author: G-eey, Y. C.

text:
    Anna C. Bristol and Samuel A. Bristol, her husband, v. Amory T. Skerry et al.
    [Filed February 16th, 1903.]
    1. Since the passage of section 11 of the Married Woman’s act (Gen. Stat. p. 2014 § 11) i a wife may bring a suit for the protection of her property, in her own name, without joining her husband as a party to the suit. This statute enables the wife to sue as a feme sole, but does not require her to do so. If she desires to make her husband a party to the suit she must follow the mode of procedure observed before the adoption of section 11 and sue by her next friend, making her husband a defendant.
    2. A husband has an equity in lands to which his wife holds title, which this court will recognize. He has power, by refusing to join in her deed, to prevent her from conveying her lands, and if a child be born during .the coverture and the husband survives the wife, he will take an estate by the curtesy (complete) in lands whereof she died seized of an estate of inheritance.
    3. Having this equity he is a proper party to a suit brought by the wife to protect her lands. It is, however, misjoinder to make him co-complainant with his wife. If he is made a party, it should be as defendant.
    On demurrer to bill for misjoinder.

      Mr. William, A. Stryker, for the demurrant.

      Messrs. Smith & Brady, for the complainant.
   G-eey, Y. C.

The bill in this ease is filed by Anna C. Bristol and Samuel A., her husband, alleging that Anna is the sole owner in fee-simple of a farm in Hunterdon county. The bill charges that the defendants, by increasing the height of their mill dam, have caused the natural flow of a river to be checked, and the waters thereof to.flow back upon the lands of the complainant wife, to the continuous and permanent injury of her lands. The defendants demur to the bill because the husband, Samuel A. Bristol, is made a party complainant, when it does not appear anywhere in the bill that he has any interest in the matters in dispute. This is the sole ground upon which the demurrer was argued.

. Before the passage of the Married Woman’s act of 1852 a married woman might have been interested in lands in two different ways. She might háve had the legal title to land come to her by deed, devise or descent. In land of which his wife became so seized of an estate of inheritance, the husband was instantly vested of an estate by the curtesy initiate. The wife’s property became liable to be taken, for the payment of the husband’s debts, and also to his disposition, for he could convey his wife’s lands, at least, during the coverture, and in ease a child was born, and the husband survived the wife, during his life.

The obvious inequity of this situation led to the creation of a peculiar equitable interest for the protection of the wife from the distresses occasioned by the rigid rules of the common law. This was the other way in which a wife might, before the act of 1852, have an interest in lands. This interest originated by marriage settlement, by deed .or by devise. The title to the land was held by a trustee for the benefit and separate use of the wife. Powers were created enabling her, by her individual act, without her husband, to deal with the land thus held for her úse. She was deemed to be, with respect to such property, a feme sole. Her interest in the lands so set apart for her was controlled, not by the common law applicable to legal titles, but by the terms of the trust which gave it for her benefit. It was called her separate estate. Her own action taken in protection of such property, .and also attacks made upon it by others, were within the cognizance of the equity courts. Tullett v. Armstrong, 1 Beav. 21. A caustic review of the origin and growth of this separate estate of the wife, from the point of view of a common law jurist, may be found in the opinion of Chief-Justice Beasley, speaking for the court of errors and appeals, in the case of Perkins v. Elliott, 8 C. E. Gr. 527.

While this was the state of the law, a husband, who might have’ had an estate by the curtesy initiate, in lands wherein his wife held title, was held to be a necessary party to- any bill filed respecting lands which were the separate estate of the wife. The mode of procedure then was, that the wife, when seeking to protect her separate property, sued by her next friend, making her husband a party defendant, in order that he might contest, if he wished, her claim that the lands in question were in fact her separate property, and show her claim to be incompatible with his marital rights, for she might have held the title> and the husband would then have had a curtesy. Story Eq. Pl. § 63; Sigel v. Phelps, 7 Sim. 239; Wake v. Parker, 2 Keen 59.

Sir John Leach, in Smith v. Myers, 3 Mad. 475, in a suit ■where a wife had a separate estate, and had sued, naming her husband as next friend, granted a motion made by the plaintiff to strike out the name of a husband as next friend and malee him a co-plaintiff, declaring that although the wife’s claim to separate property was against jus mariti, yet the husband, by joining as co'-plaintiff, would admit the statement in the bill that the property in question was the separate property of the wife, and that this would answer all the purposes of making him a defendant. Under the earlier cases a bill filed by husband and wife as co-complainants, was held to be the suit of the husband alone, and the wife was not bound by any of the allegations in such a bill in any future litigation. See, in Johnson v. Vail, 1 McCart. 426 (1862), and cases cited, an interesting discussion of the subject by Chancellor Green.

In 1852 the Married Woman’s act destroyed the common law estate of tenancy by the curtesy initiate. Porch v. Fries, 3 C. E. Gr. 208 (1867). But as it gave the wife no power to dispose of her lands without the husband’s joining in her deed, the husband’s estate by the curtesy might still arise, upon her death, seized of an estate of inheritance, a child having been born of the marriage. Porch v. Fries, 3 C. E. Gr. 209; Naylor v. Field, 5 Dutch. 292 (1861).

Since the passage of the Married Woman’s act of 1852, making lands, the legal title to which stands in the wife’s name, free from the husband’s control or debts, such property has also come to be designated the “separate estate,” of the wife.

Although the Married Woman’s act of 1852 destroyed the husband’s estate 'by the curtesy initiate, in lands wherein his wife held title, he yet has control over her disposition of those lands, for she has no power to convey them unless he joins in her deed, and he still has a possibility that a child may be born of the marriage, and that he may survive his wife and thus become seized of an estate by the curtesy complete. Since the passage of that act, the husband has been declared to be a necessary party to a suit begun by a wife through a next friend for her separate estate. Objection was made to the non-joinder of the husband, and it was declared to be well taken (Tunnard v. Littell, 8 C. E. Gr. 269 (1872), following Johnson v. Vail, ubi supra), holding that the husband is a necessary defendant. The husband’s interest, even in the distinctly separate estate of the •wife, was in these cases held to be sufficient to make the wife’s suit defective unless he was made a party defendant.

In Johnson v. Vail the husband appeared as next friend of the wife, but was not joined as a party in the bill, either as complainant or defendant. The case was presented on an order to show cause why an injunction should not issue, &c. It was held that although the husband was a necessary party, it would be a, misjoinder to malee him a plaintiff, and that he must therefore be made a defendant. In Barrett v. Doughty, 10 C. E. Gr. 379 (1874) the bill was filed by husband and wife as co-complainants, a demurrer ore tenus, because of the misjoinder of the husband as complainant, was allowed, and it was ordered that he be made a defendant. In Tantum v. Coleman, 11 C. E. Gr. 131 (1875), to a bill filed by a wife, a plea setting up the coverture and the non-joinder of the husband as complainant was held to be bad, because he was neither a necessary nor a proper party complainant with her. In Paulison v. Van Iderstine, 1 Stew. Eq. 310 (1877), a bill by husband and wife as co-complainants, filed in respect to the wife’s separate estate, was held to be a misjoinder.

The uniform course of decision up to the year 1817, in cases such as that presently under consideration, declares that the husband was a necessary party, but that it was a misjoinder to make him a co-complainant with his wife. He must be made a defendant.

While this was the state of the law the revision of the- Married Woman’s act (Rev. 1877 p. 638 § 11, now Gen. Stat. p. 2014 § 11) was enacted. This statute enables a married woman to maintain an action in her own name without joining her husband therein, for the recovery of all damages done to her separate property, and gives her the same remedy for the protection of such property as if she were an unmarried woman, and declares that in any proceedings it should be sufficient to allege such property to- be her property. Since this statute, it has been held that the husband is not a necessary party to a suit brought by a wife to protect her property, and demurrers to bills of complaint filed by the wife because.of the non-joinder of her husband as a party in such suits have been overruled. Castner v. Sliker, 16 Stew. Eq. 9 (1887); Young v. Young, 18 Stew. Eq. 41 (1889).

The reasons for holding the association of the husband with the wife as co-complainant to be misjoinder, have been somewhat shaken by the effect of the statute of 1852, which destroyed the husband’s estate by the curtesy initiate in lands to which the wife held title, and thus left him less ground of dispute with his wife as to whether the lands affected by her suit were in fact her separate property, held in trust for her, or lands to which she held title. The cases of Johnson v. Vail, Barrett v. Doughty and Paulison v. Van Iderstine, ubi supra, decided after the act of 1852, however, all hold that it is a misjoinder to associate the husband as co-complainant with the wife in a suit to protect lands owned by her.

■ The grant of power to the wife to sue alone, without joining her husband in her suit, given by section 11 of the revision of 1877 (now Gen. Stat. p. 2014 § 11), if acted upon by the wife, by suing alone, would seem to relieve the procedure from the presumption above referred to, which held .a suit brought by husband and wife to be the suit of the husband only and not binding on the wife.

The power given to the wife by section 11 is, however, a mere enabling act. She is empowered, but not required, to sue in her own name, without making her husband a party. If she sues without him she may do so in her own name as sole complainant, under the power given her by section 11. If she desires to make him a party she must follow the practice established by -the modes of procedure in such cases before the enactment of section 11, and sue by her next friend, making her husband a party-defendant.

It is claimed by the demurrant that the husband has no interest in the subject-matter of the suit, and that he cannot properly be a party to it.. Tins view cannot be accepted. The statutes of 1852 and 1871 did not deprive the husband of all interest in his wife’s property. They secured its enjoyment to her and enabled her to sue as a feme sole to protect it, but he still has an equity which, this court will recognize, and which makes him, though not a necessary, yet a proper party to his wife’s suit. He still has power to prevent his wife from conveying her lands, for her deed made without his joining in it is a nullity. If a child he born during the coverture, and the husband survives his wife, he will yet take in them an estate by the curtesy complete. If his wife succeeds in this suit the permanent value of her lands, and consequently of the husband’s possible interest, will be increased. If she fails, the value of the husband’s equity may be lessened. Equity has recognized his interest as worthy of its protection. In Speakman v. Tatem, 3 Dick. Ch. Rep. 136 (affirmed on appeal), a husband had joined a wife in conveying her lands to a trustee. His marital right in her real estate thus conveyed was held to form a sufficient consideration for a post-nuptial settlement, by which an interest was secured to the husband, and his rights under that settlement were enforced.

The practice since the Married Woman’s act of 1852 seems to be established, that in a suit for the protection of a married woman’s property, her husband should not be joined with her as a co-complainant. Johnson v. Vail, and cases above cited.

The husband is not a necessary party to such a suit since the revision of 1877, but he is a proper party defendant by reason of his interest in the subject-mátter of the suit.

The demurrer must therefore be sustained on the ground of the misjoinder of the husband as co-complainant with his wife, with costs to the defendant, and leave to the complainant wife to amend by striking out the name of the husband as complainant. If she wishes to make her husband a party it must be as a defendant, and in such ease the suit must be in the name of her next friend as complainant.


source: Caselaw Access Project

author: Grey, Y. C.

license: Public Domain

text:
    Salina A. Charlton v. The Columbia Real Estate Company.
    [Filed February 21st, 1903.]
    1. An agreement made and signed by the agent of a corporation provided that a lease of the “company’s lands should be given for a term of ten years, and at the same time a receipt was signed by the agent for $100 “on account of agreement for lease for which details are to be settled on.” An unsigned draft of a lease was afterwards obtained to be drawn by the corporation owner, and sent to the intending lessee. This draft contained terms and details, which were not contained or referred to in either the signed agreement or receipt.—Held, the signed agreement and receipt did not definitely settle the terms of the proposed lease. The unsigned draft of lease contained terms different from those contained in the signed agreement and receipt. The parties did not come to any concluded contract between them.
    2. The agreement intended to be made by the parties contemplated a letting for the lands for ten years. Such an agreement, even if actually concluded, is, if not signed by the lessor and lessee, controlled by the statute of frauds, and has only the force of a lease at will, and will not support a decree that the owner shall execute and deliver a lease of the land for a ten years’ term.
    3. No possession of the lands was taken by the proposed lessee. No improvements were made thereon by her. She expended some money in getting from an architect plans for proposed improvements, and paid the $100 named in the receipt, which money was returned to her. These incidents of the intended contract were not such acts of partial performance by the proposed lessee as entitle her to a decree for specific performance. If she has any right to relief, the damages recoverable at law will afford an adequate remedy.
    On bill, answer, replication and proofs.
    Tbe bill in this case is filed to compel the specific performance of an agreement alleged by the complainant to have béen made by the defendant company for the lease, under special terms, of a lot of land situate in Atlantic City.
    The complainant alleges that, by a contract made between herself and the defendant company, the latter agreed to lease to the complainant the lot of land in question, with the privilege of a fifteen-foot entranceway to the demised premises, and the use of the doors across the entranceway, for the period of ten years, from June 16th, 1901, at the annual rental of $1,300; that it was expressly agreed that, at the expiration of the lease, the defendant company should purchase all improvements erected on the premises by the complainant, at a price to be fixed by three arbitrators, and that, in the meantime, said buildings and improvements should stand as security for the rent to become due during the term; that she paid $100 to the defendant company on account of the rent, for which the defendant gave her a receipt; that she had the privilege of paying the rent in cash or of furnishing' security for the same, at her pleasure; that, in conformity with the agreement, she delivered to the attorney of the defendant company two promissory notes, one for $500, payable in two months from date, and one for $6,000, payable in three months from date, both endorsed by a citizen of Atlantic City of large wealth and good financial standing, and that, at the same time, she delivered to him an agreement and lease, which had been prepared under the directions of the defendant company, which agreement was executed by her. The promissory notes and the agreement executed by her, were, she alleges, retained from the 31st of May, 1901, until the 1st of June, when they were returned to her, the company having refused to accept the suretyship of the endorser. The refusal of this security and to deliver possession, the complainant alleges, were due to the fact that the defendant company had 'found another applicant for the premises at a higher rental.
    The complainant further avers that she subsequently tendered to the attorney of the defendant company $1,100, the balance of the rent for the first year, and demanded possession of the property, and that the attorney declined to receive the money, telling her he had no authority, and sent her to the agent of the defendant company; that, on the 3d day of July, 1901, she tendered the $1,100 to the agent of the defendant company, and demanded possession of the property, which he refused. She alleges that she then caused a notice to be served on the defendant company, on July 10th, 1901, demanding possession, stating that she would sue for specific performance if it was refused to her, and notifying the defendant company that the $1,100 rent would be paid whenever they were willing to accept it, which offer was again refused.
    The complainant tenders herself ready to pay the rent reserved by the agreement, and prays that the defendant may be decreed specifically to perform the agreement set forth in the bill, and execute the lease which the defendant company had prepared and which is already signed by the complainant, and to deliver possession of the property to the complainant, and for further relief.
    The Columbia Real Estate Company is the sole defendant. It files its answer, denying all the allegations in the bill, except those specifically in the answer admitted. The defendant company admits that negotiations were opened between the parties, looking towards the leasing of the property in question, and that a duplicate copy of a proposed lease was prepared, but avers that it was never executed by the defendant company, nor delivered. The defendant admits that when the negotiations for a lease were begun, the complainant paid $100, which the defendant says it tendered back to the complainant on the 2d day of July, 1901, when it appeared she was unable to carry into effect the agreement for leasing, and that all negotiations between the parties were then and there declared to be off. The defendant avers that, at the time of the first negotiations, the rental-money was agreed to be paid in cash; that complainant asked the defendant to accept notes, which the defendant consented to do if secured by a satisfactory endorser, which the defendant insists was not furnished. The defendant denies the tender of $1,100 on July 1st, 1901, and avers that the complainant neglected and refused to pay the balance of the rental-money, and further avers that the defendant company, before the alleged tender, handed back to the complainant the $100 which had been paid, and notified complainant of defendant’s intention to proceed no further in the matter of leasing. The defendant further says that it has leased the premises to other parties, who are now tenants of defendant, actually in the possession of the premises.
    Issue was joined on these pleadings, and the cause came to final hearing.

      Mr. Allen B. Bn&icott, for the complainant.

      Mr. George A. Bourgeois, for the -defendant.
   Grey, Y. C.

The bill seeks the specific performance of an alleged agreement for the leasing, for ten years, of a lot of land situate in Atlantic City, admittedly owned by the defendant, the Columbia Real Estate Company. The agreement is not alleged, in the bill, to have been in writing. The defence is—first, that no agreement between the parties touching the alleged leasing was ever finally concluded; it is admitted that negotiations were opened and that they had made some progress towards an agreement, but it is denied that any concluded contract was made between the parties; secondly, the defendant insists as the claimed agreement is for a lease for a ten-year term, that it must have been evidenced by a writing, signed by the lessor, or by his lawfully-authorized agent, and that no- such writing has been shown, &d, nor any equitable excuse for its non-production.

The statute of frauds, in its first section, prescribes the effect which shall be given to leases of land for a longer period than three years when they are not put in writing, signed by the parties so making or creating the same, or their agents thereunto lawfully authorized by writing. The phrasing of this clause of the statute is in the words following:

“That all leases, estates, interests oí freehold or term of years, or any uncertain interests of, in to or out of any messuages, lands, tenements or hereditaments, made or created, or hereafter to be made or created, by livery and seisin only, or by parol and not put in writing, and signed by the parties so making or creating the same, or their agents thereunto lawfully authorized by writing, shall have the force and effect of leases or estates at will only, and shall not, either in law or equity, be deemed or taken to have any other or greater force or effect any consideration for making any such parol leases or estates notwithstanding except, nevertheless, all leases not exceeding the term of three years from the making thereof.” Gen. Stat. p. 1602 § 1.

The bill of complaint does not allege that the contract whereby the defendant company “agreed to lease” was in writing. The frame of the bill shows that the agreement that a lease should be given, and the lease itself, were, in the contemplation of the parties, several and distinct transactions. The proofs also show that there were negotiations between the parties preliminary to an intended leasing. These preliminaries are, to an -imperfect extent, evidenced by writings. The following are copies of these preliminary writings:

“Exhibit C 2.
“Agreement made this seventh day of May between Columbia Real Estate Co. of the first part & Mrs. Charlton, of Atlantic City of the second part. AVitnesseth, that the party of the first part will make a lease for ten years of a certain building on. their ground in rear of stores to contain about eighty feet in width by about one hundred- feet in depth with a fourteen foot entrance from boardwalk, to consideration to be a rental of twelve hundred dol. per annum payable yearly in advance, lease to date from .Tune 15th, 1901. The party of the first part to be put to no expense whatever in this matter, and security to be given for the rent.
“Columbia Real Estate Co.,
“AVitnesseth by “By H. G. Bergman, Agt.
“Ida T. Atkinson. ' “S. A. Charlton.”
“Exhibit C 3.
“Received Atlantic City, May 7th, 1901, of Mrs. S. A. Charlton, one hundred dol. on acc. of agreement for lease to be made to Mrs. Charlton, for which details are to be settled on.
“Columbia Real Estate Co.,
“By IT. G. Bergman, Agt.”

These papers were signed and passed at the same time from the defendant’s company’s agent to- the complainant. As they relate to the same transaction, they must be deemed to be parts of one instrument. Exhibit G £ is a memorandum of an agreement for a lease. Exhibit G 8 is a receipt for $100 on account of that agreement.

The effect of these two writings shows, on the face of them, that the parties, in their negotiations, had not, by these writings, yet arrived at any contract, the terms of which had been definitely agreed upon between them. The receipt, in express words, recognizes this in the phrase, referring to the lease, “for which details are to be settled on.” The proof shows that when these memoranda of May 7th were signed, the details of the lease had not yet been finally “settled on,” and were not expressed' in those agreements.- Plans for buildings to be erected by- the lessee, had been submitted and approved, but certain dimensions and angles of the premises which might call for a survey, had not yet been ascertained, and a method of compensating the proposed lessee for her expenditures in improvements, by paying her a price to be fixed by an arbitrator, was yet under discussion, as details of the proposed lease which were j^et to be settled. None of these incidents of the proposed lease were set out in the written memoranda of May 7th.

The two memoranda of May 7th are the only writings signed by or for the defendant company. These instruments themselves, as well as the evidence of the negotiations of the parties as to details to- be settled, show that, when they were created, no .concluded contract had yet been made. No other written papers of any kind was ever “signed by the parties making or creating the same, or by their agents thereunto lawfully authorized in writing,” &e.

A comparison of the contract of lease which the bill seeks to have decreed to be made, with these two- writings, also shows that the complainant is not asking for the making of a lease, the terms of which 'are set forth in these two writings, but for quite a different instrument. The bill of complaint prays that the defendant company may be decreed specifically to perform the agreement therein set forth. The agreement for a lease set forth in the bill contains a number of terms, dealing with matters of substance, which are not in any way referred to in the previous written memoranda.

The bill of complaint demands a lease which shall convey “the use of the doors across the entranceway,” and which shall oblige the defendant company to “purchase all improvements erected on the premises by- the complainant at a price to be fixed by three arbitrators, and that, in the meantime, the said buildings and improvements should stand as security for the rent to become due during the term;” that the complainant should have “the privilege of pajung the rent in cash, or of furnishing security for the same, at her pleasure.”

None of these incidents, imposing obligations upon the defendant company of great importance (some of which are essentially part of the lease), are included within the two writings signed by the defendant’s company’s agent, and above recited. Nowhere, either in pleadings, evidence or argument, is it intimated that the complainant would, in this cause, accept a decree for the making of a lease which did not contain these incidents; on the contrary, it is insisted that the decree shall be for a lease on these terms. We must therefore look elsewhere than to the writings signed by the defendant company to find the terms of the lease which the complainant insists the defendant is bound to make.

These terms are expressed in a prepared draft of a lease, which was never executed by the defendant company, but a copy of which, having been drawn in counterpart, was sent, unsigned, to the complainant, the duplicate being retained by the defendant company. At this stage of the negotiations differences arose between the parties as to security offered for the rent by the complainant. The prepared draft was never signed and delivered by the lessor. The complainant was told that the “negotiations were all off,” and that the defendant’s agent could not sign the lease. The $100 which the complainant had paid was sent back to her.

The complainant offered in evidence the copy of this unsigned draft of a lease.which was sent to her, and it has been marked Exhibit G 1. The complainant (proposed lessee) has signed it, but the defendant (proposed lessor) has not. A cursory examination of this draft of lease affords additional proof that the previous written memoranda of May 7th, 1901, signed by the defendant company, did not express a concluded contract between the parties, and that, after they had been made, there were further negotiations, or, if no further negotiations, yet there were terms of the letting already agreed upon which were not included in the written memoranda, though both parties recognized their essentiality as component parts of the lease. These were the “details to be settled on,” which were referred to* in the memorandum receipt. It is this proposed, but unexecuted, lease which the complainant insists, by her bilj of complaint, was agreed to be given as a lease of the premises in question.

This unexecuted paper contains all the above-recited terms as to the use of doors; and obliging the defendant lessor to purchase improvements at an arbitrated price, and making them, meanwhile, stand as security for the rent, and giving the lessee the privilege of paying the rent in cash, or of furnishing security therefor, at her pleasure.

This unexecuted draft of lease has of itself no efficacy as the concluded agreement of the parties, becauseit was never executed by the lessor. The parties got into a dispute before that was done about the character of the security for the rent, and the proposed lease was declared off, as above -stated.

Nothing in all the proofs shows that there ever was a time when, as to each incident of the proposed contract, the parties, came to be 'of the same mind, and finally- contracted, each with the other, that such a lease should be made.

The court of appeals declared, in the case of Brown v. Brown, 6 Stew. Eq. 650, that, when specific performance is sought, the terms of the contract must have been completely determined and definitely ascertained between the parties. If it be doubtful whether the contract was finally closed, equity will not interfere.

The utmost effect that can be ascribed to the two memoranda of May 7th is, that they amounted to an agreement to enter upon an agreement, upon terms to be afterwards settled between the parties. On the face of the receipt of that date is an express declaration that details of the lease were yet to be settled. Lord Wensleydale, in Ridgway v. Wharton, 6 H. L. Cas. 305, declares such an agreement to- be a contradiction in terms, and that it is absurd to say that one enters into an agreement until the terms of that agreement are settled.

Leaving the effect of the written memoranda of May 7th, which were signed by the defendant company only, all the- proofs show that it was always in the contemplation -and intent of both parties that a written lease of some sort should be executed by the complainant as well as the -defendant which should contain clauses severally binding upon each of them. It was the execution of this instrument, by the signature of both parties, and its delivery, which it was intended should conclude the bargaining. This appears by the fact that the draft of the proposed lease contained various terms not included in the previous written memorandum, but imposing serious obligations upon the parties. These were the details which, when the memorandum of May 7th was made, were yet to be settled on. This draft of lease never was executed and delivered by the lessor. There never was any complete determination and definite ascertainment of the terms of the contract.

A further objection by defendant is that the unexecuted draft of lease is obnoxious to the statute of frauds as a basis for a decree for specific performance such as is here prayed. This draft of lease purports to convey a ten-year term in lands. It is not in writing signed by or for the party making it (the lessor). The statute prescribes that such an agreement, even if finally-concluded bétween the parties, but not expressed in a signed writing, shall have only the force and effect of a lease at will. This the complainant is not willing to accept. She asks that she be decreed to have- a lease for a ten-year term, with all the attending advantages of privilege to -erect improvements, which the defendant company shall be obliged to pay for at an arbitrated price. The statute is a bar to any such decree.

The written memoranda being ambiguous in their phrasing, considerable latitude has been allowed, introducing parol proof as to the attending negotiations of the parties, in order to ascertain what was meant by “details to be settled on.” Little or no proof has been offered showing that the complainant has done anything in part performance of what she claims was a concluded contract, partly in parol. She paid $100, which has been returned to her. She has since tendered or offered the first year’s rental, but this tender was based on the assumption that sh-e had a concluded and binding contract with the defendant. In this she was mistaken, as is above shown. She never entered into possession of the premises, nor made any of the contemplated improvements. She did expend some money to get plans from an architect. Hone of these incidents constitute such a part performance of a contract as entitled the complainant to the favorable consideration of this court by a decree for specific performance. For all loss or inconvenience she may have suffered, she may, if she has any right, be fully and adequately compensated by an action at law for damages.

There is an additional objection which this court ought to consider on this application for relief by specific performance. It appears, in a letter of the complainant’s solicitor, offered in evidence for complainant, that, before this suit was brought, he was notified that the defendant company had rented the premises in dispute to other parties. There’ is other proof containing like suggestion. No such other persons have been brought in as defendants in this cause. It may be that such persons are bona fide holders, without notice of the alleged equity of the complainant, so that a decree in this suit against the defendant company for specific performance may be of no avail against such other parties.

If this condition should appear, this court would refuse specific performance, even if, as against the defendant company, the complainant was shown to' be entitled to it. Johnson v. Hubbell, 2 Stock. 332.

Upon the whole case, the complainant’s bill should be dismissed, with costs.


text:
    The George Jonas Glass Company v. The Glassblowers’ Association of the United States and Canada et al.
    [Filed March 16th, 1903.]
    Where, on an order to show cause why an injunction should not be granted against strikers and the labor union, restraining picketing and illegal interference with complainant’s employes pending suit for permanent relief, the only showing by defendants consisted of a large number of affidavits, written on printed blank forms—the spaces being filled with the names of the particular answering defendants—which consisted merely of a denial of the facts alleged in the bill and allegations that the strike which was in progress was being conducted without violence or unlawful interference with complainant’s business, and it did not appear that the issuance of the injunction until final hearing would result in any hardship to defendants, the injunction would be granted.
    On bill and affidavits, answer and affidavits and order to show cause for injunction, &c.

      Messrs. Hampton & Fithian and Mr. John W. Harding, for the complainant.

      Mr. Howard L. Miller and Mr. John W. Wescott, for the defendants.
   Grey, Y. C.

(orally).

In this case an order was made that the defendants show canse why an injunction should not issue according to the prayer of the bill of complaint. Accompanying that order an ad interim stay was allowed, restraining certain-named defendants from entering, or attempting to enter, complainant’s premises, consisting of its glass manufacturing plant at Minotola, in the township of Buena Yista, county of Atlantic and State of New Jersey, and from obstructing, or attempting to obstruct, the free passage of any employe or employes of complainant in going to and from complainant’s premises; from in anywise threatening or using any coercive language or coercion whatever, in order to induce any employe of complainant not to work for complainant, and from in anywise interfering with or annoying, by acts or words, any such employe of complainant, against his will, in going to and from or while engaged in such employment, and from entering its grounds and premises for the purpose of interfering with, hindering or obstructing its business; and from compelling or inducing, or attempting to compel or induce, by threats, intimidation, annoying language or acts of force and violence, any of the employes of complainant to refuse to or fail to perform their duties as such employes; and from compelling or inducing, or attempting to compel or induce, by threats, intimidation, annoying language or acts, force or violence, any of the employes of complainant to leave the service of complainant; and from preventing, or attempting to prevent, any person or persons, by threats, intimidation, annoying language or acts, force or violence from entering the service of the complainant; and from congregating at or near the said premises of complainant, or in the public highway, for the purpose of intimidating complainant’s employes or preventing them from rendering their sendees to complainant, and from indueing, by the payment of money, or by promises to pay money, or coercing by threats, annoying language or acts, said employes to break their contracts of employment with complainant and to leave its employment, and from collecting either singly or in combination with others in and about the approaches to complainant’s said plant or in the public highway, for the purpose of picketing or paroling or guarding the streets, highways, gates and approaches to complainant’s said property for the purpose of intimidating or coercing any of the employes of the complainant in going to and from their work, and the said factory oí the complainant, and from congregating at or about any place at Minotola for the purpose of intimidating, threatening or coercing any person or persons seeking employment of complainant, and from going either singly or collectively to' the homes of complainant’s employes, or any of them, for the purpose of intimidating or coercing any or all of them to leave the employ of complainant or from entering complainant’s employment, and from intimidating or in any manner threatening the wives and families of said employes at their homes because of their said employment; and from conspiring in meetings, or otherwise conspiring together, by threats or other coercive action, to induce or coerce any of the employes of complainant to leave the service of said complainant, or to prevent any person, by threats, intimidation, force or violence from entering the service of complainant; and that the said William M. Doughty be and he hereby is restrained from using money in furtherance of the purpose of preventing employes of the complainant from returning to their work and from paying money to such employes to induce such employes to leave their employment with complainant.

On the coming in of the order to show cause the defendants filed separate answers to the number of about one hundred, most of them using the same printed form, blank spaces being filled with the names of particular answering defendants. Numerous affidavits were attached to these answers in which printed forms were used, many of the defendants swearing to the same precise form of words. Additional separate affidavits were also submitted in opposition to the allowance of the writ.

Neither by these elaborate pleadings nor the accompanying affidavits, nor in the arguments of the defendant’s counsel is it claimed that the terms of the restraint allowed by the above-recited ad interim stay work any hardship or oppression upon the defendants. The whole burden of the pleadings, proof and argument submitted by the defendants is directed to a denial of the facts and circumstances set up in the complainant’s bill, and to contentions that the strike, which is now admittedly being conducted under the direction of the defendants at the complainant’s works, is carried on without either violence, intimidation or other unlawful interference with the complainant’s business.

The situation is this—a restraint is outstanding which imposes no hardship .upon the defendants, the legality of which is not challenged, save as it is contended that in point of fact there is no occasion for its exercise. At the present stage of the case this question is before the court upon ex parte affidavits. The cause has been set down for a day certain on final hearing, when witnesses will be produced in open court and subjected to cross-examination on the very same points which are now presented only by voluntary affidavits. It is indicated that the case will turn almost wholly upon the credibility and weight of the testimony of witnesses of whose worthiness the court has but little opportunity to be advised.

If I pass upon the credibility of this testimony as exhibited by the affidavits on file I shall have prejudged this case and have subjected the parties to embarrassment when the same facts shall be presented by the same witnesses on the stand, giving their testimony in open court. There will be two hearings and decisions on substantially the same question. The cause can be disposed of on the final hearing in a much more intelligent and conclusive manner.

As the ad interim restraint is not injurious to the defendants, but its removal may work great harm to the complainant, the present status may remain until the final hearing gives a full opportunity to pass upon the whole case by a single judgment.


author: Grey, V. C.

text:
    The George Jonas Glass Company v. The Glassblowers’ Association of the United States and Canada et al.
    [Filed March 16th, 1903.]
    Defendants, who were engaged in a strike, had been restrained from intimidating complainant’s employes and from congregating for the purpose of intimidating any person seeking employment of complainant. In an application to punish defendants for contempt, the only evidence was that two men, who approached complainant’s works, were asked whether they were going to work in the factory, and were accompanied by several strikers to the gates of the factory, but were permitted to enter without molestation ; that when they came from the factory they were followed at a distance, but, on their return, entered the factory without molestation, but were thereafter followed to the house of a third person, with whom some of the strikers offered to fight. The proof as to the assemblage of the persons was uncertain-.—Spld, .that the evidence was not sufficient to justify a finding that the injunction had been violated.
    On bill, &c., and second petition that certain defendants be adjudged in contempt.

      Messrs. Hampton &. Fithian and Mr. John W. Harding, for the complainant.

      Mr. Louis H. Miller and Mr. John W. Wescoit, for the defendants.
   Grey, V. C.

(orally).

The petition in this matter asks that certain defendants may be adjudged to be guilty of contempt because of their action, on September 17th, 1902, in alleged breach of a restraining order of this court made on the 7th day of July, 1902. The order restrains the defendants from attempting to prevent any person, by threats, intimidation, annoying language or acts, force or violence, from entering the service of the complainant, and from congregating for the purpose of intimidating, threatening or coercing any person seeking employment of complainant, &c.

An order to show cause was allowed, and testimony in open court was taken in support of, and in opposition to, the charges of the petition.

The petitioner’s testimony is that two men, named Mingin and Noble, had been told that if they applied at the works of the complainant company they could probably get employment. They approached the complainant’s factory, by walking along the railroad which passes by it: They were met by two or three men, apparently strikers, one of whom asked whether they were going to the factory to work. They denied that they were, and proceeded towards the factory, several of the strikers accompanying them nearly to the gates. They went into the factory, without interference or molestation of any sort. They then left the factory to go to the house of a Mr. Sehaible; three or four other men went ahead of them and some followed on 'bicycles, no conversation passing between them. They were unable to find Mr. Schaible’s house, and returned to the factory, without hindrance from anyone, some of those who had accompanied them going before and some behind them at distances varying from twenty-five to seventy-five yards. At the factory they stated their inability to find Schaible’s house, and started out again with a Mr. Dare to find it. They testify that they were now followed, at some yards distance, by a considerable number of men on bicycles and afoot. When they were going across a lot one of these men threw an apple at them, and Mingin says called Mr. Dare a foul name. Noble says, if he understood them aright, the men called foul names after all of them. When they got to the Sehaible house, Mingin, Noble and Dare went into the house, while the men who followed remained outside. One of the latter came to the door and wanted to talk to Mingin and Noble. Mingin went to the door, and was asked by the man if he was going to work at the factory. Mingin again told him that he “didn’t know as he was.” Mr. Sehaible and the men then had some words, and one of the latter pulled off his coat and invited Sehaible to fight. The two, Mingin and Noble, stayed in the house three-quarters of an hour, and then left by a back door. Neither Mingin nor Noble was hired to work at the factory, and both declared they were afraid to stay.

Their testimony is flatly contradicted by that of a large number of witnesses, who deny the use of any opprobrious words or threats.

It is shown, by the testimony of Mingin and Noble themselves, that they had been drinking when they came to Minotola, and the proof strongly indicates that they were considerably under the influence of liquor. They admit that they told the first men they met that they did not mean to apply for work at the complainant’s factory, and that they afterward repeated this statement at Mr. Schaible’s house. There is no pretence of proof that there was in fact any interference seeking to prevent the two' men from entering the complainant’s factory. They went into the factory twice without any attempt on the part of anyone to stop or molest ■them.

The testimony, which it is claimed shows hostility to Mingin and Noble, charges manifestations only by words. These might be sufficient to show a breach of the restraint if they were proven by the weight of the evidence. But testimony given by the complainant’s own witnesses, as to the words used, is neither consistent nor clear in stating what was said, and it is flatly contradicted by numbers of witnesses who were in the party or followers of it.

There is but one element in the proofs which leads me to hesitate in disposing of this motion, and that is, on the charge that there was a congregating of a large number of men for the purpose of intimidating those who might wish to seek employment at the complainant’s factory.

There can be no question, taking the whole case together, that, at and near the complainant’s factory, a system of picketing has been inaugurated. All of the approaches to Mr. Jonas’ factory are watched by these men, who frankly say that they propose to persuade (as they say, peaceably) anybody from taking employment in the factory.

I have not been invited to declare that mere peaceable picketing of public roads is in itself a breach of the restraint. I am not prepared to say, if that question were under consideration, that men may not, under the law, stand in a public road add try, in a peaceable way, to persuade other people not to take work in a factory. The difficulty in such cases is that the picketing is usually done by persons who are ignorant of the line where persuasion ends and intimidation begins; who are actuated, to a considerable extent, by a determination to accomplish the ultimate object—the prevention .of employment at the factory. They are men who have never felt the responsibility attendant upon the exercise of power. When they know that the result which they wish to: accomplish can be certainly attained by the use of intimidation or force, the line of persuasion is very apt to become obscure and to be ignored, and conduct which ought to be simple persuasion between one man and another, bécomes a course of threatening or violence for the accomplishment of the result sought.

The proof on the point of the assemblage of a number of the defendants for the purpose of intimidating persons seeking the complainant’s employment was uncertain and variant as to their number, and still more so as to their purpose. Roble and Mingin themselves differ as to their number, and do not show that, at any time, the followers approached at all nearly h> them, apparently not near enough for them to distinguish their remarks with any certainty.

On this point, however, the testimony comes nearer to showing a breach of the restraint than on any other line of the examination. I make this judgment with some hesitation, but, considering the weight of all the testimony, I am not able to say that a breach has been shown.

The prayer of the petition, that certain defendants be held to be in contempt because of their conduct in the incident of September l'7th, 1902, narrated in the petition, is refused.


text:
    Ida A. Kreutz v. Charles H. Cramer.
    [Filed March 19th, 1903.]
    1. A stop notice, served in accordance with the requirements of section 3 of the Mechanics’ Lien act, obliges the owner of a building being erected under a filed contract, to retain for the benefit of noticing creditors any part of the contract price which may have become payable but which has not been paid to or assigned by the contractor at the time when a stop notice is served; and also all money which may thereafter come to be payable under the contract.
    2. The fifth section of the supplement of 1895 to the Lien act, now section 5 of the revised1 Lien act of 1898 (P. L. of 1898 p. 539), as interpreted by the court of appeals in the case of Slingerland v. Binns, 11 Dick. Ch. Rep. 415, does not relieve the owner from the requirement to retain moneys, part of the contract price actually in his hands, unpaid to and unassigned by the contractor, at the time a stop notice is served upon him, whether such moneys are, by the terms of the contract, due and payable or not. The purpose of section 5 is to make the owner, in case he pays an installment of the contract price in advance of the time when by the contract it comes to be due, liable to any claimant who serves a stop notice before such installment comes to be due.
    3. The effect of the statute, as construed by the Slingerland decision, being to create an inchoate lien in favor of workmen and materialmen upon all installments of the contract price up to the time when, by the contract, they come to be payable, an owner noticed to retain an installment of the price remaining in his hands after it has become due, cannot pay it out relying upon reimbursing himself out of an installment yet to come due, for this would defeat the inchoate lien of workmen and material-men in the latter installment.
    On bill for interpleader, answers and proofs.
    This is an interpleader bill filed by Ida L. Kreutz, an owner, who has procured a building to be erected for her under contract, &e., filed in the county clerk’s office. The defendants are the contractor, one Goings, and the creditors of the contractor, who have given notices to the owner to retain the amount of their several claims from the contract price, under the Mechanics’ Lien act.
    There are no disputes between the parties as to the payment by the owner of the first, second and third installments of the contract price. Do notices were served until after these installments had been earned by and paid to the contractor.
    It is admitted that the fourth installment came to be due and payable to the contractor on the 35th day of May, 1903, and before any stop notice was served, and that its amount was $960.
    On the 37th day of May, 1903, the defendant, Charles H. Cramer, a subcontractor, served a stop notice upon the owner, Ida L. Kreutz, to retain $3,085, the amount due him for labor done and materials furnished in the erection of the building. At the time of this service of Cramer’s notice, the fourth installment of $960 had matured, under the terms of the contract, but none of it has yet been paid out to or for the contractor, nor had any assignment been made of any portion of it, nor had any other stop notice been served.
    Many stop notices have been served since the -service of Cramer’s, and, with these later stop notices, the total amount demanded from the owner, complainant, exceeds $4,000.
    The owner, Ida L. Kreutz, files her bill of complaint for an interpleader decree against these conflicting claimants, tendering the above sum of $3,375.76 as the total amount rightfully payable under the contract to the noticing'creditors. They appear and dispute this claim,- insisting that by the service of the Cramer notice on May 37th, 1903, the owner was obliged to retain and apply the whole of the fourth installment of $960, so far as it would go, to the payment of the Cramer claim, and that the sum which she must deposit in court in order to entitle herself to file an interpleader bill must be the sum of the
    Fourth installment .......................... $960 00
    Less the payment to Risley on account of Cramer, 17 80
    $942 20
    And of the last installment.................... 3,000 00
    $3,942 20

      On this contention the cause has come to a hearing between the complainant and the defendants.
    The foregoing statement of the facts is a summary of the admissions made by the parties at the hearing.

      Messrs. Higbee & Endicott, for the complainant.

      Messrs. Thompson & Cole, for the defendant Somers Lumber Company.

      Mr. William M. Glevenger, for the defendant Cramer.

      Mr. Robert H. Ingersoll, for the defendant Mulock.
   Grey, V. C.

This case must turn upon the construction to be given to section 3 of the Mechanics’ Lien act (Gen. Stat. p. 2073) when considered with relation to section 5 of the amendatory act of March 14th, 1895 (Gen. Stat. p. 2074), both of which have been re-enacted in the revision of the Mechanics’ Lien act of 1898 as sections 3 and 5 (P. L. of 1898 p. 538) and the decisions of the courts of this state declaring the meaning of those sections.

The issue joined in this case between the parties raises the question whether the complainant owner has in her interpleader bill tendered to the contesting claimants the full sum of money which, under the building contract and the notices served upon her, the owner was bound to hold at their disposal. If by her present suit she tenders the full sum due, she has a right to be protected against the defendants’ conflicting claims, and they must contest with each other for its distribution. If, however, the complainant does not tender the full sum which, under the contract and the notices served upon her, she was bound to retain, she cannot require the defendants to interplead for the distribution among them of a less sum than is their due.

The parties are agreed as to the facts. The dispute is limited to the disposition made of the fourth installment of $960. It had come to be due to the contractor, but had not been paid to him, and he had not in any way disposed of it.' The owner still had the whole of it in his hands. The final payment of $3,000 had not yet come to be due.

While this was the condition of affairs, the defendant Cramer, a subcontractor, who had done work and furnished materials to the building, served a stop notice, according to the requirements of section 3 of the Mechanics’ Lien act, upon the owner (the complainant) notifying her to retain for him $2,085 from the contract price.

The owner, after receiving Cramer’s stop notice, paid out to the contractor, or to his order, various sums, amounting to $684.24. Shortly after, many other stop notices were served, sufficient in amount largely to exceed the total sum of the moneys remaining in the hands of the owner.

The complainant insists that when Cramer served his notice, the fourth installment of $960 had matured and was payable to the contractor or to his order, and that no stop notice served after its maturity could have any effect to oblige the owner to retain it in her hands; that she had a right to pay this matured installment to the contractor and to rely upon the final payment of $3,000 to pay Cramer.

The effect of this contention, if supported, will be to pay Cramer’s claim in great part out of the last payment due under the contract and thus defeat the later noticing claimants who duly served stop notices against that payment.

In support of her contention the complainant cites the decision of the court of appeals in Slingerland v. Binns, 11 Dick. Ch. Rep. 415, where the court declares that the effect of the enactment of section 5 of the act of 1895 was “to give to persons entitled to serve the statutory notice an inchoate lien upon the liability of the owner under the contract, until that liability matures, according to the terms of the contract, such lien to become perfect on service of the notice before the liability matures, but to expire, on such maturity if no notice has been given, for a notice served after maturity derives.no aid from this provision.”

The complainant contends that as Cramer’s notice was served after the fourth installment had matured, Cramer had no lien on that installment.

The legislative purpose in all the legislation on this subject is not in any way in doubt. The title of the original Mechanics’ Lien statute defines it with precision. It is declared to be “An act to secure to mechanics and others payment for their labor and materials in erecting any building.” All amendments or supplements to the original act should be construed with relation to this declared object of the original statute, and provisions which modify the act ought not to be held to take away the security which the legislation gives to workmen and furnishers of materials, unless that purpose is clearly within the legislative expression.

Section 3 of the Lien act declares that the owner is authorized to retain the sum claimed

“out of the amount owing by him * * * to the contractor, or that may thereafter become due from him to such * * * contractor,” &c.. Gen. Stat. p. 2073.

Under this provision the amount owing by the owner to the contractor, at the time of the service of the stop notice (whether yet due and payable to the contractor or not), was to be retained for the noticing claimants. The court of appeals, in Mayer v. Mutchler, 21 Vr. 162, declared that the third section made it the duty of the owner, when a stop notice was served upon him, to retain from any moneys then due or which might thereafter become due to the contractor a sufficient amount to answer the notice.

In the conduct of the business, workmen and materialmen supplied work, or materials to a building, relying upon their right to serve stop notices and thus have the contract price retained to secure the money due them. They were notified by the filed contract that the contract price would come to be due at certain periods in named installments. Naturally, they supposed a notice served before an installment came to be due would retain that installment. But it came about that the contractor would give orders against the installments before they were due, and the owner would accept these and pay out the installments before the period when, by the contract, they would have come to be due.

The result was a stop notice served on the owner failed to affect the part of the contract price which the owner had previously paid to the contractor before it was due or which the contractor might have assigned before the stop notice was served upon the owner. Craig v. Smith, 8 Vr. 550 (Court of Appeals). It was declared that the workman had no lien on the contract price and that his right attached only when the notice was served, and affected the contract price as it then existed. If, when the stop notice came to the owner there was nothing owing the contractor because of previous assignment by or payment to him, the predicament contemplated by the statute did not exist, and the notice was ineffectual. Craig v. Smith, supra.

This was the state of the law previous to the statute of 1895. It worked an injustice to those who contributed labor or materials to the erection of a building, because the contractor might defeat their claims by assigning the contract price or by inducing the owner to anticipate payment before any stop notices were served, or by creating any condition before the stop notice was served, whereby, at the time it was served, the owner owed nothing on the contract price to the contractor.

This was the mischief which the supplement of 1895 was intended to remedy. That statute did not take away^ the right of the noticing claimant (given by the third section) to have the contract price remaining in the hands of the owner at the time of the service of the stop notice, retained for the benefit of the claimant. It gave the noticing claimant an additional security, for it declared that the owner could not in any way discharge his liability to pay under the contract, until, according to its terms, the time to do so had arrived. Until that time did arrive, the workmen and materialmen who served the statutory notice were given a lien upon the fund.

The change wrought by the supplement of 1895 as construed by the decision of Slingerland v. Binns was this: before that supplement, the claimant, relying on the terms of payment set forth in the contract, might have served his stop notice before an installment came to be payable, but if the owner had previously paid out the money to the contractor or to his order, he was not liable to the noticing claimants.

By that supplement workmen and materialmen were given an inchoate lien upon the contract price, up to the period when, by the terms of the contract, it became payable, which lien could be made complete as to any claim by service of a stop notice before the time when, by the contract, the price became payable. The lien given by the supplement was discharged by the maturing of any payment without service.of such notice.

This I understand to have been the construction of the supplement of 1895, by the court of appeals, in the case of Slingerland v. Binns.

In the Slingerland Case the claimant had served his stop notice before the last installment had, under the contract, come to be due, and had thereby perfected the lien given him by the fifth section of the act of 1895. The owner had previously laid out, on orders from the contractor, $690.68 of this last installment. The contest was between the owner and the stop noticing claimant, on the point whether these advance payments of the contractor’s orders, made previous to the service of the stop notice, should, to that extent, relieve the owner from liability for this last installment of the contract price. The court held that, as the owner had paid this money before the installment was due, he was, under the act of 1895, liable to the noticing claimant as if it had not been paid.

The court did not deal with the question of the liability of an owner who^ at the time when a stop notice is served, still has in his hands a part of the contract price which has come to be due. Such money, being an “amount owing by the owner to the contractor,” was liable to be noticed to be retained, under section 3 of the Lien act, before the supplement of 1895, and still remains so liable, for that supplement did not deal with that liability or change it in any way. It did not repeal section 3; on the contrarjq that section was re-enacted as part of the supplement of 1895, with a slight change of phrasing not affecting the point presently under discussion. Section 3 makes any part of the contract price owing from the owner to the contractor, due or to become due, liable to a served stop notice. Section 5 of the supplement of 1895 makes the owner liable for any installment of the contract price to any claimant serving a stop notice before the time when, by the'contract, it was payable, notwithstanding the owner may have previously advanced the money. One section makes the contract price liable to notice so long as it is owing to the contractor when the notice is served. The other makes the owner liable, even if the contract price is not owing to the contractor, when notice is served, if the notice is given prior to the date when the money became payable by the contract. It is no longer a defence for the owner that he has made advance payments before the notice was served, or that the contractor had previously assigned the contract price.

In the present case the fourth installment had matured. No stop notice had been given previously to the date when it was payable. The lien referred to in the Slingerland Case was discharged. The money, though in the hands of the owner, was lawfully payable to the contractor. If he had collected it, or assigned it, the owner would not have been liable for having recognized the contractor’s right. But the contractor did neither. The money remained in the owner’s hands, part of the contract price owing to the contractor. At this stage of the business Cramer’s stop notice was served, and the installment being an amount in the owner’s hands part of the contract price owing.to-the contractor, the owner was bound to retain, under the requirements of section 3 of the Lien act. The notice served operated as an assignment, pro tanto, of the contract price owing by the owner to the contractor.

It is no defence for the owner to say that she relied upon the fact that the final payment of $3,000 (yet to come due when Cramer’s notice was served) was large enough to satisfy Cramer’s claim, and that she paid out the fourth installment to the contractor on this assumption. The owner, having the fourth installment in her hands when Cramer’s stop notice was served, was charged with knowledge that the law made that payment liable to the notice, and that the final payment was subject, also, to inchoate liens, which any workman or materialman might make complete, at any time before that payment came to be due, by serving his notice. The owner had no right to shift the burden of paying Cramer’s claim from the fourth to the last installment, and thus defeat the liens of these claimants who might afterwards effectually notice her to retain the last installment for their benefit. The principle applies that where A has a lien iipon two' funds, and B lias a lien only upon one of them, B may (other equities not being superior) compel A to look first to that -fund on which B has no lien.

A careful examination of the supplement of 1895, and of the decisions of the court of appeals which deal with that statute, will show that section 5 of that act was not intended to discharge any part of the contract price which remained in the hands of the owner unpaid to, and not assigned by, the contractor at the time a stop notice was served.

In Bayonne v. Williams, 14 Dick. Ch. Rep. 620, the court of appeals, referring to the fifth section of the act of 1895, declares “all that the supplement effects is that the contractor shall not, by assignment, nor the owner by a premature payment, defeat a duly-served notice; the express provision is that ‘such owner or owners shall be liable in the same manner as if no such payment had been made.’ ” In Smith v. Dodge, Bliss & Co., 14 Dick. Ch. Rep. 586, the same court construes the act of 1895 as applicable to prevent advance payment and secret arrangements between the owner and contractor, whereby the contract price might not be owing to the contractor when stop notices were served. Mr. Justice Pitney, speaking for the court of appeals, in the case of Taylor v. Reed, 52 Atl. Rep. 582 (June Term, 1902), after citing the above cases, declares:

“Upon the whole, it seems well settled that while a claimant who serves his stop notice after the owner’s liability to the contractor has matured still has the benefit of his notice, so far as it entitled him to stand in the shoes of the contractor and recover from the owner any moneys then due from the owner to the contractor, to' the extent of the claimant’s demand, yet such a belated stop notice has no retroactive effect, and does not entitle the claimant to any benefit of the provisions of section 5 of the act.”

In the present case Cramer, the stop noticing claimant, does not ask the benefit of the provisions of section 5 of the act. He stands, as above shown, upon the provisions of section 3, and seeks to make the owner liable, not because the owner had made advance payments, but because, when his notice was served, the owner had the contractor’s money (part of the contract price) 'still in her hands.

The result is that the complainant owner ought' to hold at the disposal of the contesting claimants the sum of $942.20, which is the whole of the fourth installment, except the $17.80 paid to Risley on Cramer’s order, and also the whole of the last installment of $3,000, making a total of $3,942.20; and should, in her interpleader bill, have tendered this $3,942.20 to' the defendants, as the total sum due them from the complainant. •

By her bill the complainant tenders only $3,275.76. She has no equity to compel the defendants to interplead for any, less sum than is rightfully payable to them.

I will advise that the complainant’s bill be dismissed, with costs.


author: Gkey, Y. C.

text:
    Thomas Harron v. Josiah S. Du Bois et ux.
    [Filed May 1st, 1903.]
    1. A second mortgagee advanced money for the purchase of the equity of redemption and obtained it to be conveyed, to another to hold for his benefit.—Helé, such a dealing with the equity of redemption is evidence that there was no intention to merge the equity of redemption with the mortgage, and it will not be held to have merged.
    2. An existing first mortgage was a lien on two separate lots of land. A second mortgage was afterwards taken upon one of those separate lots. —Helé, the second mortgagee acquired an equity to have that p.ortion of the lots covered by the first mortgage, on which the second mortgage was no lien, first applied to and sold for the payment of the first mortgage. Creditors of the mortgagor, who afterwards obtained judgment, and those claiming under them, took their interest subject to this equity.
    On bill to foreclose, and answers and proofs.

      The bill in this case is filed by the complainant, Thomas Harron, the assignee of a mortgage made on February 3d, 1890, by Jonathan T. Adams and wife to John A. English, to secure the payment of $5,500, with interest, in three years from date, upon a lot of land fronting on Central avenue, in 'Ocean City, New Jerse3r, on which is located the Hotel Lafayette, and upon other vacant lots in Ocean City located on Wesley avenue and Asbury avenue. The mortgage was recorded on the 3d day of April, 1890, in Cape May county clerk’s office.
    The defendants are Peter Gallagher, who has become the owner of the hotel property on Central avenue, by purchase from Charles Nicholls, the sheriff of the county of Cape May, at a sale made under judgments and executions conveying the title whereof the mortgagor, Adams, was seized on the 22d day of August, 1892. The sheriff’s deed to Peter Gallagher is dated January 26th, 1893.
    Another defendant is Daniel Gallagher, who holds a mortgage on the hotel property for $3,500. This mortgage is dated July 23d, 1892, and recorded in Cape May county clerk’s office on the 25th day of July, 1892.
    Another defendant is Josiah S. Du Bois. He is the holder of the equity of redemption in the unimproved lots on Wesley and Asbury avenues, by purchase from the sheriff of the county of Cape May, by deed dated August 24th, 1900, as appears by the evidence, under a judgment entered on January 14th, 1893, and levy and sale thereunder. •
    The other defendants are judgment creditors, who have not filed answers.
    The defendant Daniel Gallagher admits the equity and priority of lien of the complainant’s mortgage, and sets up his own subsequent mortgage on the hotel property, claiming that as his (Daniel Gallagher) mortgage is a lien only on the hotel property, and not on the vacant lots, the complainant, in selling the mortgaged premises to make the money due him, must first sell the vacant lots and apply the proceeds in satisfaction'of the complainant’s mortgage, so far as they will go, and sell the hotel property last to make any residue remaining unpaid to the complainant.

      The defendant Josiah S. Du Bois also admits the complainant’s mortgage and its assignment to him. The defendant Du Bois contends that the conveyance of the hotel by Sheriff Kieholls to Peter Gallagher was, in fact, made in trust for Daniel Gallagher, who was the real purchaser, and that the assignment of the mortgage presently in suit to the complainant was likewise in trust for Daniel Gallagher; that the latter, as mortgagee in possession of the mortgaged premises, has received rents for which he should be charged on an account, as against the amount due on the complainant’s mortgage.
    The cause came to a hearing on these pleadings.

      Mr. Samuel D. Bergen and Mr. Martin V. Bergen, for the complainant.

      Mr. F. Morse Archer and Mr. David J. Pancoast, for the defendant Josiah S. Du Bois.
   Gkey, Y. C.

There are but two questions in dispute between the parties:

First. The defendant Du Bois insists that there should be an accounting for the rents and profits of the hotel property from January 26th, 1893, when Peter Gallagher bought it from the sheriff, and a charging of the amount of such accounting against the complainant’s mortgage.

Secondly. The defendant Du Bois contends that, in ordering the sale of the mortgaged premises, the hotel property owned by the defendant Peter Gallagher should be first sold, and the vacant lots owned by the defendant Du Bois should be secondly sold.

The incidents upon which the defendant Du Bois bases his claim for an accounting against the complainant’s mortgage are as follows:

In July, 1892, Jonathan T. Adams appears to have been the owner of the hotel property, and also of the vacant lots. A number of Adams’ creditors had recovered judgments against him. On July 23d, 1892, Daniel Gallagher received from Adams and wife a mortgage, on the hotel property only for the sum of $2,500, which was recorded on July 25th, 1892. During the month of January, 1893, Daniel Gallagher purchased all of the judgments then outstanding against Adams, except two (one of which was held by Cole, receiver, &c., and the other by George W. Huhn), and caused them to be assigned to Peter Gallagher. In the same month of January, 1893, the hotel property was, under the two judgments against Adams, held by Eugene C. Cole, receiver, and by George W. Huhn, respectively, sold by the sheriff to Peter Gallagher, by deed dated January 26th,'1893. In February, 1893, as Peter’s tenant or appointee under the -deed from the sheriff, Daniel Gallagher went into possession of the hotel. The effect of the conveyancing at this time was, that Peter Gallagher was the holder of the equity of redemption in the hotel property, under the sheriff’s deed, with his tenant or appointee, Daniel Gallagher, in possession of the premises. John A. English was the holder of the first mortgage on both properties (since assigned to the complainant, and now in process of foreclosure in this suit), and Daniel Gallagher was the holder of the second mortgage, which was a lien only on the hotel property.

It will be noted that no possession of the hotel was taken under or tyy' virtue of the complainant’s mortgage, now sought to be charged with rents and profits. On the contrary, at the time Peter Gallagher, by his appointee, Daniel Gallagher, took possession of the hotel property the complainant’s mortgage was held by John A. English, who did not assign it to the complainant until the 24-th day of April, 1893. .

There was no merger of the equity of redemption with the first mortgage title, because the equity was held by Peter Gallagher, and that mortgage was held by John A. English. There was no merger of the equity of redemption with the second mortgage of Daniel Gallagher, because the title to the equity was, as above stated, held by Peter Gallagher, while the second mortgage was held by Daniel Gallagher. It was obviously the intention of all the parties that the equity of redemption should stand separate and apart from the mortgage title under either mortgage. It did not- matter if it were in fact true that Daniel Gallagher, the second mortgagee, did advance his own money to enable the purchase of the equity of redemption by Peter, to be made under the sheriff’s deed. Daniel had a right to purchase the equity of redemption and to preserve and protect it from merging with his mortgage title. lie owed no duty to Adams, the mortgagor, or to the defendant Du Bois, or to anybody else, which obligated him to deal with that title in such a manner that a merger should be effected. The equity of Adams, the mortgagor debtor, who continued to hold title to the vacant lots (now held by Du Bois), gave him no right to require Daniel Gallagher, if he did purchase the equity of the hotel property, to merge it with his mortgage for Adams’ benefit as owner of the vacant lots.

As against Adams, and against all those claiming under him, of whom the defendant Du Bois is one, Peter Gallagher’s title and entry upon the hotel property, under the sheriff’s deed, was and is controlling and superior. There was no entry into possession under the complainant’s mortgage, now sought to be charged with the rents and profits, and no entry into possession under Daniel Gallagher’s mortgage. The entry and taking possession was under the sheriff’s deed to Peter Gallagher. Under that deed the rents, issues and profits of the premises were rightfully collectible by the purchaser as holder of the equity of redemption.

The possession having been taken under the sheriff’s conveyance of the equity of redemption, the rents and profits cannot be charged against either mortgage by whomsoever held.

If it were true that the complainant’s mortgage was in fact purchased by Daniel Gallagher’s money and put in the complainant’s name for the protection of Daniel’s interests in the property, there was neither illegality nor inequity in the trans-' action. While 'the first mortgage was held by English he had the right to foreclose it, to collect the full amount of principal and interest due thereon, and to require the application of all the mortgaged premises to its payment. He was in no way chargeable with the rents and profits. At the time of the assignment of the first mortgage to the complainant, possession of the hotel property was rightfully in Peter Gallagher under the sheriff’s deed. When that mortgage was purchased from English (whether it was by the complainant or by Daniel Gallagher), the purchaser took English’s place and thus became entitled to apply all of the mortgaged premises to the payment of principal and interest of the mortgage debt without being surcharged with any rents and profits of the hotel property, because no possession of that property was taken or held under that first mortgage.

There is no aspect of this case which entitles the defendant Du Bois to have an account taken of the rents and profits of the hotel property and to have them charged, as is sought by his answer, against the amount due on the complainant’s mortgage.

As to the claim of the defendant Du Bois that the hotel property should be first sold and applied to the satisfaction of the complainant’s mortgage, and the vacant lots should be last sold, the pertinent facts are as follows: The complainant’s mortgage was recorded on April 23d, 1890. It covers both the hotel property and the vacant lots. The mortgage to Daniel Gallagher was made July 23d, 1892, was recorded July 25th, 1892, and covered only the hotel property. When Daniel took his mortgage on the hotel property he acquired an equity as against the mortgagor which entitled him to have the assets marshaled, and the values in that portion of the mortgaged premises on which he had no lien (the vacant lots) to be first applied to the satisfaction of the complainant’s mortgage, which covered both properties, the other lot (the hotel property) responding only for the residue remaining thereafter unpaid on the complainant’s mortgage.

This equity of the junior creditor, having a lien on only one of two funds, became fixed, as against the mortgagor, at the time the second mortgage was taken. Judgment creditors of the mortgagor, by their judgments and levies, take the property of their debtor as he held it, and nothing more. Herbert v. Mechanics Building Association, 2 C. E. Gr. 500 (Court of Appeals).

In the present case the defendant Du Bois acquired the vacant lots, by purchase from the sheriff, under the judgment which he recovered and entered on January 14th, 1893, about six months after the defendant Daniel Gallagher had, by recording his mortgage, established his equity. Du Bois therefore took title to- the vacant lots with notice of, and subject to, Daniel Gallagher’s right (as second mortgagee only in the hotel property) to have the vacant lots, on which he hacl no- lien, first applied to- pay the complainant’s mortgage, which wras a charge on both properties. To order the hotel property to be first applied would be a manifest injustice, for it would change the relations which the parties have themselves fixed, acting with full notice. The defendant Du Bois, as purchaser at the judicial sale, took the vacant lots burdened with the then existing charges, and has no status which enables him to escape by shifting them to other property in which he has no interest. Kreuger v. Ferry, 14 Stew. Eq. 432; affirmed on appeal, 16 Stew. Eq. 295.

Neither of the contentions advanced in behalf of the defendant Du Bois can be sustained.

I will advise a decree for the complainant, without charging him with any rents and profits, and for a sale of the- mortgaged premises, the vacant lots owned by the defendant Du Bois to- be first sold to- pay the amount due on the complainant’s mortgage.