text:
    Elizabeth Passman et al. v. Guarantee Trust and Safe Deposit Company et al.
    [Filed December 15th, 1898.]
    1. A residuary gift of the net income of lands to A, his heirs and assigns, without limit of time or gift over to other persons or other disposition made, will be held to be a devise to A of the title in the lands in fee.
    2. The same construction will be given to a will in which the residuary estate is devised to trustees to collect rents, &c., and pay net income to A, his heirs and assigns, without limit, &c., as above stated.
    On bill, answer and proofs.
    This bill is filed by the complainants, one of whom claims to be the owner of two twenty-second parts and the other of nine twenty-second parts of the residuary estate of one Thomas Costello, who died in the year 1877. The testator had made his will, dated December 24th, 1875, which was proven on the 31st day of August, 1877, before the register of wills of the county of Philadelphia, Pennsylvania, where the testator was domiciled at .the time of his death. An exemplified copy of the will has been filed in the office of the surrogate of Atlantic county, under the provisions of the New Jersey statute.
    By the terms of his will the testator, Thomas Costello, directed the payment of his debts; he gave general-money legacies, annuities and special devises, and then disposed of the residue of his estate by the following provisions :

      “Item. All the rest, residue and remainder of my estate of whatsoever kind and wheresoever situate I hereby give, devise and bequeath unto Ambrose-ICehoe and Edward Costello, both of the city of Philadelphia, and the survivor of them, and the executors, administrators or successors of such survivor forever, in trust, however, to collect the income, rent and revenue thereof, and after paying and defraying the expenses of this trust and the repairs, taxes, •charges and other expenses upon said residuary estate, to pay such net amount to the following-named persons and in the following proportions, to wit, first dividing the same into twenty-two shares or parts: Six shares or parts of said net income to be paid annually to Edward Costello, son of Patrick Costello, and to his heirs and assigns forever; four shares or parts of said net income to be paid annually to Margaret Costello, daughter of Patrick Costello, and to her heirs and assigns forever; two shares or parts of said net income to be paid annually to Elizabeth Costello, daughter of Patrick Costello, and to her heirs and assigns forever; two shares or parts of said net income to be paid annually to Henry Dunn, son of Ann Loughlin, and to his heirs and assigns forever: two shares or parts of said net income to be paid annually to my sister, Ann Loughlin, and to her heirs and assigns forever; two shares or parts of said net income to be paid annually to Mary Hart, daughter of Andrew Hart, and to her heirs and assigns forever; two shares or parts of said net income to be paid annually to Margaret Hart, daughter of Andrew Hart, and to her heirs and assigns forever; one share or part of said net income to be paid annually to Margaret Cullen, and to her heirs and assigns forever; and the remaining one share of said income to be paid annually to Mary Costello and to her heirs and assigns forever.
    “ It is my will, however, and I hereby direct that my said trustees shall so pay and hold the said income so that the same shall not be liable, responsible and attachable for the debts, obligations or liabilities of the respective persons so as aforesaid designated to receive the same.
    “ I hereby nominate, constitute and appoint the said Ambrose Kehoe and Edward Costello executors of this, my last will and testament, and I hereby revoke all former wills by me at any time heretofore made.”
    The testator at the time of his death was seized in fee of a tract of land in Atlantic City, New Jersey, at the northwest corner of Atlantic and Maryland avenues. The property passed under the above-quoted residuary clause of his will. The buildings on this property have become so decayed and weather-worn that they are scarcely tenantable, and are'now so entirely dilapidated that they are not worth repairing. The lot of land, however, is valued at from fourteen to fifteen thousand dollars, irrespective of the worth of any buildings thereon.
    The executors and trustees named in the will have both died since they proved the will, and the defendant the Guarantee Trust and Safe Deposit Company has been appointed trustee in their place and stead.
    The ownership of the several interests has been changed by death and transfer.

      The Guarantee Trust and Safe Deposit Company, as trustee of the other present holders of the shares, and the executors of the deceased trustees, have been made defendants.
    The complainant alleges that the Guarantee Trust and Safe Deposit Company has, as trustee, assumed the possession of the premises, and taken the rents and income therefrom, and that it is also proceeding to enforce the trust under the will of Thomas Costello. The complainants declare this action creates a cloud upon the title to the premises, and contend that the trust provision is illegal, because it seeks to create a trust in perpetuity, and they allege that they and the defendants are the absolute owners in fee-simple of the lands and premises passing under the residuary estate of the testator in the following shares and proportions: Elizabeth Passman, complainant, two twenty-second parts; Charles C. Babcock, complainant, nine twenty-second parts, and the following defendants, Mary Costello^ one twenty-second part; Mary Crowley, three twenty-second parts; Margaret Cullen, one twenty-second part; Emma Dunn, one twenty-second part; William Henry Sutton, one twenty-second part, and Mary J. Elder, four twenty-second parts.
    The complainants pray an accounting from the Guarantee Trust and Safe Deposit ■ Company and a declaration that the trust is void because it tends to establish a perpetuity, and an injunction restraining the trustee from interfering with the property.

      Messrs. August Stephany & Son, for the complainants.

      Mr. David J. Panooast, with whom is Mr. W. H. Sutton (of the Philadelphia bar), for the defendants the Guarantee Trust and Safe Deposit Company.
   Grey, V. C.

The whole contention in this case turns upon the construction of the effect of the residuary clause in the will of Thomas Costello, by which he gives the remainder of his property to two trustees, the survivor of them, and the executors, administrators and successors of the survivor, in trust to collect income, rent and revenue, pay taxes and repairs and the expense of the trust, and to pay over the net income annually in twenty-two parts, unequally distributed among named beneficiaries. The portions of the net income given to each beneficiary are expressed to be given to him, his heirs and assigns forever.”

No power of sale is created by the will. The provisions for the collection of rents and for the expenses of repairs indicate that • the testator, in disposing of this residue to produce an income, expected it to continue, in part at least, as real estate. There is no further disposition of the property included in the residue than is shown by the gift of the income to be derived from it, and there is no limitation over of any of the shares of the income. In fact, there'is no testamentary action of any kind touching the residue, than the gift of the income, to the first takers. As the trust is expressed in the will, the trustees must keep the principal of the fund, and pay out the net income to the beneficiaries, their heirs and assigns, without limit of time or circumstance. The only duty the trustees are charged to perform is to collect income, pay taxes, repairs and expenses, and turn over the whole net income, so that it should not be liable for the debts of the beneficiaries.

The rule appears to be settled that the bequest of the income without limit as to time, or gift over which can operate, is a bequest of the principal, if there be no expression of a contrary intent. Elton v. Sheppard, 1 Bro. Ch. C. 532; Haig v. Swiney, 1 Sim. & S. 487; Manning v. Craig, 3 Gr. Ch. 436; Craft v. Snook, 2 Beas. 121; Gulick v. Gulick, 12 C. E. Gr. 500. The same rule applies whether the gift be direct or through the intervention of a trustee. Ibid. So a devise of the income of land without limitation or devise over, is equivalent to a devise of the land itself. Den v. Manners, Spenc. 144; Diament v. Lore, 2 Vr. 222; Post v. Rivers, 13 Stew. Eq. 22; Conynham v. Conynham, 1 Ves. Sr. 522; Sir Thomas Plumer, V. C., in Stretch v. Watkins, 1 Madd. 143. The same rule applies to a gift of a perpetual annuity. Huston v. Read, 5 Stew. Eq. 596. In devises of trust estates where no conveyance is directed to be made the construction is the same in chancery ás it would be at law upon a devise of the legal estate. Martling v. Martling, 10 Dick. Ch. Rep. 781.

The operation of the rule is not defeated because some duty in realizing assets and securing and paying the income is cast upon the trustees. In Earl v. Grim, 1 Johns. Ch. 499, executors were directed by the will to rent or sell lands as they saw fit, and, in case of sale, to put the money at interest and pay the interest annually to G. P., &c. Chancellor Kent held that those who, by the terms of the will, were entitled to the interest were also entitled to the principal of the proceeds of sale. In Phillips v. Chamberlain, 4 Ves. *51, the testator gave the residue of his real and personal estate to trustees to convert into money and invest, &c., and directed them to pay the surplus of dividend and interest to his daughter, son, nieces, &c. The court held that the bequest to the trustee upon trust, to pay the interest from time to time without limitation of duration, carried the principal also.

In the case under consideration the whole income is given to the cestuis que trustent, their heirs and assigns. As between the beneficiaries and the trustees, the latter have no power to refuse the payment of any portion of the income, nor have they any duty to retain the residuary estate for the benefit of any successor in interest.

The whole structure of the will shows that the testator disposed of all his estate of every character, and had no intent to die intestate of any portion of it. The phrasing in the residuary clause, by which the shares of income are given to the beneficiaries, their “ heirs and assigns,” indicates an intent to give to them an absolute estate in the residue, and when considered in connection with the absence of any further gift, must, I think, bring the construction of this residuary gift under the rule applied in Phillips v. Chamberlain, ubi supra, where there was an absolute and unlimited gift of income to arise from a disposition of both real and personal estate, and it was held to pass the title to the principal of the funds realized.

The answer admits that the defendant the Guarantee Trust and Safe Deposit Company accepted the position of trustee under Thomas Costello’s will. The buildings on the premises on Atlantic and Maryland avenues are shown to be in very dilapidated condition and probably produce little rent or profit.

The trustee should state an account of the gross receipts of income from the residuary estate and of its disbursements therefrom and lawful charges, and should pay over the balance in, hand to the complainants, according as their holdings of residuary shares may entitle them.

In view of the apparent devolution of title to the residuary lands upon the trustee by the terms of the will, it may be desirable, in order to perfect the chain of title upon the record, that the' trustee should convey by deed with proper recitals, but without warranty, to the holders of residuary shares, in the proportions in which their interests may appear. This mode of relief is, not specifically prayed for, but is within the scope of the general prayer. The several steps by which the immediate devisees passed their shares to grantees should have been made by deed effectual ;tb pass real estáte. ’ No costs should be taxed as'against the defendants.


source: Caselaw Access Project

author: Grey, V. C.

license: Public Domain

text:
    James Riley v. Addie Hodgkins et al.
    [Filed December 29th, 1898.]
    1. The bill of complaint is sufficient if it state the legal effect of the complainant’s claim; matters of defence not affirmatively appearing on the face of the bill, must be brought into the record by plea or answer.
    2. A contract to convey lands set out in a bill of complaint will not on demurrer be held to be too vague in its identification of the property dealt with, where the elements of description are not manifestly applicable to different tracts, and they so point out its situation that it may be located,- and so name or suggest its boundaries, that when the lot is-located they may with reasonable certainty be ascertained on the ground.

      On demurrer, to bill.

      Mr. Henry J. Melosh, for the complainant.

      Mr. Charles B. Hughes, for the demurrant.
   Grey, V. C.

The bill in this cause is filed to obtain the specific performance of an alleged agreement to convey six lots in Jersey City. The title to the lots is stated by the bill to be in the defendants-Addie Hodgkins, Mary S. Shumway and Hattie A. Millett, the heirs-at-law of one Benjamin B. Hamblin, deceased. The bill alleges that on January 31st, 1898, the complainant,

“through, and by a certain John E. Foley, who at that time and prior thereto then and there was the agent of the said heirs-at-law of the said Benjamin B. Hamblin, purchased the said premises hereinbefore described, and by contract in writing, signed by the said John E. Foley, bought the said premises,” &c.,

at the price of $1,500 of which, as an earnest, he paid $100 on account. A receipt was given, which is alleged to be the contract for sale, in the words and figures following:

“ Jersey City, January 31'st, 1893.
“Received from J. Eiley one hundred dollars on account of fifteen hundred dollars purchase price of lots 5, 6, 7, 8, 9 and 10 in Block (Old No. 6) New No. 953, and being located on the northwest corner of Spruce and Hudson County Public Eoad. Balance of purchase price $1,400, to be paid on delivery of good and sufficient deed free and clear of all encumbrances whatsoever. Title to pass at office of J. Eiley, corner of Grove and Second streets, Jersey City, on Tuesday, March 1st, 1898, at one o’clock in the afternoon.
“John E. Foley,
“perF. J. Gtjileoyle.”

The bill further alleges that the complainant demanded performance of the “ said agent of the said heirs,” and that he refused to give the complainant a proper deed, &c., and tenders himself ready to pay the price according to the contract; that by the contract the title -was to be free from all encumbrances, but that in fact municipal taxes on the premises for 1893,' 1894, 1895, 1896 and 1897, with arrears of interest, remain unpaid; that on February 25th, 1898, the heirs of Hamblin did, by deed, convey the premises in question to the defendant Fiancis W. Mitchell, for the nominal consideration of $1; that this conveyance was made to defraud the complainant of his rights under the contract, and that Mitchell is not an innocent purchaser, and his title is subject to the complainant’s equitable interest under ' the contract. The bill makes defendants the heirs-at-law of Hamblin, and Mitchell, their grantee, and prays a decree that the defendants shall perform the contract by conveying the premises to him clear of encumbrances, tenders himself ready to pay the balance of purchase-money, and further prays that interest be allowed him on his advance payment, and that if defendants do not free the premises from taxes, the amount of them may be deducted from the purchase-money, &c.; that he may have damages for failure to perform, and that the deed to Mitchell be declared to be void, &c.

The defendants all join in a demurrer to the bill and set forth a number of causes which, for clearness of reference, I state separately by number. They show for cause of demurrer:

First. That no contract or agreement for the sale of the lands, tenements and hereditaments in said bill described, or any interest in or concerning them, or any memorandum or note thereof, was in writing signed by the parties in and by said bill sought to be charged therewith, or any or either of them, or by any other person thereunto by them or either of them lawfully authorized.
“Second. That it does not appear from said bill that John R. Foley, therein stated to have been the agent of the heirs-at-law of Benjamin B. Hamblin, deceased, was their agent to make a sale of the premises in said bill described or to make and sign a written contract or agreement or memorandum or note thereof in writing in behalf of said heirs.
Third. That the alleged contract or agreement in said bill of complaint set forth does not purport to be signed by the person who in said bill is stated to have been the agent of the heirs-at-law of Benjamin B. Hamblin, deceased, but by some other person whose authority to sign the same is not set forth in said bill.
“Fourth. That the lands and premises described in the bill are not shown to be the same as those described in the contract set forth in the bill, and that the description in said alleged contract or agreement is too vague and indefinite to be capable of enforcement by this honoroble court.”

The demurrer is to the whole bill, and each cause of demurrer alleged, extends to the whole bill.

The first cause, as it is framed, is in the nature of a speaking demurrer, and presents an issue of fact and not of criticism of the sufficiency of the bill in the law. It alleges as a fact that no contract was in writing signed by the parties sought to be charged, not that the bill shows no such contract. The proper function of a demurrer, and of the statement of a cause of demurrer, is to challenge the sufficiency in law of the matters stated in the bill. The demurrants cannot allege as a matter of fact that there was no contract in writing signed, &c., as a cause of demurrer, but must (if they desire to present that question) aver that the allegations of the bill do not show such a contract, and therefore they cannot be called upon to answer.

The second cause of demurrer exhibited addresses itself to the omission of the bill to allege that Eoley, who is therein stated to have been the agent of the owners, was their agent to make a sale of the premises or to make and sign a written contract in their behalf.

It is the law of this state that an employment merely to make sale of land, does not of itself confer upon the employe the power to bind his principal by giving a written contract for the sale of the lands. Morris v. Ruddy, 5 C. E. Gr. 236; Keim v. Lindley, 30 Atl. Rep. 1063; S. C. on appeal, sub nom. Lindley v. Keim, 9 Dick. Ch. Rep. 418. The same rule prevails in England. Hamer v. Sharp, L. R. 19 Eq. 108. The questions presented have been whether the facts proven indicated the conference upon the agent of'the power to bind his principal by contract to sell. In Brinton v. Scull, 10 Dick. Ch. Rep. 755, this court was of opinion that the proofs showed that such an authority was conferred, and was reversed because the court of appeals considered the proofs not sufficient. Brinton v. Scull, 10 Dick. Ch. Rep. 491. But these adjudications were pronounced upon the facts shown in the evidence, and not upon the' sufficiency of the allegations in the pleadings. The substance of the allegations in this bill is, that the complainant, through Eoley, who was the agent of the owners, purchased the premises by contract in writing signed by said Foley. The objection is that the allegation does not specify the extent and character of his agency. There may, under the law, be an agent who has authority to make a contract for the sale of lands binding on his principal. When it is alleged that the complainant purchased land from an agent, it is fairly to be intended, until the contrary is averred, that the agent was one of that class from whom a purchase could be made. It certainly will not be assumed, without either allegation or proof, that he had no such authority, yet this latter assumption is necessary to sustain the cause of demurrer under discussion, because to reach that result it must appear on the face, of the bill that the agent' had no such authority. The pleader is not called upon to state any more than-the legal effect of his own position, although when seeking to establish his right he may be obliged to prove many facts not specifically pleaded. Matters of defence must be brought into the record by the defendants. The bill alleges that the complainant purchased through the agent of the owners by a contract in writing signed by him. Under this allegation he may be able to prove that Foley was the general agent of the owners; in which case he would have had full power to bind them by contract in writing. If the defendants desire to raise the question of the extent of Foley’s agency, the introduction of a new fact is required, setting up by way of plea or answer, the limitations of the agency, and denying its sufficiency to justify the making of the contract. It is only when the bill affirmatively defines the character of Foley’s agency, so that it thereby appears that he is a mere broker, only authorized to find a purchaser, that this defect of his power may be set up as a cause of demurrer.

The position is analogous to the case of a bill- for the specific performance of a contract for the sale of land when the complainant states the agreement generally, without showing whether it is in writing or not. Such an allegation is sufficient either in equity or at law. Sir William Grant, master of the rolls, in Spurrier v. Fitzgerald, 6 Ves. *555; 1 Ch. Pl. *222. In such case it is upon the defendant- to allege that the agreement is not in writing. Until by plea or answer this fact is brought into the record, nothing appears which enables the court to apply the prohibitions of the statute.

The third cause of demurrer objects that the contract set forth in the bill does not purport to be signed by the alleged agent of the heirs, but by some other person whose authority to sign is not set forth in the bill. The copy of the contract set forth in the bill shows a signature “ John E. Foley, per F. J. Guilfoyle.” The preceding attending allegation of the bill is, that the complainant, “through and by Foley, who was at.that time the. agent of the heirs of Hamblin, purchased the premises, and by. contract in writing signed by the said John E. Foley, bought the said premises.” Then follows the copy of “said contract,” showing the signatures as above stated. The demurrer must be taken to admit the facts stated in the bill to be true, and here, there is a direct allegation that the contract was in fact signed by Foley. There is no allegation in the bill that it was signed by anyone else, but the copy had after- Foley’s name the added words “per F.-J. Guilfoyle.” Nothing in the bill shows who Guilfoyle was, nor what relation he bore to -Foley, nor that he had in fact signed Foley’s name. The demurrer admits the statement of the bill that the contract was signed by Foley, to be true, and this admission is not overcome by the fact that the copy set out shows the added words “per F. J. Guilfoyle” •without explanation or further statement. In the present condition of the pleadings, the question whether Foley did in, fact sign the contract, cannot be disputed, nor can the questions of the sufficiency under the statute of frauds, of the signing of his name by another person, be presented.

The fourth cause of demurrer alleged is that the lands described in the bill are not shown to be the same as those referred to in the contract set out in the bill, and that the description in the contract is too vague and indefinite to be capable of enforcement.

The bill alleges that Hamblin died seized of certain lands and premises situate in Jersey City, which is stated to be in Hudson county, N'.J., more-part-icularly described on a máp on file-in. Hudson county register’s office, entitled'“ Map of-property near Reservoir, in Hudson City, belonging to the estate of John Tonnele, deceased, by Levi W. Post, filed October 1st, 1868, are known and distinguished as lots number five (5), six (6), seven (7), eight (8), nine (9) and ten (10), in block numbered six (6), all as laid down on said map j ” that one Eoley was the agent of the heirs-at-law of Hamblin and that the complainant purchased the said premises hereinbefore described and by contract in writing, signed by the said John R. Foley, bought the said premises, &c. The bill then alleges that the context of the said contract is set forth as follows : and the contract is then inserted as above quoted, describing the premises as “ lots 5, 6, 7, 8, 9 and 10, in block (old No. 6) new No. 953, being located on the northwest corner of Spruce and Hudson county public road.”

There is nothing on the face of the bill which indicates that the lands referred to in the bill and in the contract are not the same. Lots at the “ northwest corner of Spruce and Hudson county public road,” in 1898, may be the same as those described as “ near Reservoir, in Hudson City, belonging to the estate of John Tonnele, deceased,” and stated to be laid down on a map filed in a public office in 1868. The lands in question are alleged to be the same premises and the demurrer admits it. The variance in the description appears to be the statement of different means of identifying the same premises. When the face of the bill does not show that the lot of which conveyance is sought is not the same as that agreed to be conveyed, and the description does not indicate that the vendor owns two or more lots to which the description might equally apply, the court cannot assume that they are different lots in order to make the bill demurrable.

Regarding the objection that the description in the contract is too vague and indefinite to be enforced, the contract is dated in Jersey City, and the description refers to certain numbered lots in a certain named block, designated by both its old and its new number, located on the northwest corner of Spruce and Hudson county public road. There is no mention that the lands lie in any specified township or county or state, save that they are on the Hudson county public road.

In Robeson v. Hornbaker, 2 Gr. Ch. 60, the omission to name county and state was held on demurrer to be no ground upon which to deny compulsory performance where the designation of the property in the agreement afforded other means of reasonable certainty of identification. Eeference to old surveys, streams, and, I take it, to lots by number and corner on public roads and avenues, affords quite as certain means of identification as would descriptions by metes and bounds. The purposes and objects of the statute of frauds are effected when the. writing identifies the land agreed to be sold with reasonable certainty. This may be by direct description of the lot itself or by reference to such details of its surroundings as may fairly be expected when applied upon the ground to fix with certainty its identity. No matter how precise may be the written description of lands, some parol proof will probably be required in applying the written description in locating the lands.

In Price v. McKay, 8 Dick. Ch. Rep. 588, the description was “ a lot on Bramhall avenue, No. 470.” This, together with the reference to the township of the vendor signing the contract, was held by Vice-Chancellor Emery to be sufficient to locate the property, and a demurrer was overruled.

In the case under consideration the name of the vendor is not recited in the memorandum, but there are other means of identification. The description in the contract names certain lots by number, in a certain block, designated by both its old and its new number, “ being located on the northwest corner of Spruce and Hudson county public road'.” This description would naturally lead one seeking to find the lots mentioned to go in Hudson county to the northwest corner of Spruce and the Hudson county public road, and there to find the lots referred to by number and block. At this northwest corner the premises in question, numbered lots 5, 6, 7, 8, 9 and 10, lie within the block mentioned. This description would, I think, pass a title to these lands by devise in a will, and this has been accepted as a legitimate test of its sufficiency of identification under the statute of frauds. Price v. McKay, ubi supra. The memorandum in this case, as in Price v. McKay, is dated at a place, and the Massachusetts rule is cited to the effect that in a- contract to. convey lands, the naming of a place where the contract is made, raises a presumption that the lands are there situate. Mead v. Parke, 115 Mass. 413. Vice-Chancellor Emery found the other words of the memorandum in Price v. McKay to be sufficient to support a decree for performance, without considering whether the place named in the first or date line of the memorandum might be held to indicate that the property dealt with was there located. I think the designation of the lots in the present case at the northwest corner of two streets, one of which is declared to be a public road in a named county, is a sufficiently .certain specification of the location of the lands being dealt with. It may well be argued, however, that in naming a place in the memorandum, the maker of it considered himself as speaking from that locality, not only to indicate the place where he was giving a receipt for the purchase price, but also as covering the interior specifications by number of lot block and streets, of the ■location of the lands agreed to be sold.

The causes alleged are none of them sufficient to support the ■demurrer.. I will advise that it be overruled, with costs.


author: The Ordinary.

text:
    Alexander T. McGill, Ordinary.
    Mary N. Maxwell, appellant, v. Mary M. McCreery et al., respondents.
    [Filed October 31st, 1898.]
    The fact that an executor is entitled to the estate of the testator for his life does not excuse failure to ascertain what the estate amounts to through an accounting that will fix the charges against him and allowances to him, and thus settle between all parties in interest just'what corpus the life tenant is to be responsible for.
    On appeal from an order of the Hudson county orphans court.

      Samuel Maxwell died in 1871, leaving a will by which he gave, devised and bequeathed all the residue of his property, after the payment of his debts and funeral expenses, to his wife, Mary N. Maxwell, “ for her use during her life only,” provided she should remain his widow; after her death, the property to go to his daughter, Anna, and his sons, Samuel and Henry, in the proportions of two-thirds to the daughter and one-sixth to each of the sons, provided that if one of the children named should die without issue his or her share should be equally divided between the “surviving legatees or devisees.” Mrs. Maxwell was made the sole executrix of the will.
    In the same year, shortly after the probate of the will and the grant of letters testamentary thereon, Mrs. Maxwell filed an inventory as executrix, which exhibits that the personal estate of the testator consisted of—
    Household furniture........................................... $489 00
    A bond and mortgage worth................................. 3,800 00
    Money in savings banks....................................... 2,333 46
    Fifteen six per cent. U. S. bonds and interest due July 1st, 1887..... 14,550 00
    $21,172 46
    On the 7th of December, 1897, at the instance of Allan S. Maxwell and Mary Maxwell McCreery, the orphans court, by its order, directed that Mrs. Maxwell show cause before it, at a time appointed by the order, why she should not render an account, as executrix of the will of her husband, and also directed how the order should be served. In response to this order, Mrs. Maxwell appeared by her counsel, and by her affidavit admitted the probate of the will, the grant of letters thereon and the inventory as above stated, and set forth that the real estate of the testator consisted of the house and lot 207 Mercer street, worth about $10,000; that the executrix took possession of the estate and administered it; that in March, 1883, she advanced, as executrix, to Samuel Máxwell, one of the legatees and devisees in remainder, $500, with the understanding that it should be deducted from his share of the estate or the share of his children therein, to wit, Allan Maxwell and Mary Maxwell McCreery, at whose instance the rule to show cause was issued, and their sister, Emeline McK. Maxwell, and that Samuel Maxwell, the testator’s son, died in January, 1897, leaving a wife, Emeline, and the three children named. In the affidavit she insisted that, under the will of her husband, she is not accountable to any person for the use of her husband’s estate, but is responsible only to the remaindermen in a proceeding in the court of chancery for “ waste or devastation.” By its order of the 8th of January, 1898, the orphans court directed Mrs: Maxwell to account.
    The transcript shows that she did file that which, on its face, is entitled as an account of her expenditures. It is sworn to by her on the 28th of January, 1898, to be true, both as to charge and discharge, according to the best of her memory and belief. Subsequently, by an order dated on the 25th of March, 1898, which recites that Mrs. Maxwell has not accounted, it was ordered that she should file an account with the surrogate on or before April 25th, 1898. It is from this latter order that the present appeal is taken.

      Mr. Abraham 8. Jackson, for the appellant.

      Mr. J. W. Rufus Besson, for the respondents.
   The Ordinary.

I think that Samuel Maxwell, Jr., took a vested interest in remainder in his father’s estate, subject to be divested if be should die without issue. He died leaving issue, and therefore his interest in the realty descended to his heirs-at-law, and his interest in the personalty went to his personal representatives. The executrix was not, by the will, given any control of the realty. That went to the widow of the testator for her life and thereafter will go to his children, as stated in the will.

The children of Samuel Maxwell, Jr., do not appear to be his personal representatives or to have any right to exact an account from the executrix. However that may be, it was the duty of the executrix, without compulsion, to account within one year after the grant of letters testamentary to her, or at the first regular term of the orphans court after the expiration of that year, unless the orphans court should expressly grant her further time. Orphans Court Act § 96. Not so accounting, she could have been cited to account by anyone interested in the estate at the ensuing term of the court. Orphans Court Act § 98. After two years’ delay in her accounting without the consent of the court, it became the duty of the surrogate to cite her to account. Orphans Court Act § 99. In addition to these provisions of the statute, the orphans court was empowered, at its will, to issue process to compel the executrix to account (Orphans Court § 2) or to proceed to the same end by a rule to show cause. Orphans Court Act § 157. The latter course was adopted. The statute does not limit a time within which the court must exercise its jurisdiction in this respect.

In the present case the executrix does not offer any sufficient reason why she should not account. Until she does account the balance of the estate for distribution is unascertained and she is not entitled to any allowance for either disbursements or commissions. The remaindermen have the right, while they live and the executrix lives, to know whether there are to be allowances. The fact that the executrix is to have the estate for her life does not excuse failure to ascertain what the estate amounts to through an accounting that will fix the charges against her and allowances to her, and thus settle between all parties in interest just what corpus the life tenant is to be responsible for.

Mrs. Maxwell tendered obedience to the court’s order of the 8th of January, 1898, by filing that which she styled an account, but it was an instrument expressly limited to a showing of only the money paid, laid out and expended by her in and about the administration of her husband’s estate. Such an instrument is not an executor’s account. An executor’s account, where there is an estate and allowances are expected, must show both debits and expected credits. An exhibit of the expected credits only is merely part of such an account. In the situation presented by the filing of the paper mentioned, two courses were opened to the court — -first, to accept the paper as an imperfect account and direct that exceptions to it be filed, or second, to order the executrix to complete the document which, on its face, is plainly deficient. The court chose the latter course in making the order appealed from, and, I think, rightly.

The order appealed from will be affirmed, with costs.


author: Reed, Vice-Ordinary.

text:
    In the matter of appeal of David B. Voorhees from the decree in the Monmouth county orphans court, in matter of estate of Hendrick Voorhees, deceased.
    [Filed February 21st, 1899.]
    1. A general order to sell lands of the estate encumbered by mortgages, for which claims have been filed with the administrator, is insufficient to authorize a sale free from the mortgages.
    2. A statute (Gen. Stat. p. 2401 § 198) authorizes the sale of encumbered lands free from the encumbrances, upon certain conditions.
    S. On exceptions to an administrator’s account for moneys received from a sale of lands of the estate and paid to mortgagees of such lands, it appeared that the mortgagees had filed claims upon the debts secured by their mortgages, with the administrator of the decedent, and a general order for the sale of the lands was made. The purchasers -understood that the sale was free from the mortgages, a declaration to that effect having been made at the sale. The land was sold in parcels, making it impossible to ascertain the extent of the encumbrance on the different parcels, and the price was adequate, regarding the property as unencumbered. The proceeds were first applied in payment of the mortgages. — Held, that the order of sale should be amended nunc pro tunc, so as to authorize a sale free from encumbrances.
    On appeal from the decree of the Monmouth county orphans court, made upon exceptions to the final account of the administrator.

      Messrs. W. I. & N. Chamberlain, for the appellants.

      Messrs. Parher & Pearce, for the respondents.
   Reed, Vice-Ordinary.

Hendrick Voorhees died leaving less than $600 of personalty and several tracts of land. Upon three of these tracts were' three mortgages made by the deceased, one to Mr.- Borton for $500, another to Bartison and Clayton for $600, and still' another to Mr.- Cook for $600. Each of these mortgages covered the three tracts. The mortgagees proved the amount of these mortgage debts as claims against the estate of Hendrick Voorhees. Smith v. Crater, 16 Stew. Eq. 636. A decree of insolvency was entered and an order for the sale of the real estate was made. The. real estate was sold.by the administrators, and out of the proceeds arising from such sale the administrators paid the amount of these mortgage debts. Exceptions were filed in the orphans court to the claim for allowance for these payments, and the court decreed in favor of their allowance.

The point made against the decree of the orphans court is that the real estate was sold subject to the lien of the mortgages, and therefore the money received represented only the equity of redemption, and the money so received should not be disbursed in the payment of the amount of the encumbrances to which the land is still liable.

On March 18th, 1881, the legislature passed an act (P. L. of 1881 p. 141), the provision of which act is

“that whenever any mortgagee or holder of any mortgage upon the real estate of any testator or intestate shall file a claim upon the debt secured by said mortgage with the executor or administrator of said testator or intestate, and it shall appear to the orphans court to be necessary to sell the lands and premises encumbered by said mortgage for the payment of the debts of said testator or intestate, the said court shall have power to order the said lands and premises sold free and clear of the encumbrance of said mortgage; provided the said court shall, at the time of making the order to sell, also order that the moneys arising from such sale be first applied to the payment of the said mortgage debt, and the balance, after paying the same, to be assets in the hands of said executor or administrator.”

Four days later the legislature passed another act, to be found in the General Statutes, page 2401, section 198. This statute requires a foreclosure of a mortgage before an action can be brought upon its accompanying bond. The effect of this legislation is to make the real estate primarily liable for the mortgage debt, and only the deficit remaining after the sale of the mortgaged property is a claim against the personalty. '

It is not contended, nor I think could be contended with success, that this act repealed the act passed four days earlier. There is no express repealer, nor is there such repugnancy between the operation of the two acts as would effect an implied repealer. Therefore, the orphans court had the power to make an order to sell the lands in question free from’ the encumbrance of these mortgages. The orphans court did not do so in the present case, but, instead, made a general order to sell the lands, and it cannot be controverted that, under such general order, only the equity of redemption in such lands could, by force of such order, be sold.

It appears, however, to my satisfaction that the sale of those lands was made as a matter of fact free and clear of encumbrances. While I do not think that the mortgages were mentioned at the time of the sale, yet I am entirely satisfied that a declaration was made, more than once during the sale, that the lands were free and clear of encumbrance, and it is obvious that the bidders so understood it. The several tracts of land covered by the mortgages were subdivided and sold in several parcels. The bidders either had no knowledge of the existence of the mortgages or they understood that they were sold free from the encumbrance of the mortgages. No person would' have bid upon one of these parcels knowing it to be covered by a blanket mortgage, without inquiring as to what portion of the mortgage it was liable. And it would have been impossible to ascertain to what extent the particular parcel sold would be called upon to answer the encumbrance which covered it as well as other parcels. The testimony shows that the property, regarding it as unencumbered, brought adequate prices. Those who expressed an opinion that it did not made no offer of a larger amount nor proved that any other person stood ready to pay more for it than it brought. The sale of the mortgaged premises brought enough to pay the amount of the mortgage. The money arising from such sale was applied to the payment of the mortgages, and the balance remained in the hands of the administrators, and it, with the proceeds of the other sales, was insufficient to pay the debts of the estate in full.

The condition of affairs thus exhibited is this: The orphans court could have ordered the property sold free of encumbrance. It was sold free of encumbrance, in exactly the same manner as if the order had been made in this shape. The purchase-money has been paid by the purchasers and disbursed by the executors, as it would have been had the special order existed. Could and should the orphans court, after the sale, have amended its order so as to have empowered the executor to sell free from encumbrances? In my judgment, if the same conditions had been exhibited in the orphans court as are exhibited here, it would have been the duty of that tribunal to amend the order for sale, so as to furnish authority to support the sale as it was actually made. Unless this is done it is apparent that it will be entirely inequitable to permit the sales already made to stand. To charge the administrators, under the circumstances, with the amount which they have paid for the liquidation of these mortgages would be in the highest degree unjust. To subrogate them to the right of the mortgagees whose mortgages have been paid, and thus reimpose upon the property in the hands of the purchasers the encumbrance of these mortgages, as to the purchasers, would be equally inequitable.

V[hat, in my judgment, is equitable is to confer the power by amendment, which would have existed had the original order been made in conformity with the statute. The amendment of an execution after a sale is not an unusual practice. Herm. Exec. 68. The power of this court, upon appeal, to make such amendment as the court below should have made is settled. Robinson v. Furman, 2 Dick. Ch. Rep. 307.

In regard to the other matters involved in the appeal I see no reason for thinking that the decree below was in any respect wrong.

I will advise a decree amending, nuna pro tuno, the order to sell the lands of decedent and affirming the decree brought up. No costs will be allowed.


author: Magie, C. J.

text:
    Thomas McMichael, appellant, v. Henry C. Webster et al., respondents.
    [Filed November 14th, 1898.]
    1. Upon the foreclosure of a purchase-money mortgage the mortgagor may claim a reduction from the mortgage debt if the quantity of land which was the subject of the purchase and sale had been falsely and fraudulently represented to be greater than that which was actually conveyed and such fraudulent misrepresentations induced the purchase. Such a defence may be now interposed by answer without cross-bill.
    2. When one who has been induced to contract for the purchase of land by fraudulent misrepresentations of its quantity, acquires knowledge before accepting the conveyance that the quantity which it will pass will not equal that represented, his acceptance of the conveyance will estop him from a rescission of the transaction. If by the tendered conveyance he is put upon inquiry and reasonable' inquiry would disclose the deficiency, a like result will follow. But when the tendered conveyance indicates that the quantity of the land is less than that which had been represented, and the purchaser calls the attention of' the vendor to the discrepancy and is assured by the vendor that the represented amount will pass by the conveyance because of accretions made along a tide-water boundary of the tract, which accretions, if the representation was true, would be included in the description and pass by the conveyance, the purchaser is not bound to resort to a survey, but may rely on the representation, and if it was knowingly false, may have relief by a deduction from the mortgage debt. Turner v. Houpt, 8 Dick. Ch. Rep. 526; S. C., 10 Dick. Ch. Rep. 593, distinguished.
    3. Waste of the mortgaged premises by the mortgagee when in possession, not as mortgagee but in some other right, cannot be set up as a defence to the foreclosure of a mortgage.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in McMichael v. Webster, 9 Dick. Ch. Rep. 478.

      Mr. Lindley M. Garrison, for the appellant.

      Mr. S. Morris Wain and Mr. John W. Wescott, for the respondents.
   The opinion of the court was delivered by

Magie, C. J.

The decree appealed from was made upon the advice of Vice-Chancellor Pitney, whose opinion is reported in 9 Dick. Ch. Rep. 478. In the opinion and the statement prefixed to it the questions raised in the cause are fully stated, and they need not be here repeated.

The decree is assailed as erroneous upon the ground that it abated from the principal sum- of $5,000, named in and secured by the mortgage given by Webster, the respondent, to McMichael, the appellant, the foreclosure of which was the object of the bill — first, the sum of $100 for waste committed by appellant upon the mortgaged premises after their sale by appellant to respondent; and second, the further sum of $3,178.80 for a deficiency in the quantity of land so sold, and awarded to appellant the sum of $1,721.30 only, for which, with interest, the mortgaged premises were' decreed to be sold.

The claim of respondents to an abatement from the mortgage in. the above and in other respects, was set up by answer alone. There was no cross-bill. The insistment was that, upon a bill for the foreclosure of a mortgage given for purchase-money, defences of that character could be interposed, by answer alone without cross-bill. The vice-chancellor held that the mortgage in question was a purchase-money mortgage and sustained the defences to the extent above indicated.

Appellant questions the correctness of the decree in respect to both the deductions from the amount of his mortgage. It will be convenient to consider first that which was allowed by reason of a deficiency in the quantity of the land conveyed by appellant to respondents and upon which the mortgage was given.

Appellant does not contend that a claim for such an allowance cannot be set up by .answer to a bill for the foreclosure of a purchase-money mortgage, and in this course was well advised, for such a practice is, we think, established beyond dispute. In 1871 exceptions to an answer, interposed to a bill for the foreclosure of a purchase-money mortgage, setting up fraudulent representations as to the quantity of title conveyed, were sustained by the chancellor on the ground .that such a defence required a cross-bill. His action was affirmed in this court. O’Brien v. Hulfish, 7 C. E. Gr. 471. In the opinion of Chief-Justice Beasley it was pointed out that, in accord with the strict rules of equity practice, relief in respect to such fraud could only be obtained by an original or cross-bill. But as the reason for that practice was that without such a bill the mortgagee was deprived of the benefit of his answer to the charges of fraud, and as the utility of a bill in that respect had been lessened since the passage of thé then recent statute authorizing á complainant to waive the verification of an answer by defendant, he suggested that the court of chancery might dispense with a cross-bill and establish a practice of setting up such a defence by answer alone.

Afterward, in 1876, the question came again before the court of chancery upon exceptions to an answer filed to a bill to foreclose a purchase-money mortgage, which set up as a defence a fraudulent representation of the quantity of land agreed to be. conveyed. Chancellor Runyon adverting to the fact that the practice of the court permitted a complainant in a cross-bill to. call for an answer without oath and so deprive the complainant in the original bill of any benefit of an answer upon oath, and the further fact that the right to any such deductions could be tried on the answer alone without any prejudice to the complainant, applied the maxim “ cessante ratione, cessat ipsa lex ,” and overruled the exceptions. Dayton v. Melick, 12 C. E. Gr. 362. Upon final hearing of that cause a decree was made for the mortgagee, not for the amount of his mortgage, but for an amount diminished by a deduction representing the difference between the quantity of land actually conveyed and that which the purchaser had been induced to believe he would acquire by his purchase, by reason of fraudulent misrepresentations of the seller. Dayton v. Melick, 5 Stew. Eq. 570. That decree was brought to this court by appeal, and two questions were thereby raised — first, whether such a defence was properly presented by-answer without cross-bill, and second, whether the proofs established the defence. The decree was reversed, but solely upon the ground that the evidence was insufficient to establish the fact that fraudulent representations had been made. The practice of permitting a defence of that sort to be interposed by answer alone was expressly approved. Melick v. Dayton, 7 Stew. Eq. 245. That practice must be considered as settled.

The contention of appellant is that, conceding the correctness of this practice, it was improperly resorted to in this case because, as he claims, the mortgage of appellant was not a purchase-money mortgage.

The transaction between the parties was an exchange of lands. The original contract was in writing, and by its terms respondents were to convey to appellant certain lands free from encumbrance and to pay him $2,500 in cash. When the parties came to perform the contract respondents were unable to make the cash payment, and it was mutually agreed that its payment should be deferred and that respondents should give appellant their bond for its payment at a future day and secure the bond by the mortgage in question. To this extent the mortgage was plainly a purchase-money mortgage. But it was also ascertained at the same time that the lands which respondents had contracted to convey were encumbered to the extent of over $2,500, and that they were unable to free them from those encumbrances. So it was further mutually agreed that appellant should accept the conveyance of those lands subject to such encumbrances, and that respondents should pay him the amount of such encumbrances as follows: All in excess of $2,500, in cash, and $2,500 at a future day, which $2,500 was to be included in the above-mentioned bond and secured by the mortgage in question. The transaction as finally concluded was therefore this: The property which respondents had contracted to give in' exchange unencumbered was recognized as diminished in exchangeable value by the amount of such encumbrances, and respondents were to make up the diminution by money, part paid at once and part to be paid in the future. Such money was clearly purchase-money. ,

The vice-chancellor properly held the whole mortgage to be for purchase-money.

It is next to be considered whether there was any error in the finding below that appellant fraudulently misrepresented to respondents the quantity of land which they were to acquire by the trade. I deem it unnecessary to discuss the proofs on that subject. The vice-chancellor saw the witnesses and heard their testimony. A careful examination of the ease compels me to say that not only do I find no ground for dissenting from his conclusions but that I entirely concur with him.

It is, however, strenuously contended that respondents are estopped from claiming any relief for an injury resulting from a deficiency in the land conveyed them. It is insisted that such estoppel arises because they had notice, or whát was equivalent to notice, that the conveyance would riot pass to them the quantity of land which had been represented, but a much less quantity, and that with such notice they accepted the conveyance.'

When one who has been induced to enter into a contract by false and fraudulent representations, - learns of the. deception before the performance of the contract, doubtless he may refuse to perform it. If with knowledge, or what- is equivalent to knowledge, of thé fraud he proceeds to' perform and obtains the benefit of a performance he will not be permitted to rescind but will be .deemed to have elected to take what he got by the performance. This doctrine is illustrated by the case of Turner v. Houpt, where there was a contract for the exchange of lands described in an attached memorandum, which contract was expressly declared to be binding on the parties only “ if each property is found to be on examination as described herein.” The attached memorandum contained a detailed statement of many improvements upon the land to be conveyed to Turner, the existence of which could be verified by observation. The proofs showed that Turner visited and examined, or had the opportunity to examine, that laud and to observe the improvements thereon. Thereafter he accepted the contract by a memorandum in writing appended to it. Afterwards he accepted the conveyance. A decree directing a reconveyance to Turner’s representatives on the ground that the description of the property was false was reversed in this court. The memorandum of our decision does not specify the reasons for reversal, but so far as the above-mentioned point is concerned it went upon the ground that when Turner, having made, or had the opportunity to make, the examination the contract called for and to verify the description by his observation, afterwards affirmed and performed the contract, he was estopped from rescinding it. Turner v. Houpt, 8 Dick. Ch. Rep. 526; S. C., 10 Dick. Ch. Rep. 593.

Whether the same doctrine is applicable to the partial rescission which results from making allowances or deductions from the thing contracted for because of misrepresentations need not be determined, for'the facts do not justify the inference that respondents acquired any knowledge, actual or constructive, that the conveyance to them would pass a less quantity of land than had been represented before the conveyance was accepted.

The contention on this point is that the deed intended to’be executed to convey appellant’s land to respondents, which described the land by metes and bounds and as containing, a fraction over one hundred and forty-nine acres, was in the hands of-respondents or their agent for some-days before its execution and delivery; that respondents thereby acquired knowledge that the tract did not comprise one hundred and eighty-five acres, as had been represented, or if actual knowledge thereof was not acquired, that they were put upon inquiry, and such inquiry should have induced a survey which would have disclosed the truth, and that after such knowledge as was or ought to have been acquired by respondents they accepted the conveyance.

The vice-chancellor found upon .the evidence that respondents had no actual personal knowledge that the description in the deed called for only one hundred and forty-nine acres or a fraction. This conclusion was, I think, entirely warranted, but is of little consequence because it appears that respondents’ attorney,employed to examine the title and entrusted with the acceptance of the conveyance, did have knowledge of the fact. Such information doubtless put' the intending purchasers on inquiry,-and under some circumstances a reasonable inquiry might require a survey. But there were no such circumstances. The evidence amply justifies the conclusion of the vice-chancellor that respondents’ agent, on discovering the description of the quantity of the land contained in the deed to be less 'than represented, called the attention of appellant to that fact, and that appellant then averred that the real quantity of land which the deed would convey was the one hundred and eighty-five acres previously represented and contracted for, and that the amount was made up by accretions along the line of a tide-water creek, which was a boundary of the tract. The description of the tract in the deed was such that if the represented accretions had been in fact made they would pass by it to the grantee. Respondents having made inquiry and received this plausible explanation of the observed discrepancy, were obviously not bound to test its accuracy further. That such explanation was knowingly false was found below, and I concur entirely in that conclusion.

The result is that a case for deduction from the mortgage debt upon this ground was clearly made out, and as no question* is made as to the amount allowed the decree is to that extent correct.

It remains to consider whether the deduction from the mortgage debt made on account of waste of the mortgaged premises is open to the objection of appellant.

The waste claimed consisted in the removal from the mortgaged premises of some growing trees and some farm bridges and sheds by the mortgagee after the date of the contract of sale and in part after the delivery of the conveyance of the land.

A mortgagee in possession may doubtless be compelled to account for his waste of the mortgaged premises and to submit to a deduction therefor from the mortgage debt. Such allowance may be made upon a bill to foreclose the mortgage if -the claim is presented by cross-bill. Onderdonk v. Gray, 4 C. E. Gr. 65; Davis v. Flagg, 17 Stew. Eq. 109. It does not appear that the court of chancery has adopted the practice of permitting such relief to be obtained by defendant by answer alone.

But an obvious essential to such relief is that the mortgagee, when committing waste, was in possession as mortgagee and not in some other right. Davis v. Flagg, ubi supra. Herein, in my judgment, is the infirmity of this branch of the decree. Part of the injury to respondents occasioned by appellant’s acts was done while appellant was vendor in possession pending the performance of .a contract of sale. The remaining injury was done after the delivery of the deed but while grantor remained in possession under a clause in the contract of sale. Prior to the delivery of the deed appellant was not mortgagee. After delivery he was mortgagee, but his possession was not under the mortgage but under the contract.

For an injury done to the corpus of the estate while thus in possession appellant was undoubtedly liable to respondents and such liability could be enforced by an action at law. It created an independent personal demand in nowise growing out of the mortgage relation. It was therefore incapable of being interposed as a defence to a bill to foreclose. Brown v. Coriell, 5 Dick. Ch. Rep. 753.

It results that this part of the decree cannot be sustained.

The decree must therefore be reversed and a new decree made in conformity with these views.

For reversal and modification — The Chief-Justice, Depue, Dixon, Lippincott, Van Syckel, Adams, Nixon — 7.

For reversal in full — Collins, Garrison, Ludlow, Bo-GERT — 4

For affirmance — None.


author: Dixon, J.

text:
    Frederick W. Schmalz (who sues for the benefit of the members of the Union Hat Makers’ Association of Newark, New Jersey), appellant, Edwin Wooley and Frederick S. Crane, partners, &c., respondents.
    [Filed November 14th, 1898.]
    1. The “Act to provide for the adoption of labels, trademarks and forms of advertising by associations or unions of workingmen, and to regulate the same,” passed in the year 1889, and the acts on the same subject passed in 1892 and 1895 (Gen. Stat. p. 3678 et seq.), do not violate the constitutional interdict against the passage of special laws granting exclusive privileges.
    2. The title of an act passed March 21st, 1892, is “A further supplement to an act entitled ‘An act to protect trade-marks and labels.’ ” — Held, that the title constitutionally expressed the object of the law, the protection of trademarks and labels, although in fact there was no prior act entitled “An act to protect trade-marks and labels.”
    3. According to general principles, a workman,- or a number of workmen engaged in the same branch of industry and banded together for their mutual profit in the pursuit of their common vocation, may acquire a right of property in a trade-mark designed to distinguish their workmanship from that of other pei'sons, and a trade-mark so owned is entitled to the same protection as other trade-marks.

      On appeal from an order advised by Vice-Chancellor Stevens, whose opinion is reported in Schmalz v. Wooley, 11 Dick. Ch. Rep. 649.

      Mr. Joseph A. Beecher, for the appellant.

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

Dixon, J.

The bill in this case was filed in February, 1897, by the president of the Union Hat Makers’ Association of Newark, for the use and benefit of all the members thereof, to enjoin the defendants from using a counterfeit trade-mark and label made in imitation of a trade-mark and label which had been adopted and filed by the said association in accordance with the provisions of the several acts of the legislature passed in the years 1889, 1892 and 1895. Gen. Stat. p. 3678 et seq. The defendants demurred to the bill, and, the demurrer having been sustained, the complainant appeals.

The act of 1889 is entitled “An act to provide for the adoption of labels, trade-marks and forms of advertising by associations or unions of workingmen and to regulate the same.” It provides (section 1) that it shall be lawful for associations and unions of workingmen to adopt, for their protection, labels, trade-marks and forms of advertisement, announcing that goods manufactured by members of such associations or unions are so manufactured; (section 4) that every such association or union adopting a label, trade-mark or form of advertisement as aforesaid, shall file the same in the office of the secretary of state, by leaving two copies, counterparts or fac similes thereof, with said secretary; and (section 5) that every such association or union adopting, &c., may proceed by suit in the courts of this state to enjoin the manufacture, use, display or sale of any counterfeit of their label, trade-mark or form of advertisement, and that all courts having jurisdiction thereof shall grant such an injunction.

The demurrants do not deny that the bill presents a case in conformity with this act, except in this respect, that under the act the bill should be filed by the association or all its members, and not by one member alone. In our opinion the act empowers the association to proceed by suit, making it for this purpose a gmsi-corporation, and therefore does not of itself entitle a single member to maintain the action. But this objection is obviated by section 4 of the act of 1892, if valid, which provides for the bringing of such proceedings in the name of any member duly authorized by the association or union for that purpose. We ai’e therefore brought to the main questions raised as to these statutes.

The demurrants contend that the act of 1889 violates that provision of the constitution (article 4, section 7, paragraph 11) which forbids the passage óf private, local or special laws granting to any association, corporation or individual any exclusive' privilege, immunity or franchise whatever. Their position 3s¡ that, as the privileges of this act are confined to associations or unions of workingmen for the protection of goods manufactured by their members, and are not offered to other workingmen who may not choose to form associations or unions or to persons generally, the privileges are therefore exclusive and the act is special.

"VVe do not agree to this conclusion.

All the legislation, of the state respecting societies, associations and corporations is based upon the idea that privileges which are denied to single individuals may be conferred upon groups of persons, and nothing in the constitution was intended to subvert this doctrine. If the legislature offers to any. class of persons privileges peculiarly appropriate to their class, on condition that several of them shall unite for the purpose of accepting and exercising them, the constitution will not thereby be infringed. The privileges of this act are offered to all workingmen engaged in the manufacture of goods who thus unite, and they relate to goods of every description manufactured by them. Certainly, workingmen engaged in the manufacture of goods constitute a distinct class of persons, and there is a manifest appropriateness in enabling any of them who comply with the act to provide and protect a mark distinguishing the products of their labor and skill. Nor is it at all necessary that a similar privilege should be given to those who are not workingmen, but are only employers of workingmen. Such persons stand in a different class with respect to the exercise of those faculties which the legislature intended to foster.

We think this act is constitutional.

The act of 1892, with its amendment of 1895, seems not to be exposed to the objection just considered, for their provisions extend to any persons and any association or union of workingmen adopting a label or trade-mark to distinguish any merchandise or product of labor made, packed or put on sale by such persons, association or union. But these acts are assailed on the ground that their titles do not comply with that provision of the constitution (article 4, section 7, paragraph 4) which declares that

“to avoid improper influences which may result from intermixing in one and the same act such things as have no proper relation to each other, every law shall embrace but one object, and that shall be expressed in the title.”

The title of the act of 1892 is “A further supplement to an act entitled An act to protect trade-marks and labels.’ ” That of the act of 1895 is “An act to amend an act entitled ‘A further supplement,”’ &c., quoting the title of the act of 1892. The objection urged is that there existed no act entitled “An act to protect trade-marks and labels,” and therefore entitling these acts as supplements or amendments of such an act was misleading. But, conceding this, the inquiry is not concluded. The question still remains, was the title misleading as to the object of the act — did not the title, in spite of its false assumption of the existence of a prior statute, fairly express the object of the proposed legislation ?

On reading the act it will be perceived-that its object is to protect trade-marks and labels, and that for this purpose it is a complete and independent enactment. To express that object in the title no particular form of words is required, nor is it necessary that the object should be expressed with precision. It is enough if the title be so phrased as to inform the legislators and the public of the subject-matter of the act. As was said by Mr. Justice Depue in Grover v. Ocean Grove, 16 Vr. 399, 404, “ the standard uniformly adopted for determining whether the legislature has complied with the constitutional requirement is whether the title of the act is such that by it the members of the legislature are informed of the subject to which the act relates and the public notified of the kind of legislation that is being considered.” Bumsted v. Govern, 18 Vr. 368; S. C. on error, 19 Vr. 612. Tested by this standard, these titles seem to be sufficient. They clearly indicate that the subject of legislation is trade-marks and labels and that the purpose is to protect them. True, they state that this is to be done in the form of supplements, but that does not affect the object of the statutes. In our legislation a formal supplement to an act is not necessarily a statute which supplies defects in its predecessor. It may be one that abrogates the preceding enactments and substitutes radically different provisions. Hence the mere calling of an act a supplement to another designated act expresses nothing of its object. Thus, if the title were “A supplement to assembly bill No. 10, which became a law on July 4th, 1876,” the constitutional requirement would not be satisfied because the title would not at all express the object, while the title “An act to define more accurately the crime of murder of the first degree” would fully express the object, although the act, in form and substance, were only a supplement to section 68 of the Crimes act. Entitling an act a supplement to a former act complies with the constitution only when so much of the original title is recited as expresses the object of the proposed law, and if that object be expressed the constitution does not defeat the statute merely because it is erroneously styled a supplement.

We therefore conclude that these acts are valid so far as they are necessary to sustain the complainant’s bill.

We also think that upon general principles the substance of the bill is sufficient.

It alleges that a company of journeymen hatters, calling themselves the Union Hat Makers’ Association of Newark, New Jersey, have, in common with similar associations formed elsewhere, adopted a certain label or trade-mark of which the following is a copy:

that for ten years last past they have used said label or mark to designate and distinguish ■ the hats made by members of the association by affixing it upon each of those hats, and that fop about three years last past the defendants have used a fraudulent imitation of that mark upon the hats made and sold by them, thereby deceiving the public, violating the rights of the members of the association and depriving them of large profits which they would otherwise have gained.

These allegations seem to present a case of'inequitable infringement of the association’s right of property in its trade-mark or label. In McAndrew v. Bassett, 4 De G., J. & S. 380, Lord Westbury said: “The essential ingredients for constituting an infringement of that right probably would be found to be no other than these, first, that the mark has been applied by the plaintiffs properly — that is to say, that they have not copied any other person’s mark and that the mark does not involve any false representation; secondly, that the article so marked is actually a vendible article in the market, and thirdly, that the ■ defendants, knowing that to be so, have imitated the mark for the purpose of passing in the market other articles of a similar description.” These views received the approval of Lord ’Cairns, sitting in the court of appeal, in Maxwell v. Hogg, L. R. 2 Ch. App. 307, 314, and accord with the great weight of authority on this much-litigated subject. The present bill clearly sets out the adoption and proper application of the mark by the association and its fraudulent imitation for the interdicted purpose by the defendants. It is not so explicit as to the second ingredient mentioned by the learned chancellor, but the court does not need to be told that hats made by a company of journeymen hatters during ten years were actually vendible articles in the market; so much will be inferred.

But the objection urged by the defendants against the bill is that it does not allege, and the court cannot infer, that the journeymen owned the hats made by them, and it is insisted that ownership of the article to which the trade-mark is affixed is necessary to the acquisition of a right in the mark. To support this claim Schneider v. Williams, 17 Stew. Eq. 391, is cited. Some expressions in the opinion of the able judge who decided that case certainly give countenance to the present objection, but on consideration I think those expressions will appear to be unwarranted. Thus in defining the means by which a person will acquire an exclusive right to a trade-mark, he says: “ Eirst, he must select or adopt some mark or sign not in use to distinguish goods of the same class or kind already on the market, belonging, to another trader; second, he must apply his mark to some article of traffic, and third, he must put his article, marked with his mark, on the market.” Now it is undisputed that this association has complied with the first two of these requirements ; only in respect to the third has it failed. It did not itself put upon the market its own articles marked with the label. But it is doubtful whether the learned judge intended this third requisite to be so strictly read, for he immediately "added: “Mere adoption of a mark or sign and a public declaration by advertisement or otherwise that a person will at a subsequent time put a particular thing on the market, marked or distinguished in a certain way, create no right. • Until the thing is actually on the market, marked by the particular mark of the person intending to acquire a title, no property right in the mark arises.” This seems to indicate that it was the actual marketing of the marked article, and not the person by whom it was marketed or owned, on which stress was laid. And why should this specific personal element be deemed important? The public object sought in the protection of trade-marks is to bring upon the market a better class of commodities, and the means for attaining that object is by securing to those who are instrumental in supplying the market whatever reputation they gain by their efforts toward that end. The workman by whose handicraft the commodity is made is one of these instruments, just as is his employer who furnishes the raw material and owns and sells the finished product; and if the former is permitted by the owner to place upon the commodity a mark to indicate whose workmanship it is and thereby commend his workmanship to other employers, this license from the owner should be deemed a right against everybody else. His aptitude in his trade is his property, and if by a mark he can have it identified as his in the market, he may enhance its salable value and thus secure the same sort of advantage as his employer by similar means. No reason exists why this advantage should not be protected by the courts in the same manner and to the same extent as is the like advantage of the employer. The mere fact that one rather than the other of these persons has placed the product upon the market has no rational bearing upon the matter, for both alike have had the market in view in the efforts they have made and through those efforts the market is supplied.

A different objection to a suit of this nature was sustained in Weener v. Brayton, 152 Mass. 101, namely, that the label did not indicate by what persons the articles labeled were made, but only indicated that they were made by one of many persons who were not connected with each other in any business. The first clause of this objection would unduly restrict the law of trademarks as everywhere recognized, for it is established that, whatever be the quality indicated by a trade-mark, the mark need not point out the particular person from whom that quality is derived. The law has placed no limit upon the number of persons who may unite for business purposes and jointly acquire property in a trade-mark, and yet it is evident that, if there be many, some of them may have no personal share in producing the article identified by the mark. The second clause in the objection assumes what does not appear to be true in the case before us. We understand from the.bill that the members of the association represented by the complainant are connected together as journeymen hatters; that their skill in this trade and their mutual assistance in profiting by its practice form the motive and chief aim of their association. This connection is as clearly one for business purposes as is that of members in a partnership or of stockholders in a corporation. Although it is a comparatively novel species of relationship, it has become an established one, and therefore calls for the application of those general principles of law and equity which are applied to other species of business associations. According to these principles, we think a workman or a number of workmen engaged in the same branch of industry and banded together for their mutual profit in the pursuit of their common vocation, may acquire a right of property in a trade-mark designed to distinguish their workmanship from that of other persons, and that a trade-mark so owned is entitled to the same protection as other trade-marks.

The decree below should be reversed, and the demurrer overruled.

For reversal — Collins, Depue, Dixon, Garrison, Lippincott, Ludlow, Van Syckel, Adams, Bogert, Hendrickson, Nixon, Vredenburgh — 12.

For affirmance — None.


text:
    Andrew H. Brinkerhoff, Garrabrant R. Alyea, The Hillside Cemetery Association et al., appellants, v. Edward A. Ransom, trustee for Harry F. Watson and Thomas P. Watson, respondent.
    [Filed November 14th, 1898.]
    1. A debtor died seized of land encumbered by mortgage and assessment for all it was worth, and left a will devising it to his widow and children. Several years afterwards, when the mortgage was being foreclosed, the devisees, in ignorance of the debt, conveyed the land to a near relative, in the hope that the latter by his enterprise might make it more valuable. This hope was realized. Then the creditor sued the devisees-at-law for their testator’s debt, and the devisees pleaded that the estate devised was worth only §1, and that they had aliened it before action brought. To this the creditor replied that it was worth more than §1, viz., §50,000, but raised no question as to the alienation. On the trial the jury found that the estate devised was worth only §1, as the devisees had alleged. On the verdict the creditor entered judgment for the debt to be levied of the estate devised, issued execution thereon, and at the sheriff’s sale became the purchaser for a nominal price. He thereupon filed a bill in chancery to set aside as fraudulent the conveyance made by the devisees. — Held, that he was not entitled to the aid of a court of equity in that behalf, and that the bill should be dismissed.
    2. In an action at law against heirs and devisees, an averment in a plea that the defendants had aliened their ancestor’s estate before the action was commenced, is material and traversable, and a failure on the part of the plaintiff to reply thereto is an admission of a bona fide alienation.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in Ransom v. Brinkerhoff, 11 Dick. Ch. Rep. 149.

      Mr. Charles L. Oorbin, for the appellants.

      Mr. Edward A. Ransom and Mr. James B. Vredenburgh, for the respondent.
   The opinion of the court was delivered by

Dixon, J.

On February 17th, 1891, the ordinary of the State of New Jersey, suing for the use and benefit of Harry F. Watson and Thomas P. Watson, recovered a judgment in the supreme court against Andrew H. Brinkerhoff, Ellen A. Berry, Martha Alyea and Kezia Van Riper, the devisees of George C. Brinkerhoff, deceased, for the sum of $50,000 and costs, to be levied of the lauds of which the said George C. Brinkerhoff died seized, and which were devised to the said defendants by his last will.” By virtue of an execution on this judgment the sheriff of Bergen county, on October 10th, 1892, made sale and conveyance to Addison Ely, as trustee for said Harry and Thomas Watson, of the land now in controversy, containing about one hundred and forty acres. The price was nominal only. The title of Ely is vested in the complainant, who has filed the present bill as trustee and for the benefit of said Harry and Thomas, to set aside as fraudulent and void certain conveyances made by the said devisees and their grantees before the action at law was instituted. It thus appears that, discarding mere names, the real prosecutors of the suit at law and of this suit are the same persons, Harry F. and Thomas P. Watson, and the question is whether they present a case calling for the intervention of a court of equity.

The testimony shows that the land was the homestead farm of George C. Brinkerhoff, and comprised substantially all the property that he owned at his death, in March, 1879. It consisted about equally of upland and meadow, the latter of very little value, and was then encumbered by a mortgage for $12,000 and a municipal assessment, levied in 1875, for $1,223. In April, 1882, his widow (who had remarried) and his children found themselves unable to pay the interest on the mortgage, the assessment was rapidly increasing by the accumulations legally consequent upon it, the taxes were in arrear, and the mortgagees had instituted a suit to foreclose the equity of redemption. At this time the rights of the devisees in the testator’s property were a life estate in one-third for the widow, ICezia Van Riper, subject thereto a legacy of $15,000 to the daughter Ellen, and one of $20,000 to the son, Andrew, which were charged upon the realty, and the fee of the residue to the daughters Ellen and Martha and the son, Andrew.

Seeing that their estate was likely to be swept away by foreclosure, the family endeavored to sell the farm to outsiders, but could not, and then, in the hope that something might be saved to them from it, they conveyed it, on April 22d, 1882, to the son, Andrew, and Garrabrant R. Alyea, the husband of the daughter Martha. Their expectation was that the available part of the farm should be converted into a cemetery, a project which the testator himself had once had in mind. Late in the year 1883 this expectation was realized by the organization of the Hillside Cemetery Association and the conveyance to it of about forty acres of the farm. At this time none of the devisees was aware, nor was Garrabrant R. Alyea, that any claim existed against the testator’s estate by reason of his bond to the ordinary, upon which the judgment before mentioned was recovered. In the lifetime of the testator his family had heard of some undefined trouble because of it, but afterwards he had told them it was all settled, and the lapse of several years without further notice had confirmed his assurance. During this period, even, the estimated value of the farm scarcely exceeded the encumbrances, and it was impossible to sell the devisees’ interest for anything. After receiving the conveyance in April, 1882, and as well before as after the organization of the cemetery company, Alyea and Brinkerhoff devoted much time to the preparation and improvement of the property for cemetery purposes. They also both incurred personal obligations, and Alyea expended considerable money to the same end. In consequence thereof it may be that in July, 1890, when the Watsons instituted the suit at law, the property had acquired a value beyond the encumbrances.

Shall this court aid the Watsons in securing that value towards the payment of their claim ?

The circumstances satisfy us that that value was the result of the efforts of Andrew H. Brinkerhoff, not as devisee of his father but in his own behalf and in behalf of his sisters, and of the efforts and money of Garrabrant R. Alyea, put forth in the honest belief that they were bona fide purchasers of the farm. Neither of them was under any personal obligation to the Watsons, and it is not equitable that the profits of their enterprise should be taken from them for the Watsons’ benefit. Had the latter proceeded to enforce their claim with reasonable diligence the enterprise of Alyea and Brinkerhoff would not have been undertaken or would have been soon abandoned. A brief reference to dates will make this evident.

George C. Brinkerhoff’s bond to the ordinary was given in June, 1872, to secure the faithful performance of duty by Frederick A. Watson (a half-brother of the complainants) as the administrator of James S. Watson, their father. The administrator’s default occurred in the lifetime of George C. Brinkerhoff, before 1879, but not until five years afterwards, in May, 1884,, was application made to the ordinary for his consent to the prosecution of the bond. At that time the complainants had both attained their majority, and if they had then proceeded against the devisees the labors of Alyea and Brinkerhoff would have been saved, but nothing substantial would have been realized on the complainants’ claim. They did not proceed, however, until July, 1890, and during all this interval not only the public records but the work upon the ground also showed that Brinkerhoff and Alyea were acting as bona fide purchasers of. the farm. Under these circumstances, if the complainants intended ever to challenge the bona fides of the purchase, their delay was inequitable. But we think the record of the suit at law clearly indicates that they had no such intention, and fairly excludes them from now making the attempt. And this brings us to consider that record.

The declaration, after setting forth the bond of George C. Brinkerhoff and the breach of its condition in his lifetime, alleged that he had died March 11th, 1879, leaving a will devising to the defendants lands of great value, which they then still held. The defendants’ pleas deny the making of the bond and the breach, admit the devise of the equity of redemption in the farm, setting forth the pertinent clauses of the will, and aver that that equity was of small value, to wit, of $1 and no more, and had been sold, aliened and made over by the devisees thereof before the commencement of the suit. The plaintiff, replying to these pleas, joined issue on the making and breach of the bond, and as to the other pleas averred that the equity of redemption so devised was of great value, to wit, of the value of $50,000, and thus concluded to the country.

Although these pleadings were not in the form prescribed by the Heirs and Devisees act (Gen. Stat. p. 1679), they were in substance equivalent, and presented issues for an inquiry by the jury as to the value of the laud devised. On the trial of these issues in the Bergen circuit the jury found the making and breach of the bond, as the plaintiff had alleged, and that the equity of redemption devised to the defendants was of the value of $1 and no more, as the defendants had alleged.

The replication of the plaintiff was an admission that the devisees had, bona fide, aliened the equity of redemption before suit brought, for it is a rule in pleading that where in the pleading of one party there is a material averment which is traversable, but which is not traversed by the other party, it is admitted (Toland v. Sprague, 12 Pet. 300, 335; Ballantine v. Haight, 1 Harr. 196, 200; 1 Chit. Pl. 611); and such an admission estops the party from contradicting that which was admitted. Cowlishaw v. Cheslyn, 1 C. & J. 48.

The averment in the pleas that the devisees had before the commencement of the action aliened the estate devised was certainly a material one, for, if true, the plaintiff’s judgment, according to the statute, could only be that the defendants should answer for their ancestor’s debt to the value of the estate devised, as if the same were their own proper debt, while, if false, the plaintiff would be entitled to a special judgment to levy the debt of the lands devised. Note to Jeffreson v. Morton, 2 Saund. 6, 8; Muldoon v. Moore, 26 Vr. 410; Fredericks v. Isenman, 12 Vr. 212. It was also a traversable averment, and in the traverse would be involved the question whether the alienation was bona fide. Thus, in Gooch’s Case, 5 Rep. 60, where the heir had pleaded “riens per descent the day of the writ purchased,” the plaintiff was allowed to prove that á feoffment made by the heir before action brought was made of fraud and covin to defraud the plaintiff and so was void as to him by the statute of 13 Eliz. ch. 5. On this proof the king’s bench rendered judgment for the plaintiff, thus holding that an alienation fraudulent in fact was no alienation in law, and, e converso, that an alienation in law was one not fraudulent in fact.

When, therefore, in the record now before us, the plaintiffs left undenied the averment of alienation before suit brought, they conclusively admitted an alienation valid in law, i. e., bona fide, and on that admission they proceeded to deny the other averment as to the value of the lands, an averment which, in the absence of a bona fide alienation, would be utterly immaterial. They thus put aside the opportunity legally presented by the devisees for a full and fair trial before a jury of the bona fides of the conveyances which they now seek to overturn as fraudulent. Having had their day in court and having declined the duly-proffered contest, it is but just that they should not again vex their adversaries.

But it is urged the judgment entered in the supreme court that the debt should be levied of the land devised, being one which could be lawfully rendered only in case the land had not been bona fide aliened before suit brought, legally implies the non-existence of such an alienation and operates as an estoppel against the then defendants, one of whom, Andrew H. Brinkerhoff, appears still to have some estate in the land. That may be true, and perhaps a court of equity cannot deprive the complainants of whatever legal advantage that judgment and its execution have given them in respect to the estate devised. But the question whether a court of equity shall render active assistance to enforce the judgment and execution is a very different matter. It is not enough that complainants come into a court of equity with a legal advantage ,• they must come with a cause essentially equitable. As was said by Chancellor Vroom in Disborough v. Outcalt, Sax. 298: “Courts of equity consider the rights growing out of a judgment and execution at law as legal rights, and while this court will, on various principles of equity, aid the courts of common law in the prosecution of legal rights, it will not undertake to enlarge or extend them. * * * A court of equity will in some eases aid execution creditors to obtain satisfaction of their demands. But to warrant its interference there must be some equitable ground presented. The court will then act on its own established principles.”

According to those principles we think the complainants are not entitled to our-aid.

The intrinsic worthlessness of their claim against the estate of their debtor, their laches in failing to attempt its enforcement while the defendants, ignorant of its existence, were trying to improve property which they honestly believed to be their own, the entire lack of any obligation, legal or equitable, on the part of the defendants to yield up the fruits of their efforts to the complainants, the refusal of the complainants to advance, at the proper time and before a competent tribunal, the claim now made and their admission upon the record that it was groundless, justify a court of equity in denying them relief.

The decree below should be reversed and the bill dismissed.

For reversal — Collins, Depue, Dixon, Lippincott, Ludlow, Van Syckel, Adams, Bogert, Hendrickson, Nixon, V REDENBURGH — 11.

For affirmance — None.