author: Garrison, V. C.

text:
    John Vanderbilt v. Henry Mitchell, medical superintendent, et al.
    [Decided May 17th, 1906.]
    1. Q-en. Stat. p. WOO makes it the duty of the physician in attendance at the birth of any child, or, in case there be no physician, then of the parents, to transmit to the registrar of vital statistics a birth certificate, setting forth the names of the parents, &c., and it is made the duty of the medical superintendent to index such certificates, and they are made evidence of the facts therein stated. A certificate was signed by a physician, and subsequently the one whose name was given as father of the infant filed a bill seeking to cancel the certificate, and charging that the mother of the child had caused the certificate to be filed.—Held, that the demurrer did not admit such allegation as to the mother.

      2. A certificate was signed by a physician, and in a bill against the medical superintendent, complainant’s wife and the infant born of the wife during wedlock, complainant alleged that the infant was not complainant’s child, as shown by the certificate, and he prayed an injunction against the medical superintendent restraining him from issuing certified copies of the certificate, and for a decree declaring that complainant was not the infant’s father, and that the record of the birth and certificate, if not entirely set aside, might be amended by striking out complainant’s name as the father, and that the mother and child be enjoined from offering in evidence the certificate of birth, or any copy ’thereof, or representing such infant as the child of complainant.—Held, that the bill was not within the jurisdiction of equity.
    On demurrer to bill.
    This is a bill filed by John Vanderbilt against Henry Mitchell, medical superintendent; Myra L. J. Vanderbilt tod William Godfrey Vanderbilt.
    The bill charges that John Vanderbilt is the husband of Myra L. J. Vanderbilt, and that they are each residents of the State of New Jersey, in which state they were married on the 7th of February, 1901; that from September, 1901, to July, 1903, the wife of the complainant and one Santy lived together in adultery at Sound Beach, in the State of Connecticut, and that during that time complainant did not have matrimonial access to his wife;' that as the result of the adulterous intercourse of the complainant’s wife with said Santy a male child was born to complainant’s wife in the State of New Jersey on or about the 20th day of October, 1903, and by her was named William Godfrey Vanderbilt; that complainant is not the father of said child; that complainant’s wife did cause to be filed with the bureau of vital statistics of the State of New Jersey at Trenton a certificate of birth of said child, the material parts of which certificate are as follows:
    1. Full name of child (if any)—Wm. Godfrey Vanderbilt. Color— AVhite. Sex—Male.
    2. Date of birth—October 20th, 1903.
    3. Place of birth—New Providence, Union county, N. J.
    4. Name of father—John Vanderbilt. (If out of wedlock, write O. AV.)
    8. Number of children in all by this marriage-—One. How many of them living—One.
    9. Name and post-office address of medical attendant, in his own handwriting, with date—AV. H. Lawrence, Summit, N. J.
    [AVhieh signature was written by the medical attendant himself.]

      That Henry Mitchell is the medical superintendent of the said bureau of vital statistics; that the complainant’s wife claims that the child is the legitimate child of complainant, and is entitled to all the rights, personal and of property, which would belong to a legitimate child of complainant and his wife, and that the said child, through his mother, asserts said rights.
    The bill sets out a testamentary trust created by the mother of the complainant, Susan Ann Hoogland, by the terms of which certain property in the State of New York is vested in trustees, who are to collect and receive the income for and during the lives of two of the grandchildren of the testatrix named in the will, and divide the same into five equal parts, and pay over one of each of said parts to the four children of the testatrix (one of whom is the complainant) and to the children of the deceased daughter, the grandchildren above named. It was further provided that upon the death of the said grandchildren the corpus of the estate should go in equal parts to each of the said children and the issue of the deceased daughter, and that in case any of the said children should not be living at the termination of the trust, the share to which the deceased one would be entitled should go to his or her lawful issue, and in case any of said children should die before the termination of the trust, leaving no lawful issue, the share of such one should go to his or her brothers and sisters living at the termination of the trust, and to the issue of any deceased child or children per stirpes.

    It is charged that Oliver G. D. Vanderbilt, who is one of the trustees above mentioned, is a resident of New Jersey, and that-the large income derived from the trust estate aforesaid is by him deposited and kept in the State of New Jersey.
    The seventh paragraph of the bill is as follows:
    ‘•Your orator further shows that he is sick and infirm, and believes and is advised by his physicians that he is afflicted with a fatal illness, and that he is greatly wronged, and suffers much pain and anguish of spirit, by reason. of the false and. fraudulent claim made by the said infant, through his mother, that your orator is the father of said child, although born of his mother while living apart from your orator, as aforesaid, and that the certificate of birth filed as aforesaid is a fraud upon your orator, by virtue whereof your orator’s said wife seeks to falsely and fraudulently .create evidence in favor of her offspring whereby said child can claim to be the lawful issue of your orator, and as such is entitled to benefit in the land and income therefrom under the will of Susan Ann Hoogland, as aforesaid, and also to secure the right to the name and repute and status of a child of your orator. And your orator shows and charges that he is wronged and aggrieved by the continued existence of said certificate of birth as a public record of this state, evidencing that your orator is the father of said child.”
    The prayer is for an injunction against the medical superintendent restraining him from issuing certified copies of the certificate of birth, and for a decree declaring that complainant is not the father of the child; that the record of said birth and the certificate thereof, if not entirely expunged and removed, may be altered and amended by striking out the name of your orator as the father of said child; that Myra L. J. Vanderbilt and the said child may be enjoined from offering in evidence, in any court of law or equity in this or any other jurisdiction, the certificate of birth aforesaid, or the record thereof, or a certified copy of the same, and may also be enjoined from representing said child as the child of said complainant, and from using for said child the name of Vanderbilt, and from claiming for said child the status, name, property or privileges of a begotten child of complainant.
    A demurrer to this bill is interposed by Myra L. J. Vanderbilt individually and as guardian ad litem of the child.

      Messrs. McDermott ■& Enright, for the complainant.

      Mr. Harry V. Osborne and Mr. Leroy Gibby, for the demurrants.
   Garrison, V. C.

(after stating facts).

The demurrer, of course, admits the truth of all of the allegations of the bill that are well pleaded. The bill charges that Myra L. J. Vanderbilt, the wife of the complainant, caused the certificate of birth of the child to be filed.. In view of the statutes of this state upon this subject, I do not think this allegation is admitted by the demurrer. The statute in question is the act of February 15th, 1888. P. L. MSS p. 52; Gen. Stat. p. 2006. Paragraph 18 of that act provides

“that it shall be the duty of the physician or midwife present at the birth of any child born in this státe, and in case there be no physician or midwife present, then of the parents, or either of them, to transmit, within thirty days after such birth, to the officer herein designated, a certificate of such birth, which certificate shall be set forth particularly, as far as they can be obtained, the day of the month and year of the birth, the township, city or municipality and the county in which the birth occurred, the name of each of the parents, the maiden name of the mother, the birthplace, residence and occupation of each of the parties, the sex and color of the child, the name of the child, if it be named, and the name of the attending physician or midwife, if any there be.”

A penalty of $30 is provided for the failure of any physician or midwife to transmit such certificate as aforesaid.

Paragraph 14 provides that the certificate of birth shall be transmitted to the registrar of vital statistics, if there be such officer, and if not, then to the clerk of the city, borough, town or other, municipal government in which such birth occurred; and in townships, to the assessor, and if no assessor in office, then to the township clerk.

Paragraph 33 makes it the duty of the officer first receiving the certificate to transmit the same to the “state bureau of vital statistics at Trenton.”

Paragraph 31 provides

“that any * * * physician, midwife, or other person, who shall knowingly make any false certificate of * * * birth » * * shall be deemed guilty of a misdemeanor,”

and be liable to fine or imprisonment, or both.

Paragraph 33 makes it the duty of the medical superintendent of the bureau of vital statistics to receive the certificates and keep them, and properly index and record them, and further enacts that

“such original certificates, or any copy thereof, certified to be a true copy, under the hand of said medical superintendent, shall be evidence in any court of this state to prove the facts therein contained.”

An inspection of the copy of the certificate in this case shows that it was made by a physician named W. H. Lawrence. It was his duty to comply with the provisions of the law in this respect, and to file this certificate, and therefore I do not think that the charge in the bill is well pleaded that the wife of the complainant caused this certificate to be filed. The law required it to be filed, and provided that the physician should file it, or cause it to be filed. He did so. The certificate seems to be in exact conformity with the provisions of the act.

Under the well-pleaded facts in the bill it appears that there are certain statements in the certificate which are false, namely, it is false that the name of the father of the child is John Vanderbilt, and that the number of children in all by the marriage is one, and that one is living. There are no well-pleaded allegations that the physician knowingly made any false certificate, and the physician is not made a party to this bill.

Since it is conceded that a male child was born to the woman named, at the time and place named, and that the attending physician made the certificate required by law, which has been lodged with the officer designated by law to receive it, and it has thus become a record of the state, I think it clear that the certificate itself cannot be canceled, suppressed or wiped out in its cntiret3r, and this would not be necessary to effectuate the purpose of the complainant. This certificate would be harmless, so far as the complainant is concerned, if it did not recite that the complainant was the father of the child. It is this statement which he desires to have excised from this certificate or record, which latter, by statute, has evidentiary force to prove the facts therein stated.

If the complainant cannot call for the cancellation, suppression or annulment of the entire record, is there any jurisdiction in this court in this proceeding to order the excision of the false or untrue statements concerning his paternity of this child ? I am aware of no head of equity jurisprudence under which any such jurisdiction could be exercised. If the complainant’s theory is that the record is incorrect, and that he has such an interest therein that, upon his application, it should be corrected, this would lead to proceedings by mandamus, or perhaps by certiorari. If it be held that the result of the legislation on this subject is to constitute an inferior tribunal with quasi-judicial power to ascertain and record certain facts, among them paternity, &c., then it is possible that the record of the finding of this tribunal would be subject to review by the supreme court on certiorari. Whether there is any possibility of the complainant succeeding in such proceedings it is not necessary or proper for me to determine.

If the physician, in the performance of a statutory duty in making this certificate, has made incorrect statements therein, and there is any power in any court to compel him to correct such statements, that poAver is by mandamus or certiorari issued out of a court of laAV. His remedy, in my view, in this respect is either at law, or else it does not exist, for if he may not get this record corrected by some proceedings at laAV, there is no jurisdiction in equity with respect thereto which would empower a court of chancery to order the correction made.

In the suit at bar the physician is not a party. I do not see any aspect in which the medical superintendent, the custodian of this certificate or record, could be compelled by law in any other Avay than the physician might be to correct this record, and there is, of course, an obvious difficulty in proceeding against the medical superintendent by mandamus to compel him to correct it. His only statutory duty is to receive and hold the certificate, and to issue certified copies thereof when requested. He has no duty with respect to making the certificate, and therefore it is clear that he could not be compelled by law to execute a duty, namely, to correct misstatements, when he Avas not iequired by laAV to make any statements, correct or incorrect. The only duty that he could be enjoined to perform would be that Avhich the law casts upon him, and that does not include any function with respect to making the certificate.

Passing, for these reasons, from the consideration of relief to the complainant by way of correcting the record or certificate, we come to the other suggested remedies.

The complainant desires to enjoin the medical superinterrdent, broadly speaking, from alloAving this certificate to be taken from his custody to be used as eAddence, and from certifying copies thereof for similar use. I do not know under Avhat head of equity jurisdiction any such relief could be granted. This certificate is a record of the State of New Jersey. The statute requires copies thereof to be made and certified, and gives such copies certain evidentiary value.' So long as the record is there, I do not think it proper for a court of equity to restrain the state’s officer from doing his statutory duty. If the court has not the power, under the circumstances of this case, to cancel, annul or correct this record, I do not see how it can have the power to enjoin the custodian of it from doing his statutory duty with respect to it. That a court of equity has not the power, under the circumstances, to order the cancellation, annulment or correction of this record I have already determined.

The complainant further prays an injunction against the mother of the child and against the child, restraining them, broadly speaking, from- using this certificate, or any copies thereof, as evidence, and from claiming that the child is the complainant’s child. Here, again, I fail to find any basis for the interposition of equity. The nearest analogy is jactitation of matrimony, tlie effort in this case being to restrain a child and its mother from boasting or claiming that the child is legitimate. The jurisdiction in jactitation suits was in the ecclesiastical courts, and since we have no ecclesiastical courts, no tribunal can take jurisdiction without authority from a statute. Bish. Mar. & D. §§ 121, iSOI et seq., particularly § 128.

The jactitation suit has never been known in any of our states. Bish. Mar. & D. § 796.

The remedy of establishing or destroying personal status does not belong to the original jurisdiction of chancery, and, so far 'as it exists, is wholly of statutory origin. 1 Pom. Bq. Jur. (3d ed.) 123 § 112. And in section 99 (1 Pom. Bq. Jur. (3d ed.) 105) he says:

“It> is only when some property rights or questions concerning property arise between husband and wife, parent and child, guardian and ward, that equity can possibly have jurisdiction, and even in such cases jurisdiction does not extend to the merely personal relations.”

The complainant in this suit shows no property rights of his which are in any way affected and require protection. Under the trust created by his mother he receives the income during his life, and the legitimacy or illegitimacy of-this child cannot affect his rights with respect thereto. Whether this child is legitimate or illegitimate is a subject of interest and concern to those who would benefit if this complainant died without issue. But, as has just been said, no property right of the complainant is affected by this question. With respect to the property owned by the complainant, he may, of course, dispose of that by will, if he so desires, and the legitimacy or illegitimacy of the child does not affect this right in the least, and if he does not dispose of it by will, this child, if not his, has no legal claim upon his estate. If, then, the complainant has no property rights that are affected by the question of the legitimacy or illegitimacy of this child, the only injury or grievance of the complainant is personal, and I do not know of any power in a court of equity to give him the relief he asks for in this respect.

Although there have been many cases in which adulterine bastardy was the issue, I have not found one, and counsel have not cited any, in which the father was the actor. The issue was always raised by one whose property rights were involved.

As Pomeroy has well said, the question nowadays to be determined by a court of equity is

“whether the circumstances and relations presented by the particular case are fairly embraced within any of the settled principles and heads of jurisdiction which are generally acknowledged as constituting the department of equity.” 1 Pom. Eq. Jur. (3d ed.) 66 § 63.

As I have before said, I know of no recognized head of equity jurisdiction under which this bill could be entertained. The demurrer must therefore be sustained.

Since the courts have held that it is against public policy to permit a husband or wife to testify as-to non-access, with respect to a. child conceived during wedlock, I had some doubt whether a court of equity should entertain this suit. The entire gravamen of this suit is to have a child declared a bastard. The bill is by the husband of the mother of the child, and the latter was conceived during wedlock. It has been said that the rule above alluded to “is founded on the very highest grounds of public policy, decency and morality.” The authorities will be found in 11 Eng. Bul. Gas. '518 and notes; 7 Meta’s Eng. Gas. L. Dig. col. -61k, Ht. “Evidence of Parents as to Access;’’ 8 Wigm. Ev. 2061 § 2068 et seq.

If the authorities made it clear that the courts had determined that public policy forbade the ostensible parents from giving testimony which would bastardize the issue, and that such public policy was in tender consideration of the issue, I incline to the opinion that a bill filed by the ostensible parent to accomplish the bastardization of the issue would not be entertained. It seems to me that if the rule of public policy were grounded as above suggested, such a bill would be obnoxious to the rule. But after reading the authorities I do not find that consideration for the infant was always, or in fact often, the reason given for the application of the rule. Many and different reasons are stated for its existence and application, and I do not feel justified, therefore, in refusing to entertain jurisdiction of this bill upon this ground.

I will advise an order sustaining the demurrer, for the reasons heretofore stated.


source: Caselaw Access Project

author: (Garrison, V. C.

license: Public Domain

text:
    Olives D. G. Vanderbilt v. Henry Mitchell, medical superintendent, et al.
    [Decided May 17th, 1906.]
    One who would be entitled to a portion of an estate in the event of his brother’s dying without issue was not entitled to maintain a bill to cancel a record of birth showing that a certain infant was the child of complainant’s brother, and to establish that the infant was not of such parentage, on the ground that the infant was in fact illegitimate.
    On demurrer to bill.
    This is a bill filed by Oliver D. G. Vanderbilt against Henry Mitchell, W. H. Lawrence, Myra L. J. Vanderbilt and William Godfrey Vanderbilt. The charges in this bill are practically identical with those in the bill filed by John Vanderbilt against some of the same defendants, which last-named bill is sufficiently set forth in the opinion disposing of the case of John Vanderbilt. The only difference between the bills is as to the relation of the complainant to the cause of action. The complainant in this suit is the brother of John Vanderbilt. He is one of the trustees under the will of Susan Ann Hoogland, and in the event of John Vanderbilt dying without issue, he or his issue will be entitled to a portion of the estate which otherwise would go to the issue of John Vanderbilt.
    A demurrer is interposed by the defendants Myra L. J. Vanderbilt and William Godfrey Vanderbilt.

      Messrs. McDermott & Enright, for the complainant.

      Mr. Harry V.' Osborne and Mr. Leroy A. Qibby, for the demurrants.
   (Garrison, V. C.

(after stating facts).

The opinion disposing of the ease of John Vanderbilt so fully deals with the subject-matter necessarily involved in the decision in this case that it is not necessary to repeat the issues or the decision respecting the same where they are practically identical.

This complainant, who is the uncle of the child, if the latter is the legitimate child of John Vanderbilt, clearly-has no such interest in the mere matter of the personal rélations between John Vanderbilt and the alleged issue of John Vanderbilt as to give him any standing in this court to the relief -prayed for, which is practically the same as that prayed for by John Vanderbilt in the bill previously alluded to. His sole claim to a right must rest upon his property interests in any subject-matter which will be affected by the question of the legitimacy or illegitimacy of the child. It is clear, however, that at the present time he has no property right that is at present affected by this question. He charges that under the will of his mother there is a trust created, and that his share of this trust estate, when it is distributed, will be enlarged if John Vanderbilt dies without issue. He then charges that this child is not the issue of John Vanderbilt. It does not follow that John Vanderbilt may not die leaving legitimate issue, even if the existing child be illegitimate. It certainly does not appear that this complainant has any present interest that is affected, or can be affected, by the .question of the legitimacy of this child until the death of John Vanderbilt.

It may be that the interest which this complainant has under the will of his mother may entitle him to file a bill to perpetuate testimony,' but I do not have to consider or decide this, because there is no such issue presented by the present bill. This bill is for immediate relief by cancellation of the alleged untrue record, or by injunction against its use.

For the reasons stated herein and in the opinion in the case of John Vanderbilt, the demurrer must be sustained, and I will so advise.


author: Garrison, Y. C.

text:
    John F. Black v. Sarah J. Thurston et al.
    [Decided May 17th, 1906.]
    1. Where a mortgage was satisfied in the hands of the mortgagee, one who subsequently took the mortgage from the mortgagee, with knowledge that it had been satisfied, acquired no rights under the mortgage.
    2. Under the express provisions of Gen. Stat. p. %108 § 81, the assignee of a bond and mortgage takes subject to all the equities of the mortgagor.
    On bill, answer, cross-bill, answer to cross-bill, and proofs.
    The bill in this cause'seeks to foreclose a mortgage secured upon property at Saddle River, New Jersey, in the principal sum of $2,000, dated August 20th, 1895, made by Henry W. Thurston and wife to Theodore Wiedersheim. By Wiedersheim this mortgage, on the 25th day of April, 1905, was assigned to Francis B. Clark, and, on the 23d day of May, 1905, was by Clark assigned to the complainant.
    The defence, briefly stated, is that there is nothing due on the mortgage, and by a cross-bill the defendants seek to have the mortgage canceled.

      Mr. Maximilian T. Rosenberg, for the complainant.

      Mr. John M. Enright, for the defendants.
   Garrison, Y. C.

The facts I find as follows: Thurston was a nephew of Nathaniel McKay, of Washington, District of Columbia. He and McKay had a joint interest in a bridge situate in the republic of San Domingo. MpKay originally obtained the concession and transferred it to a company he caused to be incorporated, called the “New Jersey and San Domingo Bridge Company.” Subsequently the rights of the company in this property were transferred to Thurston, and he held it for the equal benefit of himself and McKay. In the year 1895 Thurston was desirous of buying the property at Saddle River (upon which the mortgage in controversy was subsequently placed), and, for the purpose of making the necessary payment, obtained from McKay the sum of $2,000. Afterwards McKay directed him to make a bond and mortgage for this amount to a son-in-law of McKay’s, named Theodore Wiedersheim. There is not the slightest doubt that Wiedersheim was a mere passive trustee holding this mortgage in trust for McKay.

In 1897 Thurston was operating a hosiery mill on the premises at Saddle River. Clark was in the employ of a banker and broker in Wall street, and had been acquainted with Thurston for many years. He and Thurston had been brought together previously in a business operation in which they were each interested. Thurston endeavored to get Clark to enter into partnership with him in the hosiery business. Clark declined, but as a result of their intercourse a corporation was formed’ to carry on the hosiery business at Saddle River. This corporation was c-allccl the “Thurston-Clark Hosiery Company,” and the details of its incorporation were entirely under the supervision and control of Clark. Clark put $7,000 into this business, for which he obtained seventy shares of stock. Thurston put in $3,000, for which he obtained thirty shares of stock, in addition to which each got some bonus stock, Clark getting forty-seven and Thurs-ton twenty shares.

Clark now contends that, notwithstanding what was done at that time, including the written papers, the actual transaction and intention of the parties was of an entirely different character than the apparent one. He now insists that he did not then become a stockholder: that he did not embark his capital in this enterprise, but that his agreement was to loan the money which he put into the company to Thurston, and that the stock which he took was merely collateral to the obligation of Thurs-ton. His present contention is that Thurston exhibited to him documents evidencing the interest of Thurston in the San Domingo bridge, and that, relying upon such interest, he agreed with Thurston to loan this money to Thurston for use in this hosiery business.

At that time, namely, in 1897, I do not think it appears that the award had been made by which the San Domingo government was to pay the owners of the bridge for it, that government having confiscated the bridge. Clark did not, at that time, obtain anything from Thurston by way of assignment, or in any other wayr evidencing Clark’s interest in or lien on Thurston’s share of the money to come from the bridge. Everything which the parties did at the time is directly contradictory of and in opposition to the theory now advanced by Clark.

I find that Thurston’s testimony upon the vital point involved in this branch of the case is true, and that he did not in any way acquaint Clark with his interest in the San Domingo bridge until long after the period in 1897 when the hosiery company was formed. I find that when the hosiery company was formed, Thurston and Clark each went into it in the same way, namely, as stockholders embarking their money in the enterprise. I do not find the slightest evidence to show that Thurston became the creditor of Clark by reason of this transaction.

The business of the company was carried on by Thurston, as the practical operator of the mill, and by Clark and his son, as financial managers. In 1898 Thurston became ill, and was compelled to leave this part of the country, and for a short time thereafter Clark and his son continued to carry on the business, Clark advancing to the corporation, on its notes, considerable sums of money, the exact amount of which was not definitely shown, but somewhere between $7,000 and $9,000. Finally the business was stopped.

As has been before stated, the government of San Domingo confiscated the bridge in question, and the owners induced our government to take up the matter, which it did. Through the good offices of our government an arbitration was entered into between the parties, which in 1898 or 1899 resulted in an award in favor of Thurston, as the owner of the bridge, against the government of Sau Domingo for about $81,000 and interest, which was agreed to be paid in installments. The money was collected by our government, and it was arranged between McKay and Thurston that McKay was to collect the same, and for this purpose a power of attorney was lodged with the state department of the United States, by the terms of which Thurston empowered McKay to collect the money.

In 1901 Clark procured the Thurston-Clark company to turn over to him its machinery and tangible assets, the expressed condition being the notes of the company held by Clark. Although Thurston apparently was not consulted about his, he does not complain, a.nd the transaction is therefore not attacked. Clark was very desirous of disposing of this machinery, and Thurston was equally anxious to obtain it, because he desired to resume the business of manufacturing hosiery. There'were negotiations between Clark and Thurston, but as Thurston was without ready money they were fruitless. Finally it was arranged between Clark, Thurston and McKay that McKay should give to Clark his note for $3,000, at one year, and should cancel the $2,000 mortgage in question which he held -upon the Saddle Biver property. Clark, upon his part,'was to give a bill of sale for the machinery to McKay, and was to cancel a $1,500 first mortgage which he held upon the Saddle Biver property. This bargain was carried out in all of its terms, excepting that McKay never did cancel the $2,000 mortgage.

From McKay’s letters it is apparent that he was having-trouble with his relatives. He had, up to this time, been married three times, and there was undoubtedly trouble between him and his immediate relatives. The wife of Wiedersheim was one of his children, and Wiedersheim held the title to this mortgage, and this probably is the explanation of why McKay did not procure a satisfaction piece of this mortgage at this time, as he had agreed to do.

In June, 1902, Thurston learned that McKay was about to marry for the fourth time. McKay was then seventy-one years of age, and for a long period had been in ill health. Thereupon Thurston went to Washington to see McKay, to endeavor to arrive at a settlement of their various business relationships. Up to that time McKay had collected from the government a large part, if not all, of the award. With interest, this amounted to something in the neighborhood of $92,000. All that he had ever given to Thurston had been $1,500 of notes, which he paid, and the $3,000 note which he had given to Clark, but which was not yet due.

At the interview in June of 1902 between Thurston and McKay the latter again agreed to cancel the $2,000 mortgage and to give to Thurston, as security for the balance due him from the San Domingo bridge, bonds of the Dewey Hotel Company, which company was one promoted and controlled by McKay. McKay instructed his Washington attorney to procure the cancellation of this mortgage, and almost immediately afterwards was married and went to Atlantic City, New Jersey, upon his wedding trip. From there he wrote to Thurston, asking him to come there, and stating that he would have the mortgage (the $2,000 mortgage in question) and bonds (the Dewey Hotel bonds). Before Thurston could comply McKay died. His death occurred on the 12th of July, 1902. After the death of McKay, Thurston put the collection of his claim against the estate of McKay in the hands of a Washington lawyer named MacMahon. On the 4th of November, 1902, Thurston wrote to Clark concerning the McKay estate, and in a long letter, dated' November 7th, 1902, Clark replied. Clark continued to reside in New York, Thurston at this time having established himself at Nome, Georgia, where he was carrying on the hosiery business. The note for $3,000 given by McKay to Clark came due on the 5th of November, 1902, and was protested, and some time in the latter part of December, 1902, or the early part of January, 1903, Clark engaged Emilie Bullowa, a New York lawyer, to represent his interests. On the 17th of March, 1903, Clark wrote to Thurston that he had begun proceedings against the estate of McKay to collect his $3,000 note, and that he had applied to the court to be appointed collector of the estate. Tins apparently is a proceeding by which one in the nature of a receiver is appointed to gather in the assets of an estate either because the executors will not or because the court for good reason restrains them. In this letter Clark urges Thurston to consult the former’s Washington attorneys, and see if they cannot combine their claims, so as to make a large showing to induce the court to appoint this collector. He requests Thurston personally to do this, but if he cannot, suggests that he have his Washington attorney do it. Thurston replied to this letter, and his reply shows entire compliance with the idea, and informs Clark that he has instructed his Washington attorney to act as suggested, and that if this does not produce the proper result, he will forward to Clark a power of attorney to act for him. The result of this correspondence was that on the 1st of April, 1903, Clark sends a form of a power of attorney, from Thurston to him, to Thurston, to be executed and returned, stating, “I will do the best I can in the matter for you, and hope for good results.” The power of attorney, executed and returned by Thurston to Clark, is dated April 4th, 1903.

On the 7th of Ma3r, 1903, Clark writes to Thurston that the record title of Thurston to the moneys collected on account of the San Domingo bridge is good, but that the estate of McKay repudiates Thurston’s claim, and threatens to defeat it by showing that he was merely the nominal owner of the bridge, the real interest being McKay’s, and that evidence of the personal relations between McKay and Thurston, and any counter-claim or offset on behalf of McKay against Thurston, would be excluded if suit against the McKay estate on Thurston’s claim were brought by an outsider. He therefore suggests that Thurston assign his claim against the McKay estate to him, Clark, and encloses in this letter a form of assignment, with instructions as to how it should be executed. Thurston replies, under date of May 10th, and suggests that before he execute the assignment it would be well for them to have a complete understanding between them about the matter, and saying, “I would suggest you incorporate in same papers your terms for collecting same.”

On the 14th of May, 1903, Clark replies to this, stating that he was disappointed and hurt at Thurston’s refusal to execute the assignment, and reiterating the necessity of the suit being brought by an outsider, to have any chance of success, as otherwise it would be subject to proof that Thurston was not the real owner, but McKay was. In this letter Clark says that he had never thought of what he was to get out of it; that he only took hold of it for Thurston, with the intention of helping him, but that, since Thurston does not trust him, he feels like dropping the whole thing; that already he has expended considerable money, and “naturally I [he] will look for a return of moneys paid out and lost, and to lawyers, and'all charges and expenses incurred.” He then goes on to say that his wife and son are entirely familiar with the situation, and are his executors, and in ease of his death they will live up to his instructions, and he then suggests to Thurston that if they have any private understanding, not expressed on the face of the assignment, he will be subject, when on the witness-stand, to interrogation which will develop the fact that he is not the owner of the Thurston claim, but is merely the holder of an assignment without consideration.

Thurston’s reply to this was the enclosure of the executed assignment to Clark, without word or comment. This executed assignment is dated May 16th, 1903, the consideration being “for value received.”

Some time after this (just when does not appear) Clark sends to Thurston a draft of a letter bearing date “Rome, Ga., May 4th, 1903,” addressed to Clark, and signed “Henry W. Thurs-ton.” Accompanying this letter there is a memorandum, written by Clark and signed by his initials, as follows:

“My lawyers say they want to show that the assignment was made to me for value, and the larger the amount the better and more convincing it will be that it was made to me on legitimate transactions, and suggested that you write a letter to me, a copy herewith which will cover the case I think about that date. Let me have it soon. We are getting things in shape for testimony.”

The drafted letter, which subsequently was signed by Thurs-ton and mailed to Clark, was as follows :

“Rome, Ga., May 4th, 1903.
“Mr. E. B. Clark:
“Dear Sir—As you doubtless are aware by this time that the estate of my late uncle, Nathaniel McKay, is not likely to be settled for some time to come, owing to what seems to me to be a disposition on the part of those in control of estate to underestimate it, and to conceal and hide from the creditors the properties belonging to it, and making it necessary to fight them in the courts, I wish to protect you, and propose assigning to you my claim for upwards of $90,000 against said estate to cover my indebtedness to you from the hosiery company and advanc.es, which, with interest, amount to over $20,000, it having been my understanding that as soon as the San Domingo bridge award was paid by the government that I was to pay you, but as, you know, uncle died before I could effect a settlement with him for the money he collected as my attorney from the government under the bridge award, I was unable to do so, and now assign the matter over to you. You can sue the estate or collect it in any manner you may deem best for the protection of your interests.
“You had talks with Uncle Nat on' several occasions when he called at your office in New York in November, 1901, when he told you he was going to settle with me at the time he gave you his note for $3,000 and took up the mortgage which you'held on my place at Saddle River. I am afraid you will have to fight to recover under the claim, but knowing, as I do, that it is' perfectly good, Lho estate representing in value more than $200,000, and my right to the money awarded to me under the bridge claim was established in the courts when Pell brought suit in Washington, I do not see how you can fail to collect from the estate the full amount, with interest, the debt my uncle’s estate owes me for money collected by him as my attorney from the government under the award. I will give you later such information as I can to enable you to prosecute a suit if you bring one, and which will be at your cost.
“If you will have an assignment made out by your lawyer and send it to me here I will execute it and return it to you with a feeling that I will have done my utmost to protect you, as I told you I would if you left the matter in my hands. Thanking you for your patience and assistance, and hoping for an early collection of the money from the estate, I. am, Yours truly, H. W. T.”

Tbis letter is practically the only evidence by which Clark seeks to show that Thurston acknowledged any indebtedness to him. . .

It was necessary to incorporate this letter in full because of its vital connection and of the light that it throws upon other important considerations in the case.

It is apparent that Clark’s attorneys, upon investigating Thurston’s claim against the estate of McKay, realized that this claim would meet with certain serious, if not insuperable, obstacles. They feared that the estate would be able to prove that Thurston had no real interest in the bridge, but was merely a dry trustee for McKay, and that, instead of McKay’s being indebted to Thurston, Thurston was as a fact indebted to McKay, and that whatever this amount was would be claimed as an offset or counter-claim. They appreciated the legal situation, and concluded that if they could work an estoppel against the estate of McKay, any attacks upon the claim along the line just suggested would be harmless. Their client, Clark, had an absolute assignment of Thurston’s claim, and if they could show, not only that Thurston was indebted to Clark, but that the money loaned by Clark to Thurston was advanced upon the faith of McKay’s agreement that Thurston owned one-half of the bridge, the estate of McKay would be estopped, as against one who had advanced money upon McKay’s own statement of Thurston’s interest, to deny Thurston’s interest. It therefore became necessary for Clark to assert that báck in 1891, when he went into the hosiery business with Thurston, he did not do so as a stockholder, but merely as one who advanced money to Thurston upon the faith of McKay’s agreement' with Thurston by which the latter became the one-half owner of the bridge, and that such indebtedness still subsisted, and was'the consideration for the assignment.

The latter part of this proof was sought to be established by the letter just quoted. It undoubtedly was fabricated to serve as proof,'and was conceived solely by'Clark, either alone or acting with his attorneys, and'was'signed by Thurston because Clark desired it, and not in any way as a truthful statément by Thurston of the existing facts. The intention, with respect to this paper, was to use if as an instrument of proof against the McKay estate. There is not the slightest basis for believing that; as between Clark and Thurston,'it had any validity whatever.

Clark brought an action in Washington, District of Columbia, against the estate of McKay, based upon his own note of $3,000 and upon the assigned claim of Thurston. On the 29th of March, 1905, this case was called for trial in the supreme court of the District of Columbia, there being present Clark, Miss Bullowa (his New York attorney), Lambert & Baker (his Washington attorneys), Thurston, and the representatives of the McKay estate. After the case was called, and before response was made, a proposition of settlement was suggested by the attorneys of the estate. This was not within the hearing of Thurston. The court adjourned the case until the next day, and the parties separated, those on the side of the claimants going to the office of Lambert & Baker, and the others going to their respective offices. The negotiations were then carried on over the telephone, Clark, Miss Bullowa, Thurston, and Lambert & Baker being in the latter’s offices. The last proposition received from the attorneys of the estate was to settle the entire claim for $12,500, of which a portion was to be paid by the mortgage of Thurston to McKay, and its accumulated interest.

Leaving Thurston at the offices of Lambert & Baker, the • others went to the offices of the attornej's of the estate, and there made a final agreement on the terms just stated. That evening, at the hotel at which they were each stopping, Clark told Thurs-ton the terms of the settlement. Thurston testifies that he vehemently protested; Clark insists that Thurston acquiesced. However this may be, they each agree that on the next morning Thurston most strenuously objected to Clark, and subsequently, when Miss Bullowa came in, to her and Clark. He insisted that he should have one-half of whatever was obtained by way of settlement. He even threatened to break up the settlement by going to the attorneys of the other side and making certain disclosures which would have that effect. Thus far the parties agree as to the happenings of this day, March 30th, 1905; but they radically differ from this point on. Miss Bullowa and Mr. Clark say that they replied to Thurston’s demand by telling him that it was unreasonable and even ridiculous, and that they would not give him anything, and that he finally acquiesced in this, and even went so far as to insist upon signing a receipt for all the money that Clark had advanced him pending the suit, and giving a written promise to repay all of this money, which amounted to $528.

Thurston's version is that Clárk agreed to his demand, and that they arranged that what was obtained from the estate should be disposed of as follows: The $2,000 mortgage was to be canceled; the $3,000 note was to be paid; the expenses advanced by Clark were to be repaid to Clark; the balance was to be equally divided between them.

The bond and mortgage in question had been surrendered by the estate to Miss Bullowa, but had not been assigned to Clark in accordance with the agreement of settlement. Thurston insists that he requested an immediate cancellation of the mortgage, and that Miss Bullowa stated that she was too busy just then to draw the papers, and that upon her return to New York she would, for some little time, be too much occupied to give ■ this matter further attention, but would do so later.

On the evening of the 30th of March the parties separated, Clark and Miss Bullowa returning to New York, and Thurston to Borne, Georgia.

On the 23d of May, 1905, Clark assigned the mortgage in question to the complainant. There is no evidence to show whether this assignment was for value or not.

On June 4th, 1905, Thurston writes from Georgia to Miss Bullowa that her promise to get the matter in shape to cancel the mortgage or transfer it to his wife has not been kept. Failing to hear from her, in about two weeks he writes in a similar strain to Clark. The replies of Miss Bullowa and of Clark to Thurston do not mention the fact that the mortgage has been assigned; nor do either of them point out, as would seem to have been the natural thing to do, that Thurston is making a claim directly in the face of the understanding between them and the facts. If it were the fact that Thurston had absolutely •assigned to Clark his interest in the McKay estate, and that when the settlement by Clark with the estate was made on March 30th, 1905, this mortgage came to Clark, and he told Thurston at that time, as he says he did, that this mortgage was a valid lien in his hands against Thurston, it is inconceivable to mg that' he should have replied to Thurston as he did.

I think it perfectly apparent that the assignment from Thurs-ton to Clark of Thurston’s claim against the McKay estate was not given upon any consideration, and that at that time there was not in the minds of any of the parties the slightest idea that it was. I think it clear that the reason for the assignment was that heretofore explained by me, namely, to enable Clark to appear as the absolute owner of this claim, to prevent offsets and counter-claims against Thurston, and also as a basis for an estoppel against the estate of McKay.

I think it undoubtedly is the fact that when Thurston, through McKay, in the year 1901, obtained the machinery of the hosiery company from Clark, he told Clark that if he made a success of this business he would make Clark whole on his investment in the original enterprise. Clark, it will be recalled, had put some $16,000 into this hosiery business, and owing to Thurston’s ill health and inability to carry on the business, this money, together with that put in by Thurston, had been lost, and I think it quite clear that Thurston felt kindly to Clark, and felt as if he should make Clark whole, if he could do so, out of the earnings of the business when he resumed the same. But there is no credible evidence that there was any binding obligation upon Thurston of this character, or of any character. Clark’s own letters to Thurston utterly refute the existence of any such obligation resting upon Thurston. He, in fact, states in one of his letters, referring to Thurston’s purpose of repaying him if possible, that Thurston “is not bound to make repayment,” and there is no evidence anywhere that Thurston was so bound.

The necessity of putting consideration back.of this assignment, and of showing that Clark advanced money to Thurston on the faith of McKay’s agreement with Thurston concerning the bridge, was undoubtedly conceived by the lawyers and com-" municated to Clark. In a long memorandum, written by Clark and sent to Thurston, with an injunction to destroy it, Clark outlines the testimony which will be necessary to be given to succeed in the suit against the McKay estate. He begins this memorandum by saying:

“I told my lawyers to-day that I remembered you showing the bridge papers to me on several occasions when X was at your house in Saddle River * * * some papers relating to the concession; that McKay’s letters, as I remembered them, indicated that you were the owner and he acting as your agent.”

It is thus clear that all evidence of apparent indebtedness from Thurston to Clark was fabricated years after the original dealings out of which the indebtedness is alleged to have arisen, solely for the purpose of recovering judgment against the McKay estate, and that no indebtedness did, as a fact, exist between Thurston and Clark.

With respect to the $2,000 mortgage, the evidence is entirely clear that Clark knew that Wiedersheim was the mere titular holder thereof; that McKay was the actual owner; that McKay agreed with him, Clark, that this mortgage 'was satisfied and should be canceled; and after the death of McKay and the institution of proceedings -against his estate in Washington, Clark came into the possession of most, if not all, of the correspondence between Wiedersheim, McKay and Thurston, and learned from it that McKay had agreed with Thurston to cancel this mortgage.

Since the conclusions above stated result in finding that Clark was acting for Thurston in the collection of the claim against the McKay estate, and while so acting came into possession of this mortgage, it follows that he could not enforce this mortgage against Thurston. In the hands of McKay this mortgage was invalid, or no longer had vitality. This was so to the knowledge of Clark. Therefore in Clark’s hands it was similarly affected. The sole question, as 1 view it, is whether this complainant has any better right than his assignor, Clark. The rule is entirely settled in this state that the assignor of a bond and mortgage takes, subject to all equities of the mortgagor. Atwater v. Underhill, 22 N. J. Eq. (7 C. E. Gr.) 599 (Court of Errors and Appeals, 1872) ; Whitney v. Franklin, 28 N. J. Eq. (1 Stew.) 126 (Chancellor Runyon, 1877); Woodruff v. Morristown Institution for Savings, 34 N. J. Eq. (7 Stew.) 174 (Vice-Chancellor Van Fleet, 1881); Magic v. Reynolds, 51 N. J. Eq. (6 Dick.) 113 (Vice-Chancellor Pitney, 1893); Fisher v. Bull, 52 N. J. Eq. (7 Dick.) 298 (Court of Errors and Appeals, 1894); Tallman v. Wallack, 54 N. J. Eq. (9 Dick.) 655 (Court of Errors and Appeals, 1896); Mott v. Newark German Hospital, 55 N. J. Eq. (10 Dick.) 737 (Vice-Chancellor Grey, 1897).

And the statutes give similar rights of defence. Gen. Stat. p. 2108 § 31; P. L. 1902 p. 532 % 61.

There remains the matter of granting relief to the defendant upon his cross-bill. He therein sets up that this mortgage has been satisfied, and prajrs that it may be delivered up for cancellation. I have found that the mortgage is unenforceable and may not be foreclosed, and it should therefore be canceled unless this latter relief were withheld for considerations now to be stated.

Clark acted for Thurston in the proceedings which resulted in this mortgage being transferred from the McKay estate to Clark. He undoubtedly incurred expenses in that litigation, and, to the extent that he received anything for Thurston, probably would be entitled to a quantwm meruit for'his labor in acting as agent in the matter. It is true he was acting also in his own behalf, since his $3,000 note and the assigned claim of Thurston were all in one suit, but he was also put to extra trouble and labor on account of the Thurston claim. The total amount agreed to be allowed as a claim against the McKay estate was $12,500. The $2,000' mortgage and the accumulated interest on it was deducted; $2,000 in cash was advanced either directly out of the estate or indirectly by the executors. This left some $7,000 as the proven claim allowed against the estate. The $2,000 above mentioned, which was paid in cash, went to the attorneys who had participated in prosecuting the claim. It does not appear whether Clark was reimbursed any of the moneys that he had expended. It does, however, appear that he had this proven claim for $7,000 against the McKay estate, and it is not even attempted to be shown that this claim is not a perfectly good one, and that he will not receive all of it.

I therefore think that it appears that Clark was sufficiently secured for any moneys which might be due to him from Thurs-ton on account of expenditures made by Clark in the prosecution of Thurston’s claim. This leaves entirely out of account.Thurs-ton’s contention that, under the agreement between him and Clark, he was to receive the one-half of the total recovery, less the mortgage, the note to Clark, and the expenses.

I will advise that the bill be dismissed, and that the prayer of the cross-bill be granted.


text:
    Union Stone Company v. Board of Chosen Freeholders of Hudson County et al.
    [Decided June 19th, 1906.]
    1. The act of March 30th, 1892 (P. L. 1892 p. 369; Gen. Stat. p. 20IS), providing for liens for persons doing labor or furnishing materials under any contract for a public improvement made with any city,-town, township, or other municipality authorized by law to make contracts for public improvements, applies to contracts with counties for public improvements.
    2. Where a contractor for the erection of a building for a county defaulted, and his sureties completed the performance of the contract, they were entitled to subrogation to the rights of the owner against the contractor and against persons claiming liens for materials furnished to the original contractor, to the extent necessary to reimburse them for their necessary outlay, but no further.
    3. Where a contract for the erection of a building for a county provided that in case of default by the contractor the county might make a new contract to complete the work and charge the expense to the original contractor, when a default was made by the original contractor, and the sureties on his bond completed its performance, being authorized to do so by resolution of the board of chosen freeholders, this did not constitute a new contract as authorized by the original contract so as to cut off the rights of creditors of the original contractor with respect to the remainder of the contract price unearned at the time of the default.
    Heard on bill, answer, replications and proofs in open court.
    Under the above title there were tried three canses, which were consolidated. The other pending suits were by Washburn Brothers Company and by Vanderbeek & Sons Company against the same defendants.
    The complainants are claimants under the Municipal Lien act.
    The defendants are the freeholders of the county of Hudson, Mrs. Jennie A. Judge, executrix of her husband, Gregory A. Judge, and Ferdinand Heintze, Daniel Y. Lewis and Henry Byrne, who were sureties on the bond to the county given by Judge, the contractor.
    On September 29th, 1902, the board of chosen freeholders of the county of Hudson made a contract with Gregory A. Judge for the erection of two additions to the county lunatic asylum, for the contract price of $46,400. The contract states that
    ‘‘in order to enable the said contractor to prosecute the work advantageously, the said architect shall, from time to time, as the work progresses, but not oftener than once a month, or in less sums than two thousand dollars, make an estimate of the amount of work done under this contract since the last preceding estimate was made, and the value thereof according to the terms of this contract. Upon which estimate being made, 80 per cent, of such estimated value shall be paid”
    to the contractor.
    It was further provided in the said contract that the contractor agrees
    “if the work under this agreement shall be abandoned * * * the said board shall have the power to notify the aforesaid contractor to discontinue all work * * * and thereupon the said contractor shall discontinue said work * * * and the said board shall thereupon have the power to place such and so many persons as it deems advisable, by contract or otherwise, to work at and complete the work herein described, or such part thereof, and to use such materials as it may find upon the lino of the said work, or to procure other materials for the completion of the same, and to charge the expense of said labor and materials to aforesaid contractor; and the expense so charged shall be deducted and paid by the parties of the first part out of such moneys as may then be due, or may at any time thereafter grow due, to the said contractor under and by virtue of this agreement - * and in case such expense is less than the sum which should have been payable under this contract if the same had been completed by the said contractor, he shall be entitled to receive the difference; and in case such expense shall exceed the last said sum, he shall pay the amount of such excess to the parties of the first part.”

      On the same day a bond was given to the county, executed by Gregory A. Judge, Ferdinand Heintze, Daniel Y. Lewis and Henry Byrne, in which they are bound in the sum of $20,000. After reciting that Judge had made the contract aforesaid, which is made a part of the bond, the condition is
    “that if the above-bounded Gregory A. Judge shall well and truly in all things, and in good, sufficient and workmanlike manner perform said contract according to the true intent and meaning thereof, and in each and every respect comply with the conditions and covenants therein, and shall at all times thereafter indemnify, keep and save harmless the said The Board of Chosen Freeholders of the County of Hudson, perfectly and entirely indemnified of, from and against any and all manner of actions, suits, liabilities, charges, liens, costs and payments, for and by reason of the premises, or by reason of any debt or obligation contracted for any such work or materials furnished under or by virtue of said contract, and keep all county property and the property of the said The Board of Chosen Freeholders of the County of Hudson clear and free of and from all liens and liabilities by reason of the doing of any of the said work or finding of materials therefor, as aforesaid, by the said Gregory A. Judge, or any other person or party of his authority, direction or request, if authorized as aforesaid, then the above obligation to be void, otherwise to be and remain in full force and virtue.”
    Judge began work under the contract and proceeded therewith for some little time, but not to the entire satisfaction of the architect.
    On July 14th, 1903, a resolution was adopted by the freeholders reciting that the architect had certified in writing that the work was being unnecessarily delayed, and that the contractor was willfully violating his contract, and notifying the contractor to discontinue all work under said contract, and further directing the architect to prepare a specification for the work undone and necessary to be done to completely perform said contract, and report to the board, to the end 'that the board might award the contract for the doing of such work to some other person, pursuant to said contract.
    On the 31st of July, 1903, the architect informs the board that, in pursuance of its directions, he has prepared specifications for the completion of the work, and on the 6th of August, ] 903, the board passed a resolution, in which, after reciting that, in spite of repeated notices, the contractor had failed to perform the work, and in the opinion of the board the said contractor has practically abandoned his contract, it was resolved that the clerk of the board be directed to notify the bondsmen of the said Judge that the board will hold them, individually and collectively, for the faithful performance of the contract.
    After the passage of this resolution some conferences were held between the sureties on the Judge bond and certain members of the board of chosen freeholders with relation to the matter.
    On December 3d, 1903, the board of chosen freeholders passed the following resolution:
    “Whereas, On July 14th, 1903, this board adopted a resolution directing Gregory A. Judge, contractor, to discontinue the work under his contract, dated September 29th, 1902, for the erection of additions to the county hospital for the insane; and
    “Whereas, On August 6th, 1903, -this board adopted a further resolution notifying Daniel Y. Lewis, Henry Byrne and Ferdinand Heintze, the bondsmen of said Judge, that they would he held responsible for the fulfillment of the contract of said Judge; and .
    “Whereas, After the adoption of the said resolution-the said Gregory A. Judge died, and said Daniel Y. Lewis, Henry Byrne and Ferdinand Heintze, after consultation and negotiation with the legal representatives of said Judge, undertook the performance of the work in accordance with the specifications and provisions of said contract, the said Judge having abandoned the same ; and
    “Whereas, Mr. Hugh Roberts, the architect in charge of said work, has certified that portions of the work under said contract have been completed by said bondsmen, and that moneys are now due therefor under the provisions of the contract;

      “Resolved, That the action of the said Daniel Y. Lewis, Henry Byrne and Ferdinand Heintze, in undertaking the completion of the work under said contract, be and the same is hereby approved, and that the moneys to grow due under said contract upon the performance of the uncompleted portion of the work be paid to the said Daniel Y. Lewis, Henry Byrne and Ferdinand Heintze, upon certificate of the architect, as provided in the contract with the said Judge; provided, however, that the legal representatives of the said-Judge shall execute and deliver to this board proper instruments, in writing, to be approved by counsel of this board, releasing this board from all claim and obligation under said- contract; and provided further, that this resolution shall in nowise affect the rights of any person who may have performed any work or furnished any materials to the said Judge in the performance of ihe said contract.”
    After the passage of this resolution there was paid to the defendants Heintze, Lewis and Byrne $30,559. The architect had certified that Judge had done $6,500 worth of work, and had figured that he was entitled to eighty-five per cent, of this amount (in round figures, $5,500), which the county had paid him, retaining $1,000.
    The contract provided that the contractor should only be paid eighty per cent, of the current estimates, so that the architect certified an overpayment of five per cent.
    At the time of the hearing the financiál account stood in this way: There had been paid to-Judge $5,500; there had been retained in the hands of the count]1, on account of work done by Judge, $1,000; there had been paid to Lewis, Heintze and Byrne $30,559; the total payments, therefore, were $36,'059, which, deducted from the contract price of $46,400, left, all told, in the hands of the county $10,341.
    It is proven that the contracts made by Heintze, Lewis and Byrne to complete the work called for the aggregate payment of $37,864.
    The contractor, Judge, died in the month of September, 1903, and his widow was his executrix. On the 16th day of December, 1903, she executed a release to the board of chosen freeholders of the county of Hudson
    “of and from all claim and demand which I,- executrix as aforesaid, or said Gregory A. Judge in his lifetime might have had, now have, or ever can have for or by reason of a contract made between the said Gregory A. Judge and the said board of chosen freeholders of the county of Hudson for the erection' of additions to the asylum of the said board of freeholders at Secaucus, Hudson county. Said contract bears date the -day of-, one thousand nine hundred and two, and the said work has been undertaken by Ferdinand Heintze, Daniel X. Lewis and Henry Byrne, sureties of the said Gregory A. Judge, for the performance of said work.”
    On the same day, in consideration of one dollar, she assigns unto Heintze, Lewis and Byrne the contract just described, reciting that they
    “having been the sureties of the said Gregory A. Judge for the faithful performance of the said contract, and they having undertaken the completion of the work.”

      The complainants each furnished material or labor to Judge during the time that he was prosecuting the contract, and each gave notices in accordance with'the statute.
    In addition to the lien claimed by the Union Stone Company, it also claims under an assignment in writing, given by Judge to it, dated September 4th, 1903, and served on the freeholders about September 11th, 1903.
    ■ The lien notices of the various parties were served between September 10th, 1903, and De'ceniber 4th of the same year. The order of priority of the lien claims is undisputed, and their proper order and the amounts claimed are as follows:

      First. Union Stone Company, $2,061.36.

      Second. Washburn Brothers Company, $2,325.80.

      Third. Yanderbeek & Sons Company, $630.86.
    The architect testified that the work' was now practically completed.

      Mr. Henry Fwald, for the Union Stone Company.

      Messrs. Cowles & Carey, for Washburn Brothers Company.

      Messrs. Bedle, Edwards & Thompson, for Yanderbeek & Sons Company.
    ' Messrs. Tennant & Haight, for Heintze, Lewis and Byrne.

      Mr. John J. Mulvaney, for the board of chosen freeholders of the county of Hudson.
   Garrison, Y. C.

(after stating facts).

The present Municipal Lien act is that of March 30th, 1892. P. L: l'892p. SWj Gen. Stat. p. 2078. Its title is

“An act to secure the payment of laborers, mechanics, merchants, traders and persons employed upon or furnishing materials toward the performing of any work in public improvements in cities, towns, townships and other municipalities in this state.”

It is contended.by the defendants in this suit that this statute does not apply because the public improvement for which' the contract was made in this suit was not made with a municipality, the insistment being that a county is not within the terms of the act.

The first section of the act provides for liens for persons doing labor or furnishing materials

“in pursuance of or in conformity with the terms of any contract for any public improvement made between any person or persons and any city, town, township or other municipality in this state authorized by law to make contracts for the making of any public improvement.”

The question to be determined is whether, by using the words “other municipality,” the legislature intended to, and did, include a county.

The act, as originally adopted in- this state (P. L. 1891 p. 418; Gen. SiaÉ. p. 2076), was copied from chapter 315 of the laws of 1878 of the State of New York. It applied only to cities. Subsequently the present act was passed, extending it to “towns, townships or other municipalities” in this state, and in New York, on the 16th of May, 1892, a similar extension was made. Hall Company v. Jersey City, 64 N. J. Eq. (19 Dick.) 768 (Court of Errors and Appeals, 1902).

The present act in New York (Laws of 1897 oh. 418 § 5) makes provisions for contracts with “the state or a municipal corporation,” and in the General Corporation act (Laws of 1892 oh. 687 § 8) the New York legislature defined a municipal corporation to include a “county, township, school district, village, city,” &c.

The- original meaning of a municipality was “a free town under the Eoman empire with powers of local self-government.”' Its precise use now would confine it to subordinate subdivisions of the state having powers of local self-government. 1 Bill. Mun. Corp. f4th ed.) 89 § 20.

Dillon, however,-points out, in the same section, after stating the proper signification of the word,

“But sometimes it is used in a broader sense that includes also public or quasi corporations, the principal purpose of whose creation, is as an instrumentality of the state, and not for the regulation of the local and special affairs of a compact community.”

A county is undoubtedly such an instrumentality. Since this broader and unprecise use of the term exists, it is necessary in each instance, in any jurisdiction where the courts or the legislature have not definitely settled the signification of the word, to determine the meaning intended by the legislative body using the word.

It is not amiss to note in this connection that in the early history of our province counties seem to have exercised certain functions of local government. P. L. 1692 p. 820 ch. 9 (Learn. & 8pi.).

In Paul v. Gloucester, 50 N. J. Law (21 Vr.) 585 (Court of Errors and Appeals, 1888), Mr. Justice Yan Syekel, in the prevailing opinion, recognizes a county as sufficiently a- corporation to be dealt with by the legislature as in the legislation then under review. In the minority opinion of Mr. Justice Reed, he holds that a county is not a municipal corporation, although, in the case of Frank v. Chosen Freeholders of Hudson, 39 N. J. Law (10 Vr.) 347 (Supreme Court, 1877), the last-named justice treated buildings being erected by the freeholders of Hudson as the property of a municipal corporation, 'and throughout the opinion thus refers to them.-

If the point to be decided was whether a county was a municipality in the sense that it had powers of local self-government, or that it might claim to exercise such powers under a grant in general terms to all municipalities, a very grave question would arise. But I do not conceive that that is the point to be dealt with in the case at hand. The sole inquiry, as I conceive it, in this case is whether the legislature in this act meant to include counties.

It is not questioned in this case that the legislature had power to enact this identical legislation with respect to counties, as well as with respect to the other governmental divisions specified by name, but the question is whether it has done so.

In the case of Doyle v. Bayonne, 54 N. J. Law (25 Vr.) 313 (Supreme Court, 1892), the court held that the words “other municipal boards or bodies” applied to the board of education of Bayonne; that the general words “other municipal boards,” following the particular designation of certain bodies, included all bodies or boards having municipal governmental functions, whether legislative or administrative. As the court there points out clearly, “the one thing to be ascertained is, What did the legislature mean ?”

A brief inspection of our legislation shows that in some instances the legislature has undoubtedly used the word “municipal” or “municipality” in speaking of counties, and so as to include the county.

Gen. Stat. p. 2172 § 288; P. L. 189k P-170: The first section provides “that the board of authority of any city, county * * * charged with the duty of lighting the streets, roads and public places of such municipality,” &e.

Gen. Stat. p. 2238 § WO; P. L. 1892 p. ¡Sí9: “An act to authorize any county, city, town or other municipality to convert coupon bonds,” &c.

Gen. Stat. p. 2287 § 1-5®; P. L. 1871 p. 92: “An act in relation to the expenditure of public money by municipal corporations.” The first section provides “that it shall not be lawful for the board of chosen freeholders,” &c.

Gen. Stat. p. 225k § 626; P. L. 1892 p. 250: In the preamble the members of the board of chosen freeholders are classed with “other municipal officers.”

The Municipal Lien act under consideration deals with “any city * * * or other municipality in this state authorized by law to make contracts for the making of any public improvements.” The county, in this case, was authorized by law to make a contract for a public, improvement.

The purpose of the legislation was to secure to a certain named class payment for work or materials furnished for public improvements in municipalities. I think it clear that the legislature meant to include in this legislation any public corporation whose functions included the making of public improvements, whether in any other sense of the word “municipality” the said public corporation could be properly included or not.

In two cases in the court of chancery and one in the court of errors and appeals this act has been applied to money arising out of a contract made with a county, and although there is no discussion of this question in any of the opinions, it may be held to have been decided sub sileniio that the act did apply. Garrison v. Borio, 61 N. J. Eq. (16 Dick.) 236 (Vice-Chancellor Grey, 1900); Norton v. Sinkhorn, 61 N. J. Eq. (16 Dick.) 508 (Vice-Chancellor Grey, 1901).

This last case was reversed in the court of errors and appeals (63 N. J. Bq. (18 Dick.) 313), but not on any point concerning the source of the money.

I therefore conclude that the act does apply.

The next question reqriiring consideration is, Who is entitled to the funds in the hands of the count}'', and to what extent?

The county at the present time has in hand an unexpended balance under this contract of $10,341. The original contract price was $46,400, and the county has paid out to Judge $5,500, and to Lewis, Heintze and Byrne $30,559, leaving the above balance as stated.

On behalf of the complainants it is insisted (1) that they are entitled to a lien upon all of the moneys in the hands of the county. Their contention under this head is that before the time they served their notices there was in the hands of the county $1,000 of retained percentage, which became subject to their liens when they served their notices, and that after the service of their notices the contract was carried out by the sureties on behalf of the contractor, and all sums "coming due thereunder were subject to their liens.

If this contention be not sustained, then they urge (2) that they are entitled, by reason of the service of their notices, to the $1,000 of retained percentage of the value of the work done by Judge, and, in addition, the difference between the actual amount expended by the sureties in completing the work and the remainder of the contract price. This difference is $2,036, arrived at in this way: Judge did $6,500 worth of work; the remainder of the contract price at the time of his default was therefore $39,900; the total cost to the sureties of the completion was $37,864, leaving the difference above stated.

On behalf of Iieintze, Lewis and Byrne it is contended that the complainants are without right or lien as to any of the funds in the hands of the county, (1) because these defendants are entitled to all of the contract price excepting the $5,500 actually paid to Judge up to the time that he abandoned the contract.

If this contention be not sustained, then they insist (2) that they are entitled to all of the remainder of the contract price after deducting the $6,500 of work actually done by Judge.

In support of their claim that all of the money earned under This contract, either by Judge or the sureties, is subject to their liens, the complainants rely upon the principle enunciated in the case of Pierson v. Haddonfield, 66 N. J. Eq. (21 Dick.) 180 (Vice-Chancellor Grey, 1904). In that case a contractor defaulted and his surety came forward and completed the work at a cost to him in excess of the remainder of the contract price. The court held that the surety took the place of the defaulting contractor, and in his stead performed his contract as his surety, and that the claims of the materialmen giving notice under the statute were superior to the right of the surety with respect to all work theretofore done by the contractor and not paid to him, and also with respect to the retained percentage of the value of the work done by the contractor. The surety in this case received partial payments for work done in the completion of the contract at the prices agreed to be paid under the contract. He claimed a right of subrogation, but the court denied this right, basing its decision upon the effect and operation of the Municipal Lien act, although he discusses the failure of the surety to show that he had not other funds or securities from the contractor which would secure him against loss. In the view of the learned judge writing that opinion, the surety had no right of subrogation, and the fund in the hands of the county, after the notices, whether earned by the work of the original contractor or the surety in completing the contract, would be subject to the liens.

If that principle were applied in this case at bar, the contention of the complainants would be sustained, and all of the money not actually paid to Judge by the county would be subject to the liens of the claimants to the amount necessary to pay the same.

The sureties here rely, for their contention that they are entitled to all of the contract price excepting that actually paid to Judge, upon the reasoning of the court in the case of St. Peter’s Catholic Church v. Van Note, 66 N. J. Eq. (21 Dick.) 78 (Vice-Chancellor Reed; 1904) In this case, after the contractor abandoned, his sureties came forward and finished. There was a retained percentage in the hands of the owner at the time that notices were served by sub-contractors of the original contractor. After the completion of the work by the sureties there were notices filed by sub-contractors of the sureties.

The sureties in that case contended that they completed as the agents of the owner. The lien claimants of the original contractor contended that the sureties completed for the original contractor, and that all of the money earned, together with the retained percentage of the value of the work done by the original contractor, was subject to their notices or liens. The cost to the sureties of completion was in excess of the remainder of the contract price at the time of the original contractor’s abandonment and the retained percentage. The court held that the sureties did not complete as the agents of the owner, nor did they take the place of the contractor. In the course of his opinion he says: “Nor can the contractor claim any portion of the contract price by reason of what the sureties did. The notices and demands of the materialmen and laborers never reached the $1,632, being the uncertified amount of the contract price, and the sureties are entitled to this sum. * * * I also think that the right of the sureties is superior to the claims of the materialmen and laborers. The claims of the latter reach only such money as was due at the time of the several demands and notices, or thereafter became due to the contractors. Nothing, aside from what was already paid, became due, unless the theory is adopted that the sureties were working for the contractors, and therefore, upon completion of the building by them, a debt accrued to the contractors as if they had completed the work. But, as already observed, the sureties were not working for the contractors.”

The result was that the court awarded to the sureties the retained percentage of the value of the work done by the original. contractor, together with the balance of the contract price.

The sureties in the case at bar insist that if the reasoning of this case is applied they must be held not to have been working for'the contractor in completing the building, and must be held to be entitled to the retained percentage and to the remainder of the contract price.

I do not think that this latter argument is sound. Nor can I agree with the doctrine of the ease of Pierson v. Haddonfield, supra. In the ease of St. Peter’s Catholic Church v. Van Note, supra, the court was dealing with a situation in which the sureties had been put to a greater cost than the remainder of the contract price, plus the retained percentage, and the court held that, upon performance of the contract, they became entitled to the security held by the owner as far as it was necessary to reim-burse them for their necessary outlay. And this I think is sound. I do not think it is properly inferable from-this latter case that the court intended by any language used to imply that the sureties would be entitled to the balance of the contract price, or to the retained percentage, if they did not need the same to requite them for their expenditure in completing the contract. This is the unsoundness of the argument of the sureties in the case at bar.

By becoming surety upon a bond to the owner that the contractor will faithfully perform the. contract, the surety is under no obligation to the contractor. The surety’s obligation is that the contractor will perform the work; that if he does not, and the surety does not, then the surety will pay such damages to the owner as he may suffer by reason of the default.

Upon a default by the contractor, the surety has the privilege of coming forward and completing the work. In doing so he is not acting for the contractor, nor in the right of the contractor. He is acting in his own right, which is to perform the obligation of his contract with the owner.

“The scope of the right of subrogation consists in the immediate transfer, by operation of law, to the promisor in suretyship of all the rights of the creditor against the principal whenever the promisor pays the debt or satisfies the obligation.” Stearns L. Sure. 1¡S$ § $61. “This right of subrogation is independent of any agreement, and rests upon principles of natural justice and equity.” Stearns L. Sure. 1¡03.

When the sureties, therefore, in the case at bar came forward to fulfil] the obligation and perform the contract, they did so in their own right by reason of the privilege of suretyship so to do, and they were entitled to subrogation to all of the rights of the owner against the contractor to the extent necessary to reimburse them for their necessary outlay, but no further. Stearns L. Sure. ¡51/¡8 § -SW; St. Peter’s Catholic Church v. Van Note, supra ; Prairie State National Bank v. United States, 164 U. S. 227; 41 L. Ed. 412; First National Bank v. City Trust, &c., Co., 114 Fed. Rep. 529.

This right relates back to the making of the contract between the owner and the original contractor, for the faithful performance of which the contract of suretyship was given. (See cases last cited.)

In the case at bar the cost to the sureties for completing the work did not equal the remainder of the contract price at the time of the original contractor’s abandonment. They have not, therefore, suffered any loss, and equity will not extend the doctrine of subrogation further than to protect them from loss.

I have not dealt in greater detail with the facts of this case because I do not deem it necessary to do so. It is clear, I think, that the owner did not, under the clause of the contract per-' mitting him to do so, let a new contract to a new contractor, the effect of which, had he dono so, would, of course, have been to have cut off all rights of the creditors of the original contractor with respect to the remainder of the contract price unearned at the time of the abandonment. The abandonment took place in August or September of 1903. The sureties immediately took up the question of completing the contract. They were authorized by the owner, by the resolution of December 3d, 1903, to do so. There was a release obtained from the executrix of the original contractor, and there was also an assignment of the contract from her to the sureties.

I find from all the facts that what the sureties did was to come forward, by reason of their being sureties, and complete the contract for the purpose of fulfilling their obligation to the owner so to do, or to suffer loss if they did not. I therefore find that the obtaining of the release, on the one hand, did not act as a determination of that contract any more than 'the obtaining of the assignment made them the agents or assignees of the original contractor in finishing.

It is incumbent to determine the intention of the parties as gathered from all the facts, and not to select a single factor as determinative. That which I think harmonizes all the facts is the finding heretofore stated.

The result is that I find there is in the hands of the county funds amounting to $3,036 subject to the liens of the claimants. This sum is made up of the retained percentage of $1,000 and the $2,036 difference between the actual cost of completion and the remainder of the contract price. The order and priority of the claims have been heretofore stated, and since there is not sufficient to pay the first two, it is not necessary at all to consider the third.

The first claimant, the Union Stone Company, is entitled to payment in full, and the second claimant, Washburn Brothers Companjq to the remainder of the money after the prior payment is deducted.

There is some question about one or two items of the claim of the first claimant, but since it had an assignment for the same amount as its claim, which assignment seems to be valid and without objection, I have not gone into detail as to this matter.

I will advise a decree in accordance with the foregoing conclusions.