author: Depue, J.

text:
    Elizabeth Martling, appellant, v. Stephen V. R. Martling et al., respondents. David Martling, appellant, v. Stephen V. R. Martling et al., respondents.
    1. A conveyance was made, in 1851, in fee to trastees, declaring the following trusts: “First. To permit Elizabeth Martling (now living) to have, receive and enjoy the rents, issues and profits thereof during her natural-life, free from the control of her present or any future husband, and to her separate use, subject, however, to the limitations thereinafter mentioned. Second. To sell and convey in fee-simple the whole or any part thereof, lease, rent or mortgage the same or any part thereof to such person or persons, for such term or terms, for such sum or sums, and on such conditions as the said Elizabeth, by writing under hand of her own free will may direct. Third. In ease of a sale and conveyance as aforesaid to invest the net proceeds, after paying said encumbrances, upon good and sufficient security, and pay her, the said Elizabeth, the interest accruing thereon yearly and every year, or to reinvest said net proceeds in the purchase of other real estate, as the said Elizabeth by writing may direct, to be held according to the trusts in the said deed declared. Fourth. In further trust, to sell and convey, if necessary, the whole or any part of said premises to pay off, satisfy and discharge the encumbrances' now being and existing on the same as aforesaid. Fifth. In further .trust, upon the death of the said Elizabeth to convey the lands held under the trusts therein declared, or such parts thereof as may then remain, or if the same shall have been sold, to dispose of the proceeds thereof unto such person or persons as the said Elizabeth, by writing in the nature of' a last will, executed by her in her lifetime, may have appointed and directed, and in default of such appointment unto her heirs-at-law or next of kin, as may be.”
    2. The trustees are both dead and the heir of the survivor is an infant. On bill to declare the trust extinguished and to compel conveyance to Elizabeth Martling, who is now a widow — Held, (1) The trustees, by force of the conveyance, took a legal estate, the trust not being uses executed by the statute of uses so as to transfer the legal estate to the eestui que use. (2) The legal estate being in the trustees, an equitable estate vested in Mrs. Martling. (3) The trust is a continuing trust until completely executed, and the legal estate will remain in the trustees until the trust estate is transferred to the devisees, heirs-at-law or next of kin of Mrs. M., the persons ultimately entitled. (4) The power to sell and convey, coupled with the words directing the trustees to invest &e., and pay interest &c., or reinvest the proceeds in real estate &c., to be held according to the original trust, imports a sale for a consideration — a bona fide price. (5) The rule in Shelley’s Case applies as well to equitable estates as to legal estates, and a limitation which in a legal estate would create a fee will have like effect with respect to an equitable estate. Cushing v. Blake, 3 Stew. Eq. 689.

       (6) The rule in Shelley’s Case is a rule of positive law and not of construction. Where, upon the construction of a grant or devise, the rule is found to be applicable, it cannot be controlled by any expression of a contrary intent. But whenever the rule in Shelley’s Case is invoked a preliminary question arises, whether the word “heirs” has been used in such a sense as will make the rule applicable. (7) The word “heirs,” following an estate of freehold, indicates succession to the estate of the ancestor by his descendants, but it may be a succession by descent creating either an estate in fee or in tail in the ancestor, or the selection of those persons who by the canons of descent would be beirs as a mere designatio p'ersonarum of the objects of the grantor’s or testator’s bounty, in which event the heir or heirs take by purchase. Whether the word “ heirs” is used in its technical sense or in the limited, restrictive and untechnical sense, intending to point to such individual person as should be heir or heir of the body of the tenant for life at the moment ■of his decease, is a matter of construction of the grant or devise by the ordinary rules of interpretation. (8) In applying the rules of construction, the fact that the estate of the ancestor is expressly for life only and no longer, or that he shall not sell or dispose of the estate for any longer time than his life, and like expressions applied to the estate of the tenant for life, will not prevent the application of the rule in Shelley’s Case. Nor will an unexecuted power, which if executed would divert the estate from the channel of succession indicated by the words of grant or devise, of itself supersede the rule in Shelley’s Case. (9) The construction to determine the meaning of the testator or donor in using the word “heirs” will be from the language of the entire instrument, and if it appears from it that the grantor or devisor did not use the word “heirs” in its technical sense, but in its popular sense, the word “heirs” will be construed in its untechnical sense as a word of purchase and not of limitation. (10) On a construction from the entire trust contained in the deed in question, the persons who are to take in succession as heirs-at-law or next of kin are to be ascertained as of the time of Mrs. Martling’s death, and the word “ heirs” is not a word of limitation, but a designatio personanm of those who should be her heirs at the moment of her death, and consequently Mrs. Martling took only an estate for life.
    On appeal from a decree advised by Vice-Chancellor Pitney, who delivered the following opinion :
    The bill is by a cestui que trust against tbe infant beirs-at-law of the surviving trustee and the children and heir apparent of the cestui que trust. The subject of the trust is land. The prayer is, first, that the trust may be decreed to have been surrendered and determined; or, second, that the infant trustee may be decreed to convey the land without consideration to such person as the cestui que trust shall direct; or, third, that the infant trustee be removed and a new trustee be appointed.
    David Martling, son, and one of the heirs apparent of complainant, answers, admitting the allegations of the bill, and, by cross-bill, sets up a conveyance from complainant to him of a portion of the trust estate, and prays a confirmation of his title. The other adult defendants join in an answer which asserts the existence of the trust, and join in the prayer for a new trusteed The infant defendant submits himself to the direction of the court.
    . The trust was created by a deed of bargain and sale, dated May 30th, 1851, given by Richard H. Paulison to Stephen Martling (husband of complainant) and Peter Acker, and to their heirs and assigns, and the survivor of them, and his heirs and assigns, as joint tenants
    “In trust, nevertheless, and upon the condition and limitations following— that is to say, that the said parties of the second part, their heirs and assigns, and the survivor and his heirs and assigns shall and will suffer and permit Elizabeth (complainant), now the wife of the said Stephen Martling, of the township of Hackensack aforesaid, to have, receive and enjoy the rents, issues and profits thereof during her naturallife, free from the control of her present or any future husband, and to her separate use (subject, however, to the limitations hereinafter mentioned), and in further trust to sell and convey in fee-simple the whole or any part thereof, lease, rent or mortgage the same or any part thereof, to such person or persons, for such term or terms, for such sum or sums, and on such conditions as the said Elizabeth, by writing under hand of her own free will may direct, said writing to be binding notwithstanding the coverture of the said Elizabeth ; and in case of a sale and conveyance as aforesaid, to invest the net proceeds, after paying said encumbrances, upon good and sufficient security, and pay her, the said Elizabeth, the interest accruing thereon yearly and every year, or to reinvest said net proceeds in the purchase of other real estate, as the said Elizabeth, by writing as aforesaid, may direct, to be. held according to the trusts herein declared; and in further trust to sell and convey, if necessary, the whole, or any part of said premises, to pay off, satisfy and discharge the encumbrances now being and existing on the same as aforesaid; and in further trust, upon the death of said Elizabeth, to convey the lands held under the trusts herein declared, or. such parts thereof as may then remain, or if the same shall then have been' sold, to dispose of the proceeds thereof, unto such person or persons as the said Elizabeth, by any writing in the nature of a last will, executed by her in her lifetime, may have appointed and directed, and in^default of such appointment, unto her heirs-at-law, or next of kin, armay be"; said writing in"the nature of a last will, to be binding for the purposes of this trust, notwithstanding the coverture of the said Elizabeth af the execution thereof.”
    The farm was purchased with the separate estate of the complainaut previously held in trust for her by her brother, Peter Acker.
    Both the trustees are dead, Peter Acker dying first. Complainant, the wife of Stephen Martling, deceased, at his death, had three children — Stephen H. Martling (oldest son and heir-at-law of Stephen Martling, the surviving trustee), Annabella Acker and David Martling, the defendants above named. These were all born before the conveyance in question. Stephen H. Martling died December, 1891, leaving the defendant Stephen V. R. Martling, an infant, his only son and heir-at-law.
    Both the trustees joined with complainant in a conveyance, for a nominal consideration, of a portion of the trust lands to the daughter, Mrs. Acker, the defendant.
    Stephen Martling, as surviving trustee, joined with complaint-ant in conveying another part, for a full consideration, to her son, David Martling, the defendant.
    Complainant and her husband as such, and not as trustee, conveyed another portion to David Martling, for a nominal consideration.
    Complainant and her husband as such, and not as trustee, conveyed to their son, Stephen H. Martling, now deceased, for a nominal consideration, another portion of the trust estate.
    There were, besides, two conveyances by complainant to her son David, which were the subject of controversy in Martling v. Martling, reported in 2 Dick. Ch. Rep. 122, which controversy was settled by another deed from complainant to David, dated December 16th, 1891.
    The defendants, Mrs. Acker and Mrs. Martling, as guardian ad litem of her infant son, Stephen V. R. Martling, are entirely willing that a new trustee should be appointed in place of Stephen, who is incapacitated by infancy for the discharge of an active trust involving the duty to look after and protect the rights of the heirs-at-law of the complainant, who, under the trust a.s claimed by the defendants, must, in default of appointment by her, take the estate at her death.
    Mrs. Acker denies the right of complainant to terminate the trust and to assume unlimited control over the estate.
    On the other hand, complainant aud her son David, contend that at the death of the husband of complainant, the object and purpose of the trust was accomplished, and the same came to an' end, and that the power of the complainant, under the terms of the trust, was so full and complete as to give her, at her option, the right to have a fee-simple in herself, and to that end to release and extinguish the trust.
    They found this claim, first, upon the construction of the deed itself, which they claim shows such to have been the actual intention of the settler; and second, they claim that the case comes within the rule in Shelley’s Case, which is still in force in New Jersey, as to conveyances of land, and that the effect of the conveyance, by force of that rule, was to vest in Mrs. Martling, the complainant, an equitable estate in fee, and that the legal estate is held by the trustee as a naked and executed trust, with the result that the complainant has the right to ask this court to determine it by directing a conveyance by the trustee directly to 'the complainant, and without consideration.
    The real object of the suit is to obtain a declaration and decree of this court to that effect. There is an allegation in the bill that Mrs. Martling had been unable to carry out a proposed sale of a part of the premises, on account of a doubt of her ability to make a good title by her individual conveyance.
    The difficulty which at once presents itself in granting the relief first prayed for, viz., that the trust is terminated, is as to how far such a decree would be of any value in the direction of enabling complainant to make a merchantable title. Upon the face of the conveyance, the persons ultimately interested in the trust are, in the absence of testamentary disposition by complainant, “ her heirs-at-law or next of kin, as may be.”
    Now, of course, unless it so happens that the persons who proved to be such heirs-at-law or next of kin at her death, are parties to this suit, they will not be bound by the decree of this court made herein. I think this court ought not to make such a decree, unless the case is so clear that a purchaser by contract would be decreed to accept it on a bill for specific performance. In the well-considered and important case of Jervoise v. Duke of Northumberland, 1 Jac. & W. 559, Lord Eldon declined to decree specific performance against a purchaser, where the title was held under a trust somewhat like the present, although he entertained a strong opinion that the case was within the rule in Shelley’s Case, and the present cestui que trust was tenant in tail and competent to convey.
    The same difficulty meets us in granting the second prayer, viz., to direct the infant trustee to convey to the complainant without consideration.
    I am unable to adopt the view that, looking at the scheme of the settlement, it was the intention of the settler to give such an absolute control of the title to the complainant as that she may dispose of it to her own use at any time during her lifetime. The limitation of the trust seems to have been prepared with care by a conveyancer of some experience, and he seems to have avoided giving such right. The mere fact that he does not give it in express terms, when it was so easy to do so, is significant; and it may well be doubted whether, if he had done so, it would not have defeated the very object of the trust.
    The provision for a sale and conveyance seems to me to mean a sale and conveyance for value. Else why provide for the investment of the proceeds ? I think it is the duty of the trustee of such a trust to see to it that, upon the sale of the estate, a proper price is obtained. Mortlock v. Buller, 10 Ves. 292; Doran v. Wiltshire, 3 Swanst. 699; 2 Sugd. Pow. *487; Lew. Trusts (Flint’s ed.) *427 § 18; Chance Pow. § 2418 et seq.

    It is contended by complainant that this settlement must be treated as one made by herself in all respects as if it had been a covenant to stand seized to uses. Grant that it must be so construed, still I find iu it no express reservation of a power of revocation. The power to direct a sale for a full consideration, which shall be subject to the same trusts, does not amount to a power in the settler to revoke absolutely.
    But, then, complainant relies upon the rule in Shelley’s Case. Her argument is that complainant clearly takes an equitable estate for life, with remainder to her right heirs, and hence she has a fee. It must be admitted that the rule in question applies to equitable as well as to legal estates, unless the legal estate be vested in trustees who have some duty to perform with regard to it. Or, as expressed by Mr. Cruise (6 Cruise Dig., tit. “Devise,” *284 et seq.; 3 Cruise Dig. (Am. ed., 1857) 356):

      “It has long been settled that in devises of mere trust estates, where no conveyance is directed to be made, the construction is the same in chancery as it would be in a court of common law upon a devise of the legal estate.”
    Here a conveyance is directed to be made, and the argument that it is within the case of Papillon v. Voice, 2 P. Wms. 472, and Lord Glenorchy v. Bosville, temp. Talbot 3, is not without force. I have looked at numerous cases, as well those collected in 1 Fearne Rem. *114 et seq., and Pres. Est. *387 et seq., as those collected by Mr. Cruise, ubi supra, and others still later, and, without commenting upon them in detail, I find it enough to say that I am not well enough satisfied that this case is within the rule in question to act upon such a conclusion in the way I am asked to do by the complainant. I will add that, at this day, the courts are not disposed to extend the rule in question to doubtful cases, because, confessedly, the effect of its application is to produce results contrary to the intention of the donor or testator, as the case may be.
    A modern case is In re Thurston, 154 Mass. 596.

    I, therefore, decline to advise a decree directing a conveyance by the infant trustee to the complainant without consideration. I will, of course, advise a decree directing him to convey to a new trustee to be appointed, the new trustee to hold upon the same trusts as the present trustee.

      Mr. Gilbert Collins, for the appellant David Martling.

      Mr. Cornelius Christie, for the appellant Elizabeth Martling.

      Mr. Washington B. Williams, for the respondents.

      The seventh paragraph of the syllabus in Cushing v. Blake, 3 Stew. Eq. 689, is misprinted, the word “not,” in the first line, having been omitted. The-paragraph should read: “A mere direction to convey will not convert” &c.— Bep.

   The opinion of the court was delivered by

Depue, J.

The bill in this case was filed for the construction of certain trusts created by a deed of conveyance of land. The prayer is (1) that the trust may be declared surrendered and determined ; (2) that the infant trustee (the original trustees being dead) may be decreed to convey without consideration to such person as Mrs. Martling may direct; and (3) that new trustees be appointed in lieu of the infant trustee.

The premises described in the trust deed were conveyed to the trustees subject to two mortgages — the one given by Henry Van Glahn and wife to Abraham Van Valen, dated December 8th, 1849, to secure the payment of $1,000, and the other given by Peter Acker to Henry Van Glahn, bearing date May 1st, 1850, to secure the payment of $1,500.

The deed is to the trustees, their heirs and assigns, and the trusts declared are:

First. To permit Elizabeth Martling (now living) to have, receive and enjoy the rents, issues and profits thereof during her natural life, free from the control of her present or any future husband, and to her separate use, subject, however, to the limitation hereinafter mentioned.

Second. To sell and convey in fee-simple the whole or any part thereof, lease, rent or mortgage the same or any part thereof to such person or persons for such term or terms, for such sum or sums, and on such conditions as the said Elizabeth by writing under her hand of her own free will may direct.

Third. In case of a sale and conveyance as aforesaid, to invest the net proceeds, after paying said encumbrances, upon good and sufficient security, and pay her, the said Elizabeth, the interest accruing thereon yearly and every year, or to reinvest said net proceeds in the purchase of other real estate, as the said Elizabeth by writing may direct, to be held according to the trusts in the said deed declared.

Fourth. In further trust to sell and convey, if necessary, the whole or ,any part of said premises to pay off, satisfy and discharge the encumbrances now being and existing on the same as aforesaid.

Fifth. In further trust upon the death of the said Elizabeth to convey the lands held under the trusts therein declared, or such parts thereof as may then remain, or if the same shall then have been sold, to dispose of the proceeds thereof unto such person or persons as the said Elizabeth by writing in the nature of a last will, executed by her in her lifetime, may have appointed and directed, and in default of such appointment, unto her heirs-at-law or next of kin, as may be.

The lands embraced in this conveyance were purchased with the separate estate of Elizabeth Martling, and by her and her husband conveyed to Richard Paulison, her brother, who made the deed which is the subject of consideration in this case.

The deed and the facts upon which this litigation arose are fully set out in the opinion of the vice-chancellor.

The grantees named in the deed by force of the conveyance took the legal estate in the premises conveyed, subject to the trust declared. The trust upon which the conveyance was made was not a use executed by the statute of uses (27 Hen. VIII. e. 10), so as to transfer the legal estate to the cestui que use. This statute was in substance re-enacted in this state by the seventh section of the act of March 17th, 1714. Rev. p. 165 66; Montgomery v. Bruere, 1 South. *282; Den v. Crawford, 3 Halst. 109, 113; Melick v. Pidcock, 4 Atl. Rep. 98. The settled doctrine in the construction of this statute, as established at an early period of the common law, is that the statute executes only the first use, on the principle that a use cannot be limited upon a use. Price v. Sisson, 2 Beas. 169 ; S. C., 2 C. E. Gr. 475; Croxall v. Sherered, 5 Wall. 268. And where the conveyance is by bargain and sale, and the trustees have active duties to perform which require a legal estate, such as to sell and convey and invest the proceeds of such sale, to lease, rent or mortgage, to sell and convey, and the like, in the execution of the trust, the legal estate becomes vested in the trustees, and remains. in them until the trusts are completely performed. 1 Cruise Dig. 386; Zabriskie v. Morris and Essex Railroad Co., 6 Stew. Eq. 22.

There is a distinction between a use executed by the statute of uses and an executed trust. Trusts are classified as executed- and executory on other considerations than those that arise under the statute of uses. An’ executed trust, as distinguished from an executory trust, is one in which the limitations and trusts are fully and perfectly declared; an executory trust is where the limitations are imperfectly declared and the intent of the grantor is expressed in general terms. In an executed trust the duty of the trustee is to carry into effect the trust as declared; in an executory trust the manner in which the intent of the grantor is to be carried into effect is left substantially in the discretion of the trustee. The trusts set out in the deed are fully and perfectly declared, and in the sense here defined are executed trusts, and, the legal estate being in the trustees, an equitable estate' became vested in Mrs. Martling. Cushing v. Blake, 3 Stew. Eq, 689.

The contention on the part of the appellants is that the trusts having been completely executed, and the 'estate of the trustees thereby terminated, Mrs. Martling was entitled to have the legal estate conveyed to her. The ultimate destination of the trust estate or its proceeds, as directed by the limitations contained in the deed, is to Mrs. Martling’s heirs-at-law or next of kin. The trust, therefore, has not determined, and is a continuing trust until completely executed by the transfer of the estate to those who shall be ultimately entitled.

It is also clear that the power to sell and convey as she may direct, construed in'connection with the succeeding words directing the trustees to invest &c., and pay interest &c., or reinvest in the purchase of other real estate, to be held according to the original trusts, imports a sale for a consideration — a, bona fide price. The opinion of the vice-chancellor on this head is entirely satisfactory.

The other contention on the part of the appellants is that, under this deed, Mrs. Martling took a fee under the rule in Shelley’s Case. This contention presents the real question in this case. In equity, equitable estates are construed as legal estates and are subject to the same incidents, properties and consequences as under like circumstances belong to similar estates at law; and in giving effect to the limitations of trusts, courts of equity adopt the rules of law applicable to legal estates. Among these rules is the rule in Shelley’s Case, and a limitation which in legal estates would create a fee, under the rule just mentioned, will have a like effect with respect to an equitable estate. Cushing v. Blake, supra.

The rule of law, laid down in Shelley’s Case, is that where the ancestor takes an estate of freehold with a remainder, either mediate or immediate, to his heirs, or the heirs of his body, the word “ heirs is a word of limitation of the estate and not of' purchase — that is, that upon such a remainder the estate vests in the ancestor himself, and the heir, when he takes, shall take by descent from him, and not as a purchaser. Under Shelley’s Case, where a prior estate of freehold is given to the ancestor, and a subsequent limitation contained in the .same instrument is expressed to be to his heirs, whether general or special, the general rule is that no estate is taken by the heirs, but an estate of inheritance, correáponding in quantum to the class of heirs specified, is taken by the testator. Chali. Real Prop. 1%J.. In other words, under the rule in Shelley’s Case, where lands are given to A. for life, with'a limitation over of an estate which in terms is expressed to be given to his heirs, the estate of the ancestor, though expressly given for life, is by force of this rule enlarged to a fee, the remainder over being executed immediately in the ancestor.

The rule in Shelley’s Case is a rule of positive law, and not of construction. Where, upon the construction of a grant or devise, the rule is found to be applicable, it cannot be controlled by any expression of a contrary intent. In such cases the devolution of the estate is irresistibly fixed. But whenever the word “ heirs is used in a conveyance or devise, and the rule in Shelley’s Case is invoked, a preliminary question arises, whether the word u heirs” has been used in such a sense as will make the rule in Shelley’s Case applicable. The scope of this inquiry and the manner in which it is to be conducted will appear in the authorities hereinafter cited.

Mr. Hargrave, in his discussion of the rule in Shelley’s Case, uses this language:

“ The rule in Shelley’s Case can no longer be treated, as a medium, either for finding out intention, or for assisting to execute it. On the contrary, the rule supposes the intention already discovered, and to be, that the gift or conveyance in question has first given to some person an estate of freehold, and then superadded a succession to the heirs general or special of that same person, by making Mm or her the ancestor, terminus or siirps, by reference to which the whole generation and posterity of heirs is to be accounted. Whether the conveyance has or has not so constituted an estate of freehold with a succession engrafted upon it, is a previous question, which ought to be adjusted before the rule is thought of To resolve that point is not the office of the rule in Shelley’s Case, nor from its nature can it contribute any assistance whatever. * * * What the donor or testator means by heir or heirs, or heirs-male of the body, or issue, should be first adjusted without the least reference to or thought of the rule. Till that meaning shall be settled, it is uncertain, whether the rule in Shelley’s Case may not be quite a foreign consideration. When, indeed, it is once settled that the donor or testator has used words of inheritance according to their legal import; has applied them intentionally to comprise the whole line of heirs to the tenant for life; has really made him the terminus or ancestor, by reference to whom the succession is to be regulated; then, too, it will appear that, being considered according to those views of policy from which it originated, it is perfectly immaterial whether the testator meant to avoid the rule or not, and that to apply it and to declare the words of inheritance to be words of limitation, to be words vesting an inheritance in the tenant for life, and to be words vesting a remainder in fee or in tail in him as the ancestor and terminus to the heirs, is a mere matter of course. * * * On the other hand, if it shall be decided that the testator or donor did not mean, by the words of inheritance after the estate for life, to use such words in their full and proper sense; did not mean to involve the whole line of heirs to the tenant for life, and to include the whole of his inheritable blood ; did not mean to engraft a succession on his preceding estate, and to make him the ancestor of tei-minus for the heirs ; but, instead of this, intended to use the word heirs in a limited, restrictive and untechnical sense; intended to point at such individual person, as should be the heir, or heir of the body, of the tenant for life at the moment of his decease; intended to give a distinct estate of freehold to such single heir, and to make his or her estate of freehold the groundwork for a succession of heirs to constitute him or her the ancestor terminus and stock for the succession to take its course from. In every one of these cases, the premises are wanting upon which only the rule in Shelley’s Case interposes its authority; it is clearly a case in which the remainder to the heirs of the tenant for life having the premises belonging to a purchase, cannot enure by limitation or descent; and thus the rule in Shelley’s Case becomes quite extraneous matter.” Harg. Law Tr. 574, 576.

Mr. Butler, in his note (2 Co. Litt. 376 b), discusses this subject at length. His comment is based largely on the opinion of Mr. Justice Blackstone, in Perrin v. Blake, and the line of reasoning he pursues and the conclusion he adopts are the same as those stated by Mr. Hargrave in the extract above quoted.

Equally explicit is the language of Mr. Hayes. He says:

“The question whether the word ‘heirs’ is used as a word of limitation is to be solved by the ordinary rules of interpretation, without reference to the rule of Shelley’s Case, to which it would be highly impertinent to advert until this question is disposed of. Nor can the application of the rule ever be a matter of doubt when the intention to create the above species of limitation is once fixed.” Hayes JEst. \ 7 XIII.

The great authority of Mr. Fearne must not be overlooked. He says: ’

“Nothing can be better founded than Mr. Hargrave’s doctrine, that the rule in Shelley’s Case is no medium for finding out the intention of the testator; that on the contrary, the rule supposes the intention already discovered * * * yyhioh ought to be adjusted before the rule is thought of — that to resolve that point, the ordinary rules for interpreting the language of wills ought to be resorted to; that when it is once settled that the donor or testator has used words of inheritance, according to their legal import, has applied them -intentionally to comprise the whole line of heirs to the tenant for life, and has really made him the terminus or ancestor, by reference to whom the succession is to be regulated, then comes the proper time to inspect the rule in Shelley’s Case ; that then, too, it will appear that * * * it is perfectly immaterial whether the testator meant to avoid the rule or not; and that to apply it, and declare the words of inheritance to be words of limitation vesting an inheritance in the tenant for life, as the ancestor and terminus of the heirs, is a mere matter of course.” Femme Cont. Rem. 188.

The ruling cases in the English courts are Perrin v. Blake, Harg. Law Tr. 490; Jesson v. Wright, 2 Bligh 1; Roddy v. Fitzgerald, 6 H. L. Cas. 823.

In Perrin v. Blake, Mr. Justice Blackstone divides the rules for ascertaining the intention of a devise into three classes, the first of which consists of rules that are of an essential, •permanent and substantial kind, considered as the indelible landmarks of property, irrevocably established by the well-weighted policy of the law, and which cannot be shaken or disturbed by any whim or caprice of a testator, however fully or emphatically expressed. The other two classes of rules are rules of interpretation or evidence to ascertain the intention of parties, by annexing particular ideas of property to particular modes of expression. These rules, he declares, are of a more flexible nature than those of the preceding kind, and admit of many exceptions. ’ “ For, if the intention of the testator be clearly and manifestly contrary to the legal import of the words which he has thus hastily and inadvisedly made use of, the technical rule of law shall give way to this plain intention of the testator.

* * * But then this intention of the testator, which is to ride over and control the legal operation of his own words, must be manifest and certain and not obscure.” Among the latter class of rules he placed the rule in Shelley’s Case.

The same views are expressed by Lord Eldon and Lord Redesdale in Jesson v. Wright, as will appear by their opinions in the report of the case (at pp. 53, 56). The same remark will apply to the opinion of the judges in Roddy v. Fitzgerald. In the course of his opinion in that case, Lord Cranworth said: “ "Where the testator shows upon the face of his will that he •must have .used technical words in other than their technical1 sense, there is no rule that prevents us from saying that he may be his own interpreter.” The subject is discussed in the same light in Bowen v. Lewis, 9 App. Cas. 890.

In Doe v. Gallini, 5 B. & Ad. 621, Lord Denman states the doctrine in these words: “The more correct mode of stating the rule of construction is that technical words or words of known legal import must have their legal effect, even though the testátor uses inconsistent words, unless those inconsistent words are of such a nature as to make it perfectly clear that the testator did not mean to use the technical words in their proper sense.”' In a later case, Chief-Justice Cockburn, in speaking of the rule-in Shelley’s Case, and the conditions under which it should be-applied, uses this vigorous language: “ When once the donor has used the term heirs/ or heirs of the body/ as following on an estate of freehold, no inference of intention, however irresistible, no declaration of it, however explicit, will have the slightest effect. The fatal words once used, the law fastens upon them and attaches to them its own meaning and effects as to the estate-created by them, and rejects, as inconsistent with the main purpose which it inexorably and despotically fixes on the donor, all! the provisions of the will which would be incompatible with an-estate of inheritance, and which tend to show that no such estate-was intended to be created; although all the while it may be -clear as the sun at noonday that by such a construction the intention of the testator is violated in every particular.” But he -adds: “Although the rule thus established is inflexible to the •extent here stated, there is, nevertheless, one quarter from which it permits light to be let in and effect to be given to the real intention of the testator. This is where, by some explanatory context, having a direct and immediate bearing upon the term ‘ heirs,’ or ‘ heirs of the body,’ the devisor has clearly intended that he has not used these words in their technical, but in their popular sense, namely, that of sons, daughters or children, as the case may be.” Jordan v. Adams, 9 C. B. (N. S.) 483, 499.

This doctrine was recognized by Chief-Justice Whelpley, in Kennedy v. Kennedy, 5 Dutch. 185, 187, in these words: “The rule in Shelley’s Case was adopted, as a rule of interpretation, to give effect to the paramount intent of the testator. The words 4 heirs of the body,’ or heirs,’ will yield to a particular intent, that the estate shall be only for life, and that may be from the effect of the superadded words, or any expressions .showing the particular intent of the testator, but that must be clearly intelligible and unequivocal.”

The rule in Shelley’s Case is a technical rule, and the word heirs” is a technical expression interpreted according to the canons of descent. The word “heirs” undoubtedly indicates ' succession to the estate of the ancestor by those who may be his descendants, but it may be a succession by descent, creating either an estate in fee or in tail in the ancestor, or the selection of those persons who, by the canons of descent, would be heirs, as a mere designatio personarum of the objects of the grantor’s or testator’s bounty, in which event the heir or heirs take by purchase. ■ Whether the word “heirs” is used in its technical sense, or in . the limited, restrictive and untechnical sense, intending to point at such individual person as should be heir, or heir of the body •of the tenant for life, at the moment of his decease, is a matter •of construction. Harg. Law Tr. 576. The solution of the ¡problem whether the word “ heirs ” is used in the one or the other sense, is determined by a construction of the terms of the grant or devise, to ascertain whether the word “ heirs ” is used in the one sense or .the other — in its technical sense, or as a mode of indicating persons; for, as was said by Mr. Hargrave:

“ To insist that men shall only use words in one certain sense would be a monstrous tyranny ; and there is such an infinite variety in the language and circumstances which may occur to distinguish one case from another, that to lay down one general rule of interpretation so absolute as to be indispensable, would be making legal interpretation to torture like the bed of the fabulous Attic robber, ‘ Procrustes,’ and so every instrument would be cruelly stretched or curtailed into the same meaning.” Harg. Lom Tr. 575.

In Perrin v. Blake, Mr. Justice Blackstone said: “The true question of intent [in the construction of an instrument] will turn, not upon the quantity of estate intended to be given to the ancestor, but upon the nature of the estate intended to be given to the heirs of the body; that the ancestor was intended to take an estate for life is certain; that his heirs were intended to take after him is equally certain.; but how those heirs were intended to take, whether as descendants or as purchasers, is the question. If the testator intended they should take as purchasers, then the ancestor remained only as tenant for life; if he meant they should take only by descent, or had formed no intention about the matter, then by operation and consequence of law the inheritance first vested in the ancestor.”

The discussion of this subject has been mainly in the construction of devises, but the doctrine is equally applicable to deeds of conveyance to uses. Sir Molye Finche’s Case, 6 Coke 64, 65 ; Carter v. Ringstead, Cro. Eliz. 208; 4 Cruise 275, 281.; Evans v. Evans, 2 Ch. 173 (1892). In the extract from Mr. Hargrave’s comment, that learned lawyer applies the same rules of construction and interpretation to conveyances to uses as to devises. The cases are collected in 10 Eng. Rul. Cas. 714, 758, note to Jesson v. Wright, and in an elaborate note in 22 Am. & Eng, Encycl. L. 493, 524, tit. “ Shelley’s Case.”

In applying these rules of construction it is fully settled that the fact that the estate of the ancestor is expressly for life only and no longer, or that he shall not sell or dispose of the estate for any longer time than his life, and like expressions, applied to the estate of the tenant for life, will not prevent the application, of the rule in Shelley’s Case. In Lippincott v. Davis, 30 Vr. 241, this court held that the rule in Shelley’s Case applied to a devise of lands to J. G. “ during his natural life, and afterwards to descend unencumbered to his lawful heirs” — the words in italics being equivalent to the words “ none of my children ” (to whom a life estate was given) “ should sell and dispose of my estate for longer time than his life,” which were held in Perrin v. Blake not to operate to exclude the rule in Shelley’s Case* But it is equally well settled that the construction to determine the meaning of the testator or donor in using the word “ heirs” shall be from the entire language of the instrument. In Jordan v. Adams, 6 C. B. (N. S.) 748, 761, the case under consideration, presented the construction of a devise to W. J. for life, and after his decease to the heirs male of his body in such parts as W. J., their father, should, by deed or will, appoint or direct. Chief-Justice Erie, in delivering the opinion of the court, said that the words“ heirs male of his body ” created an estate tail, “ unless the judicial mind sees with reasonable certainty from other parts of the will the testator’s intention that these words should not operate as words of limitation of the inheritance, but should be words of purchase, creating' an estate in remainder in the persons coming within the designation of the words ‘ heirs male of the body/ and also within the further description contained in the will.” He added : “ We proceed, therefore, to examine the other parts of the will, for the purpose of ascertaining the intention, and for this purpose all the parts of the will should be considered together and effect given to every part unless there should be absolute inconsistency. * * * The devise to William is for life, and although this is of no avail where the rule in Shelley’s Case applies, still until it is ascertained that the testator intended by the word ‘heirs’ to pass the inheritance, that rule has no application. Here that intention is the point in dispute, and in weighing both sides, the expression of intention to devise to W. J. for life operates against inferring an intention to give an estate tail.” Nor will an unexecuted power, which if executed would divert the estate from the channel of succession indicated by the words of the grant or devise, of itself supersede the rule in Shelley’s Case; for such a power abstractly considered may or may not indicate the intention of a grantor or devisor to use the word “heirs” or “heirs of the body” in a technical sense. The terms in which such a power is expressed, and the purpose for which the grantor or devisor intended that it should be exercised, are not, however, to be rejected.

The power of sale conferred upon the trustees by Mrs. Mart-ling’s directions was to be a sale, the net proceeds of which the trustees were required to invest upon good and sufficient security, paying her the interest thereon yearly and every year, or to reinvest in real estate, as she might direct; but the proceeds of such a sale, however invested, remained part of the trust estate, to be held upon the trusts declared in the deed. The power to sell and convey is not a power vested in Mrs. Martling during her lifetime to divert the estate from the persons who, in default of her disposition by will, would be entitled to it. The proceeds of the sale of the trust estate invested on security, as well as the lands in which such proceeds might be reinvested, are to be held for the benefit of the heirs-at-law or next of kin in compliance with the terms of the trusts. Doe v. Martin, 4 T. R. 39, 66. The power is, in substance, a power in her by this method to appoint the estate between her heirs and next of kin. A construction which would give to the word “heirs” its strict technical meaning, and vest in Mrs. Martling an estate in fee, would entirely defeat the purpose for which this power was conferred. The estate given to Mrs. Martling is expressly made subject to the limitations thereinafter contained in the deed. The only limitation in the deed to which Mrs. Martling’s estate -can be said to be subject is that if she procures a sale and conveyance of the trust estate, the proceeds. thereof shall remain in trust for the benefit of her heirs-at-law or next of kin in default of her appointment by will, as she may direct the investment to be made. Who shall answer the description of next of kin of Mrs. Martling can be ascertained only at her death, and whether the trust estate or its proceeds shall go to her next of kin or heirs-at-law and in what shares or proportions, will depend on the condition of the trust estate at her death. In the face of ■these contingencies the words “ heirs-at-iaw ” cannot, on any reasonable grounds, receive a construction different from the words “ next of kin,” with respect to tlie point of time when the class of beneficiaries is to.be ascertained. Suppose a sale of part of the premises by the trustees under the power referred to and the proceeds invested simply on good security, would the proceeds so invested go to the next of kin and the remaining lands be vested in Mrs. Martling in fee ? Such a distribution of the trust estate could only be accomplished by mutilation of the trust.

■ Furthermore, the conveyance and the trusts declared were made by a deed; and no rule of law is more firmly established ■than that in deeds conveying to uses the word heirs ” is necessary to pass a fee, and no synonym can supply the omission of the word “heirs.” Melick v. Pidcock, 4 Atl. Rep. 98. In a deed the word “issue” is universally a word of purchase. Price v. Sisson, 2 Beas. 168; S. C., 2 C. E. Gr. 476; Doe v. Cottis, 4 T. R. 299. The words used indicating succession to the estate after the death of Mrs. Martling, and on her failure to devise it, are “ heirs-at-law or next of kin, as may be.” A deed of conveyance to A., habendum to his heirs or next of kin, as a legal conveyance would be an anomaly and could only create an estate for life in A. The illustration is apt. The operation of the rule in Shelley’s Casé, when, in fact, it applies, eliminates all estates and powers intervening between the ancestor’s estate for life and the limitation over. A grant to A. for life, followed by estates less than freehold or unexecuted powers, in default Ac. to his heirs, is, as a legal proposition, read as a grant to A. and his heirs — in this case it would be to A. “ and his heirs-at-law or next of kin, as may be ” — a rendering that demonstrates that the rule in Shelley’s Case caunot, on any principle of construction, be applied to this deed.

Independently of the technical consideration just mentioned, and construing this trust from all the limitations and provisions, contained in it, it is clear that the terms “heirs-at-law” and “ next of kin,” in providing for the ultimate destination of the estate, although the disjunctive “or” intervenes, should receive the same construction as to the point of time when these two classes of beneficiaries respectively are to be ascertained, and that the words “ heirs-at-law,” as well as “ next of kin,” should be construed to mean persons who either as heirs-at-law or next of kin come into existence at Mrs. Martling’s death. But, it is said that, inasmuch as the power of converting the estate into money has not yet been executed, the words “ next of kin ” should be rejected, and by force of the words “heirs-at-law” Mrs. Martling be given a fee in the premises. No case justifying the rejection of words for the purpose of bringing the rule in Shelley’s Case in force has come under my observation. In Jordan v. Adams it was conceded that the words “ heirs of his body” would create a fee tail. The court decided that the subsequent language, providing for a division among heirs of the body by the appointment of their father, reduced the words “ heirs of his body ” to sons and children, and therefore gave only an estate for life. An argument was unsuccessfully made that the words “ heirs of his body ” were of themselves sufficient to create a fee tail, and that inasmuch as' the appointment might be made by the father, who was then living, by deed or will, the clause providing for the division among the heirs-at-law was either unimportant or should be rejected.

On the construction of the entire trusts contained in this deed we think that the persons who are to take in succession as heirs-at-law are to be ascertained as of the time of Mrs. Martling’s death, and that, therefore, those words are not words of limitation within the rule in Shelley’s Case, but a designatio personarwm of those who shall be her heirs at the moment of her decease, and that consequently Mrs. Martling took only an estate for life. The decree of the court of chancery was that the trusts expressed in said deed still existed, and that the lands and real estate held under the trust descended and became vested in Stephen Van Rensselaer Martling, an infant under twenty-one years, as heir at common law of the last surviving trustee, and that the said infant trustee should be removed and a new trustee appointed in his place.

The decree should be affirmed.

For affirmance — The Chief-Justice, Depue, Garrison, Gummere, Ludlow, Mague, Yan Syokel, Barkalow, Bogert, Krueger — 10.

For reversal — None.

Note. — In a recent case in the house of lords the origin and application of the rule in Shelley’s Case were discussed at length. Van Grutten v. Foxwell, L. R., App. Cos. 658 (1897). — Rep.


source: Caselaw Access Project

author: Dixon, J.

license: Public Domain

text:
    Christopher A. Schmidt et ux., appellants, v. Charles Quinzel, respondent.
    1. An auctioneer employed to sell land cannot bind the vendors by a memorandum signed by him some time after the sale and after his authority has been revoked by the vendors to the knowledge of the vendee.
    2. An alteration made by a vendee in a memorandum of sale after it has been signed, by which, if valid, its scope as evidence against the vendors would be enlarged, is a material alteration, and annuls the instrument as a contract and as evidence in favor of the vendee.
    On appeal from a decree in Schmidt et ux. v. Quinzel, advised by Frederic Adams, advisory master.

      Mr. Frank Bradner, for the appellants.

      Mr. Walter M. Lyon, for the respondent.
   The opinion of the court was delivered by

Dixon, J.

The following circumstances may be assumed in this case: That Christopher August Schmidt and Elizabeth, his wife, were the owners of premises No. 191 Magazine street, in the city of Newark; that Mr. Schmidt, with his wife’s assent, authorized Hildebrandt, an auctioneer, to sell the premises at auction, and that on July 24th, 1895, the auctioneer accordingly sold the ■same to Charles Quinzel; that on July 25th, 1895, the auctioneer and Quinzel met in a lawyer’s office and signed a writing, of which the following is a copy:

“ Received at Newark, N. X, July 25, 1895, from Charles Quinzel one hundred dollars as the first payment for purchase of premises known as No. 191 Magazine street, in the city of Newark, N. J., purchased by him from Schmidt, upon the following terms: [terms stated].
“M. Hildebbandt, [e. s.]
“Auctioneer & Agt.
“Chables Quinzee. [e. s.]”

It is also proved that when this writing was signed the auctioneer believed Mr. Schmidt to be the sole owner of the property, regarded himself as the agent of Mr. Schmidt alone, and signed the writing solely on his behalf.

Shortly afterwards, Mr. and Mrs. Schmidt, in the presence of Mr. Quinzel, declared that the auctioneer had violated his instructions as to the price at which he was to sell, and had not made a fair sale, and, on being asked by Quinzel to execute a conveyance, they repudiated the transaction. Thereupon, in August, 1895, Quinzel filed a bill for specific performance against Mr. Schmidt alone, but, subsequently, on his counsel learning that the title was in both husband and wife, that suit was discontinued.

In November, 1895, Quinzel and the auctioneer met in the office of Quinzel’s attorney, and then the attorney wrote in the blank which had been left in.the body of the instrument, before the word Schmidt,” the words “ Christopher and Elizabeth,” and the auctioneer, at the instance of the attorney, wrote at the foot of the instrument, immediately above his own signature, the words “ Christopher August and Elizabeth Schmidt.” That being done, the present bill was filed against Mr. and Mrs. Schmidt for specific performance.

The defendants’ answer having denied the existence of a contract, it devolved upon the complainant to establish its existence by some memorandum or note thereof, in writing, signed by the defendants or some other person by them thereunto lawfully authorized, as required by section 5 of our statute of frauds. Gen. Sta.t. p. 1602.

Conceding that the auctioneer was at one time the agent of the defendants to sign such a memorandum or note, and that his authority to sign for them, the vendors, was not confined to the time of sale, yet it is indisputable on the facts stated that, before the making of this present writing in November, his authority had been actually revoked by the defendants, and the fact of revocation had been made known to the complainant. The agency had therefore wholly ceased. Browne St. Fr. § 353 ; 3 Am. & Eng. Encycl. L. (2d ed.) 491; Williams v. Evans, L. R. 1 Q. B. 352.

We must therefore recur to the instrument as originally signed to consider whether that is legitimate evidence of a contract such as the complainant seeks to have enforced.

When that writing was signed the auctioneer intended to act as the agent of Mr. Schmidt alone, and to bind only him. Whether, in view of this fact, parol evidence would have been competent to show that Mrs. Schmidt also had concurred in authorizing him to act as auctioneer, and so to charge her in a transaction by which the agent had not intended to bind her, and had intended to bind, and had had authority to bind, a different principal, is a question which admits of some doubt. Rut, supposing such proof might have been received to supplement the writing, the alteration made in the instrument by the complainant’s agent and at his request, in November, was certainly a material one. When signed, the writing did not indicate that Mrs. Schmidt was to be bound by it as a vendor, nor did the auctioneer then intend that the blank left in it should be so filled as to afford such an indication. Rut when the names of both defendants had been inserted in the blank and affixed at the foot, the writing became, if valid, the complete memorandum, under the statute of frauds, to establish the fact that they both were vendors. The alteration considerably enlarged the scope of the instrument as a means of evidence, and therefore was a material one. Having been made by the other party, the complainant, it annulled the instrument as a contract, or as evidence of a contract, in his favor. Hunt v. Gray, 6 Vr. 227; Jones v. Crowley, 28 Vr. 222.

Our conclusion is that neither the writing made in July nor that made in November furnishes such evidence of the agreement as the statute of frauds requires.

In the foregoing, it may seem to have been assumed that, if the contract had been duly proved, it would have been enforced against the estate of the married woman. But it is not the design of the court even to suggest any opinion on the question whether, when the obligation of a married woman to convey her lands arises merely out of her contract, a court of equity will compel her to perform it.

The decree in favor of the complainant should' be reversed and his bill dismissed.

For reversal — Collins, Depue, Dixon, Garrison, Gum-mere, Lippincott, Ludlow, Van Syckel, Bogert, Hendrickson, Nixon — 11.

For affirmance — None.


author: Gummere, J.

text:
    Robert A. Stewart, appellant, v. The Exchange Bank of Mannington et al., respondents.
    A deed, which, wheni dram, was intended by the grantor to operate to put his property out of the reach of his creditors, will not be set aside as fraudulent if it appears that, at the time of its delivery and acceptance by the grantee, the sole object of both the parties to the instrument was that it should be held by the grantee as a security for the payment of a debt due from the grantor to' a third person.
    On appeal from a decree in Exchange Bank of Mannington v. Baker, advised by Vice-Chancellor Bird.

      Mr. Carroll Bobbins and Mr. Samuel S. Mehard, for the appellant.

      Mr. Henry S. Alvord, for the respondents.
   The opinion of the court was delivered by

Gummere, J.

The bill in this case was filed by the Exchange Bank of Mannington and others, creditors of one Horace D. Baker, for the purpose of having declared fraudulent, as against creditors, a certain deed made by Baker to the appellant, Robert A. Stewart, for lands in Cumberland county.- On the final hearing of the cause a decree was made setting aside and annulling said deed, on the ground that it had been made and executed with intent to defraud the creditors of Baker, and particularly with intent to defraud the complainants.

In our opinion the testimony in the case does not justify the conclusion reached by the vice-chancellor. Shortly before the execution and delivery of the deed, and on the 19th day of February, 1894, Baker deposited with the Norfolk State Bank of Norfolk, Nebraska, a draft on a New York bank for $3,401.29. Stewart, who was his brother-in-law, was the cashier of the Norfolk bank, and permitted him to draw against the deposit to the extent of $1,700, without first ascertaining whether the deposited draft was good. It turned out to be a forgery, and the Norfolk bank lost the money which it had paid out against the deposit. Shortly after this loss was incurred, Baker sent to the bank the joint note of himself and wife, for $1,700, dated February 26th, 1894, to cover the amount which he had drawn against the forged draft. On the 23d day of February, 1894, the deed under consideration was executed by Baker and his wife, and, on the same day, was sent to the office of the clerk of Cumberland county -for record. A few days prior to this, however, and before it was known by Stewart that the draft deposited in the Norfolk bank was a forgery, Baker had informed him that he contemplated transferring to his wife the property which is embraced in the deed, and requested him to act as the conduit in'the transfer. On the day after the execution of the deed, though, Baker wrote to Stewart instructing him to hold the deed as security for the payment of the $1,700 note, given by the former and his wife to the Norfolk bank, as already stated; and Stewart, when he subsequently received the deed (which was forwarded to him by mail after its record), placed it in the “collateral case” of the bank as such security.

Some mouths after the delivery of the deed Stewart, apparently at the request of the Norfolk bank, personally guaranteed the payment of the Baker note, and he claims by his answer to hold the deed as trustee to secure the bank against loss on the note, and also for the purpose of protecting himself on his guaranty.

So far as his claim to hold the deed as trustee for the bank is concerned, we think it is fully supported by the evidence. Admitting that the testimony warrants the conclusion that, at the time the- deed was drawn the purpose of Baker was to put the property conveyed thereby in his wife, using Stewart as a conduit, it is manifest that, at the time of its delivery and acceptance, this purpose had been abandoned, and that the sole object for which the deed was delivered by Baker and accepted by Stewart was to secure the Norfolk bank against loss on the .payments which it had made.

The deed, although made to Stewart personally, is, in .reality, held by him as trustee for the bank, and, although an absolute conveyance on its face, is, in equity, a mortgage securing the payment of the indebtedness of Baker to the bank. Whether Stewart would be entitled to be subrogated to the rights of the bank, in case he should pay the amount due on the note in discharge of his guaranty, and hold the deed as security for the repayment of the amount, it is not necessary now to decide. That condition of affairs has not yet arisen, and it is quite possible that he may never be called upon to make good his guaranty.

The decree below should be reversed and a decree entered dismissing the bill of complaint, with costs.

For reversal — Dixon, Garrison, Gummere, Lipjpincott, Mague, Bogert, Dayton — 7.

For affirmance — Van Syckel, Barkalow, Hendrickson, Krueger, Nixon — 5.


text:
    Seth L. Jenkins et al., appellants, v. The Guarantee Trust and Safe Deposit Company, trustees &c. et al., respondents.
    1. An appeal will not be entertained from a decree of tlie court of chancery, made in accordance with instructions contained in a remittitur from this court.
    2. If such decree is erroneous, the party injured thereby'suffers by reason of the mistaken conclusion reached by this court, and his remedy is by petition for a rehearing of the original appeal. ■ •
    On appeal from a decree ia, Guarantee Trust and Safe Deposit • Co. v. Maxwell, dated January 13th, 1896, advised by Vice-Chancellor Pitney.

      Mr. Edward Dudley, Mr. William H. Burnett and Mr. John Sparhawk, Jr. (of the Philadelphia bar), for the appellants. '

      Mr. Samuel H. Grey, for the respondents*
   The opinion of the court was delivered by-

Gummere, J.

This is an appeal from a decree of the Court of chancery upon a remittitur from this court. The bill was filed by the Guarantee Trust and Safe Deposit Company, executors of and trustees • under the will of' Margaret K. Maxwell (who, at the time of her death, was a resident of and domiciled in the State of Pennsylvania), for the purpose of ascertaining, by judicial decision, whether or not a legacy of $5,000, given by the will to the Presbyterian Hospital, of .Philadelphia, and directed thereby to be paid out of the proceeds of the sale'of certain lands in New Jersey, was a valid bequest. The court of chancery having determined, by its decree, that the bequest was valid, an appeal was taken from that decree. This court, on the hearing of the appeal, reached the conclusion that the validity of the bequest was to be determined by the laws of Pennsylvania; and that, as the testatrix had died less than thirty days after the execution of her will, the bequest was void by virtue of the provision of the Pennsylvania statute of mortmain, and that it must, consequently, fall into the residuary estate of the testatrix and be distributed therewith. Jenkins v. Guarantee Trust &c. Co., 8 Dick. Ch. Rep. 194. The record in the case was thereupon remitted to the court of chancery, with an order that a decree be there entered in accordance with the conclusions reached by this court. In pursuance of the mandate of the remittitur, the court of chancery made the following decree: “And it is further ordered, adjudged and decreed that the legacy of $5,000, to the Presbyterian Hospital, contained in the will of Margaret K. Maxwell, declared to be void by the court of errors and appeals in this cause, be for nothing liolden and shall fall into the residuary estate of the said Margaret K. Maxwell, and be distributed therewith.’’ Prom this decree the present appeal is taken.

It will be perceived that the decree now appealed from was entered in exact compliance with the instruction of this court; and that, in order to sustain the appeal, we must declare that it was error in the court below not to have disregarded that instruction. Such a proposition carries with it its own refutation. If the decree now before us wrongly determines the rights of the parties, it is because of the erroneous conclusion reached by this court, and our instruction to the court of chancery based thereon. For such an error this court alone is responsible, and alone can correct it. And the only method by which relief from such an error can be obtained is by petition to this court for a rehearing. To say that a decree of the court of chancery, entered in conformity to the mandate of this court, can be reversed on appeal, is tantamount to saying that that court is at liberty to set at naught our instructions, and to make a decree in accordance with its own views, whenever it is convinced that the conclusions reached by us are erroneous.

The appeal should be dismissed, with costs.

For dismissal — The Chief-Justice, Collins, Depue,. Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Adams, Rogert, Hendrickson, Nixon — 13.

Contra — None.


text:
    The Consolidated Coal Company et al., appellants, v. The National State Bank, respondent.
    1. Whether or not the holder of a confessed judgment is barred by the eightieth section of the Corporation act from obtaining a preference over the other creditors of an insolvent corporation depends not upon the intention with which the bond and warrant of attorney were given, but upon the intention with which the judgment itself was confessed. If the object to be attained in confessing the judgment was to give the holder thereof a priority over other creditors, the consequences provided by the act necessarily follow» notwithstanding the fact that, at the time of the execution of the bond and warrant of attorney, no intention to prefer existed.
    2. Where a creditor who files a bill to obtain a decree of insolvency and the appointment of a receiver against a bankrupt corporation desires to attack the validity of the claim of a co-ereditor, he should do so upon proceedings had before the receiver on the question of the distribution of assets. It is-improper practice to make such attack by the bill of complaint.
    On appeal from a decree advised by Vice-Chancellor Reed, in* Consolidated Coal Co. v. Keystone Chemical Co. et al.

      Mr. Norman Grey and Mr. Herbert A. Drake, for the appellants.

      Mr. Israel Roberts and Mr. Mark R. Sooy, for the respondent»
   The opinion of the court was delivered by

Gummere, J.

The bill in this case was filed by the appellant, the Consolidated Coal Company, on behalf of itself and such other creditors of the Keystone Chemical Company as should come in and join in the prosecution of the suit, for the purpose of obtaining-a decree of insolvency against the latter company and the-appointment of a receiver. A decree was also sought against, the respondent, the National State Bank of Camden, a judgment creditor of the chemical company, declaring that the judgment which it held was confessed for the purpose of giving it a preference over the other creditors of the chemical company, and that it was, for that reason, only entitled to share proportionately with such other creditors in the distribution of the company’s assets, by virtue of the provision of the eightieth section of the Corporation act. Gen. Stat. p. 923. The provision of the section appealed to is that, in the distribution of the funds-of an insolvent corporation, “ the creditors shall be paid proportionally to the amount of their respective debts, excepting mortgage and judgment creditors when the judgment has not been by confession for the purpose of preferring creditors.”

A decree of insolvency was made and a receiver appointed,, pursuant to the prayer of the bill. Subsequently, the respondent, the National State Bank of Camden, filed its answer denying that the judgment held by it was confessed for the purpose-of preferring it to the other creditors of the chemical company, and the court of chancery, on final hearing, sustained this claim and decreed that the bank’s judgment should be first paid out of the chemical company’s assets. From that decree this appeal is taken.

The material facts relating to the confession of the bank’s-judgment are as follows: On the 20th of November, 1893, the-chemical company borrowed of the bank the sum of $25,000,. and, as evidence of the loan, made and delivered to it a promissory note for that amount, payable in three months. This note was renewed from time to time as it fell due, the last renewal being made on January 13th, 1896, and being for two months. On-the 15th of January, 1894, the chemical company obtained a fur'ther loan from the bank of $2,500, and, as evidence thereof, made and delivered to the bank its promissory note for that amount, payable on demand. In the month or September, 1895, the president of the chemical company applied to the bank for a further loan of $10,000. The bank agreed to make the loan provided the company would execute and deliver to it a bond, with a warrant of attorney to confess judgment thereto annexed, as security for the entire indebtedness owing by the company to the bank; that is to say, the $27,500, previously loaned, as well as the $10,000 about to be advanced. The company consented to this proposition, and, on September 27th, 1895, executed and •delivered to the bank the bond and warrant of attorney upon which the contested judgment was subsequently entered, at the same time receiving from the bank the additional loan of $10,000, for which it gave to the bank its two promissory notes of $5,000 each, one dated September 23d, 1895, and the other dated the 27th of the same month, and each being payable four months after date. Both of these notes were subsequently renewed, at maturity, for an additional period of four months.

On the 26th day of February, 1896, the company, being then •on the very verge of insolvency, if, indeed, it was not already insolvent, the renewal note of January 13th, 1896, for $25,000, which did not fall due until March 13th of that year, the demand note of $2,500, made on January 15th, 1894, and the two notes of $5,000 each, which did not mature until May 23d and May 27th, 1896, respectively, were canceled by the bank and surrendered to the company, the latter at the same time giving to the bank a demand note for $37,500 in their stead. On the same day the company confessed the judgment which is the subject of attack in this suit.

In addition to the proof of these facts, there was evidence produced from which the court below found that, at the time of the making of the $10,000 loan and the giving of the bond and warrant of attorney, neither the chemical company nor the bank •supposed that the former would be compelled to cease business •on account of financial embarrassment, but rather that this additional loan would tide it over its troubles and enable it to con■tinue its business; and it was because of the existence of this belief, both on the part of the debtor and the creditor, that the •court of chancery considered that the judgment was not confessed for the purpose of giving a preference.

The conclusion thus reached would seem to be based upon the idea that the execution of a bond and warrant of attorney to confess judgment, and the actual confession of a judgment thereon, are one and the same thing, for on no other theory can the intention with which the former were executed be held to be conclusive of the purpose with which the judgment was confessed. But this idea is palpably erroneous. The execution and delivery of a bond and warrant of attorney by a debtor to his creditor merely puts the latter in a position where he may, if he desires, obtain a judgment against the former, a position which the creditor not infrequently fails to take advantage of. Nor is the intention with which the bond and warrant are given 'necessarily the intention with which the judgment is confessed. When a creditor takes a bond and warrant of attorney as security for a debt due from an entirely solvent debtor, but refrains from having a judgment confessed thereon, it can readily be ■conceived that he has not taken his security for the purpose of obtaining a preference over other creditors; but if his debtor subsequently becomes insolvent and, as soon as that fact comes to his knowledge, he procures an attorney to represent his debtor and confess a judgment on the bond, no one would doubt for a moment that his object in doing so was entirely different from that which originally caused him to take the bond and warrant, and that he procured the judgment to be confessed solely for the purpose of obtaining a priority over other creditors.

And this was the situation of the respondent in this case. Conceding that the proofs justify the conclusion that, at the time of the making of the bond and warrant neither of the parties thereto had any thought of preferring the respondent, it is manifest that the purpose, both of the bank and the chemical company, at the time the judgment was confessed, was thereby to give the former a preference over the other creditors of the latter. No other reasonable explanation can be found of the surrender, on the very day the judgment was entered, of the unmatured,: notes of the company and the substitution of the demand note in their place. The object sought to be accomplished by making . the whole amount of the company’s indebtedness immediately due and payable was, indubitably, to put the bank in a position where it could safely enter up its judgment forthwith.

The statute deals with the intention with which the judgment-is confessed, not with the purpose for which the bond and warrant are given, and if it appears that the object sought to be-accomplished by the confession of the judgment was to enable-the plaintiff therein to thereby obtain a preference over other-creditors, proof that such intent did not exist at the time of the-making of the bond and warrant will not operate to relieve from the consequences imposed by the statute.

Whether the same result would follow if the creditor alone,, or the debtor alone, should seek by the confession of a judgment to create a preference, it is not necessary now to decide. In the-present case both the creditor and the debtor united in the purpose to give the former a preference over the other creditors of the latter by the confession of the judgment, and their joint-action clearly brings the case within the statute. The judgment-of the respondent should, therefore, be paid proportionally with the other debts of the chemical company.

Before leaving the case we deem it proper to state that, in-our opinion, the question of the position which the respondent’s-judgment is entitled to occupy in the distribution of the assets of the chemical company, has been brought before the court in an entirely irregular way. An attack by one of the creditors of a corporation on the validity of a claim held by another, has no place in a bill filed in behalf of all the creditors for a decree of insolvency and the appointment of a receiver. All such-questions should be raised after the decree of insolvency is pronounced, in proceedings had before the receiver on the question, of the distribution of assets. But as the party whose judgment, has been attacked has been heard in defence of its claim to have it declared a preferred debt, and as the conclusion reached by us is in the interest of those creditors who have not been afforded a. hearing in the matter, no rights can be injuriously affected by the irregularity of the proceeding. We have therefore considered and decided the question presented without regard to the •course of procedure which has been adopted by the complainant. The decree appealed from should be reversed, with costs.

For reversal — The Chief-Justice, Collins, Depue, Dixon, Garrison, Gummere, Lippincott, Van Syokel, Adams, Bogert, Hendrickson, Nixon — 12.

For affirmance — Ludlow—1.


author: Nixon, J.

text:
    James M. Cummings et al., appellants, v. James Jackson et al., respondents.
    1. A contract in writing to secure a debt which is duly specified therein, in which the parties expressly declare their intention to create a lien by way of mortgage upon certain real estate particularly mentioned and described in the writing, upon the failure of certain conditions fully set forth in the contract, is an equitable mortgage, and upon non-payment and breach of the conditions may be foreclosed in the ordinary way in a court of equity, and the interest of the mortgagors in the lands so pledged sold to satisfy the debt.
    2. When an agreement has been made that a mortgage shall be subject and ■subordinate to a subsequent lease of the same lands, provided and so long as ■certain payments mentioned in the agreement are made on the mortgage, a failure to make such payments will, ipso facto, restore the priority of the mort•gage.
    3. When a purchaser of lands assumes the payment of a mortgage thereon, •and deducts the amount of the same from the consideration paid, he is precluded from assailing the validity of the mortgage assumed, or denying that the amount assumed by him and withheld from the purchase-money is a good and subsisting lien upon the lands.
    On appeal from a decree in Jachson v. Cummings, advised by Washington B. Williams, advisory master.

      Messrs. Diekinson, Thompson & McMaster, for the appellants-

      Mr. William I. Lems, for the respondents.
   The opinion of the court was delivered by

Nixon, J.

The controversy in the case under review grows out of the-foreclosure of an instrument in writing, made on the 14th day of August, 1882, between Sylvanus D. Brown and Mary Brown, his wife, and James Jackson, the respondent, in order to secure-to Jackson the payment of $1,900 on the 1st day of August, 1883, and not sooner unless the parties should elect to sooner repay the same, which writing was duly acknowledged and recorded. For the payment of this sum the said instrument pledged nineteen shares of stock in the Layton Iron Company, the rents,, royalties and profits and increase derived by Mary Brown by virtue of certain leases of mining properties, known as the Pellington mine and the Brown mine, then held under leases by theMidvale Ore Company; the right, title and interest of Sylvanus D. Brown in a certain agreement then made and afterwards to be-formally executed with one John Huyler, and finally stipulated, and provided:

That in case the Midvale Ore Company should surrender up the aforesaid lease of the said Brown mine or either portion thereof, or the same should, become forfeited in any manner, the said instrument providing both for surrender and forfeiture, then the transfer, assignment and conveyance herein-before made of the rents, royalties, profits &c. arising out of said lease, as-collateral security for the debt hereinbefore mentioned, shall be deemed to-operate upon the real estate composing the said tract known as the Brown mine, and being the subject-matter of the said lease, and this conveyance shall be held and construed to be a lien by way of mortgage upon the said real estate, as and for the said collateral security, subject to all the conditions and limitations herein contained, in so far as they may be applicable, the said two parcels of real estate being particularly bounded and described as follows, viz., [description of lands.]”

No note or bond was given with this instrument.

On March 12th, 1886, Sylvanus D. Brown and Mary Brown, his wife, executed a mortgage on the same premises in question and other property to James Jackson, Charles Dupont Breck and George Eisher, to secure the payment of $10,000, which was afterwards assigned to Breck in trust for himself, Jackson and Eisher. On March 14th, 1891, Mary Brown and her husband made a lease of all the iron ores and metals and mineral substances in or upon the lands in question to A. G. N. Vermilya, reserving an annual rent therefor of $2,500, and providing for the forfeiture and making void of said lease on the failure to pay said rent. On the same day it was mutually agreed by the Browns, Vermilya, Jackson and Breck, that the rent reserved in said lease should be paid to Jackson until the “ mortgages ” given by the Browns to Jackson, and to Jackson, Breck and Fisher, should be paid, and that the mortgages should be subordinate to the lease to Vermilya “so long as the conditions and covenants of said conveyances are kept and performed by said Vermilya, his heirs, assigns or legal representatives.”

On March 17th, 1891, Vermilya and wife executed a mortgage of his interest in all the ores, metals and mineral substances in or upon the lands in question to James M. Cummings, to secure the sum of $25,000, and on March 24th, 1891, Vermilya conveyed all his interest under the Brown lease to the Midvale Mining Company, subject to the conditions and reservations of rent contained in the lease from the Browns. On November 14th, 1893, Mary Brown and her husband conveyed all their right, title and interest in the Brown mine lands to James M. Cummings, Laura M. Rosevelt and Ira D. Cummings,, the appellants.

The bill to foreclose the aforesaid instrument was filed August 8th, 1894, and all the parties interested were made defendants, and the case was heard upon the bill, the answer and cross-bill of the appellants, and the answer and cross-bill of the Midvale Mining Company, and the respective answers of Breck and Mary Brown, and the proofs, the bill having been taken as confessed against the other defendants.

The chancellor decreed that the instrument set forth in the bill of complaint is a valid and subsisting encumbrance and lien by way of mortgage upon the estate, rights and appurtenances therein described against all the defendants, and that there was due, on the date of the decree, to the complainant James Jackson $3,534 for principal and interest; that the mortgage executed by Mary Brown and her husband, to James Jackson, Charles Dupont Breck and George Fisher, to secure the payment of $10,000, is also a valid and subsisting lien upon the estate, ores, mining rights &c., and that the sum of $8,738.25 found due thereon is entitled to be secondly paid; that' the mortgage of Allen G. N. Vermilya and wife to James M. Cummings, on which the sum of $33,617.90 was due, is entitled to be thirdly paid; that all the estate, rights, title and interest which the said Mary Brown and Sylvanus D. Brown mortgaged to the said James Jackson by the said instrument bearing date of the 14th day of August, 1882, in the tracts of land described therein, be sold to raise and satisfy the several sums of money due,” and that the said defendants and each of them stand absolutely barred and foreclosed of and from any equity of redemption in the said mortgaged premises, to wit, of, in and to “ all the estate, .ores, mining rights, title and interest which the said Mary Brown .and Sylvanus D. Brown, her husband, mortgaged to the said James Jackson by said instrument bearing date August 14th, 1882, when sold as aforesaid by virtue of this decree.” The foregoing are the only parts of the decree pertinent to the questions raised by the appeal.

From each and every part of this decree, three of the defendants (the appellants) appealed, upon the following grounds— jfirst, that the instrument bearing date. August 14th, 1882, is not a mortgage, and does not contain words and language sufficient ¡to convey an interest in real estate; second, that if held to be a mortgage upon real estate, that it conveyed only an estate for the life of the mortgagors and did not convey a.fee therein; third, that if there was anything due under that instrument which «could be held to be a lien upon the land, it was a much smaller amount than that named in the decree, and that some of the money paid to Jackson should have been credited on that instrument ; fourth, that if the instrument is not a mortgage of real -estate, no interest in the lands described can be sold under it; fifth, that if the instrument is not a mortgage, then no decree -can be made in this case establishing the amount due upon any •other lien on the premises, and sixth, that no counsel fee or costs for searches should have been allowed.

It will be perceived that the primary question raised by the appeal is whether the instrument foreclosed is a valid and subsisting encumbrance and lien by way of mortgage upon the real estate, rights and appurtenances described therein, and the answer to it will, at the same time, dispose of the fourth and fifth grounds of appeal.

. Counsel for the appellants have founded their argument that the instrument upon which this suit was brought is not a mortgage, and does not contain words sufficient to create a lien upon real estate, upon the common-law definition and construction of a mortgage formerly held in England and in some of the earlier decisions in this state. But the later and now almost universally-accepted definition of a mortgage was given by Mr. Justice Depue, in the case of Woodside v. Adams, 11 Vr. 417, 422, where the learned judge said: “It may now be considered the established doctrine of the courts of this state that a mortgage of lands is not á common-law conveyance with a condition, but a mere security for the mortgage debt, the legal estate being considered subsisting in the mortgagee only for that purpose.” Mr. Justice Story, in Flagg v. Mann, 2 Sumn. 486, 533, said: “If a transaction resolves itself into a security, whatever may be its form and whatever name the parties may choose to give it, it is, in equity, a mortgage.”

Another distinction in mortgages should not be overlooked. We refer to.that class called equitable mortgages. Jones Mort. (4th ed.) § 163, says:

“ It has been noticed that a conveyance accompanied by a condition contained either in the deed itself, or in the separate instrument executed at the ■same time, constitutes a legal mortgage at common law. In addition to these -former instruments, which are properly entitled to the designation of mortgages, deeds and contracts, which are wanting in one or both of these char acteristics of a common-law mortgage, are often used by parties for the purpose of pledging real property or some interest in it as security for a debt or obligation, and with the intention that they shall have effect as mortgages. Equity comes to the aid of parties in such cases and gives effect to their intentions. Mortgages of this kind are called equitable mortgages. There are many kinds of equitable mortgages, as many as there are varieties of ways in which parties may contract for security by pledging some interest in lands. Whatever the form of the contract may be, if it is intended thereby to create a security, it is an equitable mortgage.”

This definition is peculiarly apt when applied to the instrument upon which this suit was founded. It was a writing expressly designed by the parties making it to secure a debt by pledging real property in the event that other anticipated sources of revenue mentioned therein failed of realization, and the two tracts of- real estate upon which, in the language of the instrument, “ this conveyance shall be held and construed as a lien by way of mortgage,” are specifically designated and described therein at length by metes and bounds. There is no ambiguity in the phraseology of the instrument from beginning to end. It specifies the debt it is intended to secure, and that its purpose is to create a lien by way of mortgage is clearly expressed, and the lands upon which it is to take effect are particularly described. No requisite of an equitable mortgage is lacking.

We do not find in the record any issue framed by the pleadings or raised by the proofs to which the second ground of appeal is applicable, and its discussion is, therefore, not necessary to the disposition of the case.

The validity of this instrument as an equitable mortgage being sustained, the next question is whether the conditions upon which the debt secured by it was made payable have been fulfilled by the grantors, and whether payment or satisfaction, in whole or in part, has been obtained in some other way.

It clearly appears by the proofs that nothing was realized from the other securities mentioned in the instrument. The nineteen shares of the Layton Mine Company became worthless, and the property of the company was sold and the stockholders lost all. The proposed agreement with John Huyler was never consummated, and the complainant received nothing from the Pellington mine, and the lease became forfeited, and in 1888 the leases of the Brown mine were also forfeited to Mrs. Brown, and thus all the conditions existed under which this instrument was intended to operate as a lien by way of mortgage upon the real estate described therein.

The agreement made by the complainant and Breck with Vermilya that his lease should be paramount to the mortgage of the complainant and the Breck mortgage, was only

“provided and so long as the rents or royalties are paid, as provided in said lease, by said Allen G. N. Vermilya aforesaid, and in said agreement of even date, made between said Mary Brown and Sylvanus D. Brown, her husband, said Allen G. N. Vermilya and the undersigned [Jackson and Breck].”

It was not contended or proved that these rents or- royalties have been paid as stipulated in the said lease and agreement, and therefore they cannot operate as an impediment to the foreclosure of the complainant’s mortgage or affect its priority.

The third ground of appeal is that a less amount is due upon the mortgage than that found by the court. This contention is based upon an alleged misapplication of the payments made to the complainant, Jackson. There is no dispute as to the amount paid, and no claim is made that the full amount has not been credited in the schedule of account annexed to the chancellor’s decree and forming part thereof. The payments were all made to James Jackson, the complainant, in pursuance of the provisions of the agreement dated March 14th, 1891, between the Browns, Vermilya, the complainant and Breck. There were two mortgages recognized in the agreement, one to the complainant for $1,900, and one to the complainant, Breck and Fisher for $10,000, and the payments were to be applied to these until they should be paid and satisfied, but nothing whatever was said in the writing as to which should be paid first. They.were all applied to the second mortgage by Jackson. Both Jackson and Breck testify that it was mutually agreed between the Browns and themselves that these rents and royalties should all be applied to the payment of the second mortgage of $10,000. This evidence is given further weight by the fact that while the payments were largely in excess of the amount sufficient to pay the first mortgage, yet no request or demand for its surrender .and cancellation was ever made. It does not, therefore, appear that the application of these payments to the reduction of the second mortgage was contrary to the mutual understanding of the parties interested. But, in the absence of any such agreement, there being no proof or contention that any directions were given as to how the money should be applied, the payee, Jackson, had the right to apply it to either of the two mortgages as he might see fit. Bird v. Davis, 1 McCart. 467.

It. further appears that the appellants were not ignorant of the fact that all of these payments had been applied on the second mortgage. When, on the 14th of November, 1893, the ■deed for part of the lands described in the complainant’s mortgage was executed by Mary Brown and her husband to the .■appellants, a complete schedule of the amounts due upon each of the mortgages was made out, and upon it all the several payments and their application to the reduction of the second mortgage are set forth, and it forms one of the exhibits in the case. No question was made at that time about the correctness of this statement, and it corresponds in all material respects with the schedule which accompanies and forms a part of the chancellor’s •decree, excepting, on account of dates, the differences in the .amount of accrued interest, and a mistake in stating the amount of complainant’s mortgage to be $2,000 instead of $1,900, as in the decree, which inures to the benefit of the appellants.

In this deed from the Browns to the appellants, the following words appear:

“Subject, nevertheless, to two several mortgages, now good and valid liens ■upon the above-described premises, the first of said mortgages being made and ■executed by the parties hereto of the first part to James Jackson, to secure •the payment of two thousand ($1,900.00) dollars and interest, dated August 14,1882, and recorded in Passaic county clerk’s office on same day, in Book S 2 of Mortgages, page 197, and the other of said mortgages being made and ■executed by said parties hereto of the first part, to James Jackson and others, ■to secure the payment of ten thousand dollars and interest, dated March 12th, 1886, and recorded in said county clerk’s office, on Mar. 12th, 1886, in Book B 3 of Mortgages, page 395, the aggregate amount of principal and interest ■due and unpaid on said mortgages at this date being nine thousand six hundred and eighty-three dollars and seventy-four cents, which the said parties of the second part hereby assume, and agree to pay, as recorded, together with-the interest to grow due thereon, as part of the consideration hereinabove expressed, hereby binding themselves, their legal representatives and assigns-therefor.”

Holding the above words to mean what they clearly import, would, of course, prevent the appellants from assailing the validity of the complainant’s mortgage or denying that it was at the time of the purchase a lien upon the land, the amount due thereon having been deducted from the consideration paid, and* the mortgage designated in their deed as a good and valid lien upon the premises. From these disabilities the appellants endeavor to escape by insisting that the words as recorded,” in-the assumption clause of the deed, relate to certain conditions in-the mortgage, and in the lease between the Browns and Vermilya. We cannot see any force in the contention made or any special significance in those words as used in the deed. They may be viewed as merely referring to the fact that the mortgages-were of record. They are in that sense superfluous, but unnecessary words may be found in almost every written instrument.But granting that the words relate to conditions in the complainant’s mortgage, or in the lease of the Brown mine to Vermilya, it cannot alter the situation. We have already stated' that those conditions were not fulfilled. That the Midvale Ore-Company’s lease became forfeited is not open to doubt, and whether by voluntary surrender, or by dispossession proceedings,, as Jackson testifies, is not material, as the instrument provided that if it should become forfeited in any manner the lien upon the lands should attach. The agreement to subordinate the mortgages of the complainant and that of Breck to the lease made to Vermilya was only so long as the rents or royalties were kept paid. These payments ceased in 1893, almost a year before the foreclosure proceedings were commenced. We find nothing to impair the legal effect of the assumption clause in the deed to the-appellants.

The matters referred to in the sixth ground of appeal rested wholly in the discretion of the court.

The decree should be affirmed.

For affirmance — The Chief-Justice, Collins, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Yan Syckel, Adams, Bogert, Hendrickson, Nixon — 13.

For reversal — None.