should, in making their award, take cognizance of any debt that he owed the defendant. The utmost extent to which the evidence on the part of the defendant goes, on this point, is this— that the defendant laid evidence of his debt before the arbitrators and the complainant said nothing. The defendant’s own evidence furnishes a fair sample of all the testimony on this point in the case. He says, during the progress of the arbitration, one of the arbitrators asked if it was understood that they were to settle all disputes, so that there should be no further trouble or disturbance, and that he said in answer: “ I told them I wanted all disputes settled, and no more wrangling or fighting about it, and I understood my brother [complainant] agreed to the same thing.” His counsel then put this question: “ Did he say anything or consent by any motion? He was present, wasn’t he ? ” To which the defendant answered: “ Yes, sir; but I cannot remember his words or whether he said anything at all or not; but he didn’t raise any objection in my presence.”
    The arbitrator chosen by the defendant says that both parties at one time consented that all matters in difference should go into the settlement, but he cannot say whether such consent was given while the amicable agreement was under discussion or while the arbitration was in progress. While the other arbitrator testifies that he is unwilling to say that the complainant did not say, when the due-bill was presented, that that was a matter between his brother and himself, with which the arbitrators had nothing to do, and that if he owed his brother anything he was good for it, and his brother could sue him for it. The complainant swears positively that that is what he did say, and his testimony is corroborated. A female stenographer who took notes of parts of the evidence offered before the arbitrators, says that there was a sum in dispute between the parties, which the complainant seemed to think was outside of the jurisdiction of the arbitrators. She said she was unable to repeat the complainant’s language, but she knows that he disputed the claim and that the substance of what he said was that the claim was one which the arbitrators had no right to decide.
    This résumé embraces all the material evidence on this point. It proves a denial and not an admission, and a protest against jurisdiction and not a consent to Jurisdiction.
    The offers to purchase laid by each of the parties before the arbitrators were admitted in evidence, not as tending to show that the terms of the arbitration agreement had been enlarged or changed, but merely for the purpose of giving the complainant’s offer such weight as it might appear to be entitled to, as a contradiction of his evidence when he said that he had never consented in any way that the arbitrators might, in making an award, depart from the terms of the arbitration agreement. But the counsel of the defendant, on the argument, contended that these offers were entitled to an entirely different effect from that which was ascribed to them when they were admitted in evidence. His claim is that they enlarged the agreement and gave the arbitrators authority to make the award they did as to the way in which the defendant should pay the complainant for more than two-thirds of the value of his stock. I cannot adopt this view. It appears to me to be utterly fallacious. No change or alteration could be made in the arbitration agreement after it was signed except the minds of the parties came together and assented to the change. Their minds must have met in assent. Nothing of that kind was done or even attempted. So far as appears, neither of the parties ever even thought of changing the agreement. Each offer was made separately and secretly, with no intent or thought of changing the agreement, but manifestly with the sole design of inducing the arbitrators to award the stock of the other to the one who made the offer. How far the complainant’s offer might have had the effect to estop him from attacking the validity of the award in case the defendant’s stock had been awarded to him upon the terms of his offer, it is, of course, unnecessary, in the present condition of the case, to consider.
    The award must be declared void. The complainant is entitled to a decree, with costs.

      Mr. John W. Griggs, for the appellant.

      Mr. John W. Harding, for the respondent.
   Per Curiam.

Decree affirmed, for reasons given in the court of chancery.

For affirmance — The Chiee-Justice, Abbett, Depue, Garrison, Lippincott, Magie, Reed, Yan Sycicel, Bogert, Brown, Krueger, Smith — 12. :

For reversal — Dixon—1.