author: Reed, Y. C.

text:
    Joseph M. Forst and William S. Covert, partners, &c., v. Maria Kirkpatrick et al.
    [Filed March 20th, 1903.]
    1. Where a mortgage is given a firm, and thereafter one of the members retires, the new firm, although pursuing the same business and under the same name, cannot enforce the obligation unless the right to enforce it is acquired by a new contract.

      2. Where, after the dissolution of a firm, an account with it is carried on as a running account with the succeeding firm, payments made to the succeeding firm, unless appropriated, will go to discharge the oldest items of the account.
    On bill to foreclose.

      Mr. Barton B. Hutchinson, for the complainants.

      Mr. James Buchanan, for the defendant Maria Kirkpatrick.

      Mr. Scott Scammell, for the defendant Maria E. Vroom.
   Reed, Y. C.

The mortgage sought to be foreclosed was made by Alexander Kirkpatrick, the husband of Maria Kirkpatrick, the defendant, to Daniel P. Eorst, William H. Skirm, Charles W. Leeds and Joseph M. Eorst, partners trading as D. P. Eorst & Company. It was executed March 18th, 1875, and purported to be made to secure the sum of $1,300. Mr. Leeds and Mr. D. P. Eorst are dead, and William H. Skirm has assigned his interest in all the assets of the firm to the present members of the firm of D. P. Eorst & Company, who are the complainants.

On January 13th, 1876, Alexander Kirkpatrick, through one Charles Huston, conveyed the property mortgaged to his wife, Maria, who now owns the equity of redemption.

Previous to and at the time the mortgage was made the firm of D. P. Eorst & Company were wholesale dealers in groceries and provisions, and Alexander Kirkpatrick was a retail dealer in the same articles, and bought his supplies from the firm. At the date of the mortgage he owed the firm $1,286. Contemporaneous with the execution of the mortgage the following paper was signed by the firm:

“Whereas, Alexander Kirkpatrick and wife have this day executed and delivered to Daniel P. Forst, William H. Skirm, Charles W. Leeds and Joseph M. Forst, partners, trading as D. P. Forst & Co., a bond and mortgage on a certain lot of-land and premises, situate on the easterly side of Clinton street, in the city of Trenton, N. J., securing the payment of the sum of $1,300, with interest, in one year from the date thereof. Now we do hereby certify that the said bond and' mortgage were executed and delivered to us as collateral security for the present and future indebtedness of the said Alexander Kirkpatrick to the said firm of D. P. Forst & Co.”

After ,the execution of these papers Alexander Kirkpatrick continued to deal with D. P. Forst & Company as before, and the amount due to the firm on March 18th, 1875, was carried along as a part of the current account until the final close of the account on May 6th, 1899.

On January 31st, 1879, Charles W. Leeds withdrew from the firm, releasing his interest therein to the remaining partners. On January 1st, 1883, William S. Covert became a member of the firm. On May 9th, 1897, Daniel P. Forst died, bequeathing his interest in the firm to Joseph M. Forst. On July 1st, 1901, William H. Skirm retired, transferring his interest to the remaining partners, the complainants herein.

During the entire life of the current account between the parties cash was received from time, to time and credited to Alexander Kirkpatrick.

In 1883, 1884 and 1886 certain payments were made by Mrs. Kirkpatrick, viz.: April 6th, 1883, $50; May 31st, $25; June 27th, $25; September 25th, $30; in 1884, April 21st, $30; November 10th, $40; in 1886, July 21st, $50. It appears that nothing was said, at the time of these payments, or indeed at the time of any other payment, respecting the bond and mortgage in suit. The payments made by Mrs. Kirkpatrick were entered in a passbook, in the possession of Mrs. Kirkpatrick, under the following heading: “Alexander Kirkpatrick, in account with D. P. Forst & Co.”

The question is whether, after the lapse of time since the execution of the mortgage, it can be now enforced ?

The defendants insist that inasmuch as more than twenty years intervened between the execution of the mortgage and the filing of this bill, without recognition by the mortgagor or by Mrs. Kirkpatrick of the existence of the mortgage, the right of entry is barred.

On the part of the complainants it is insisted that there have been pajonents upon the mortgage debt, which have kept the mortgage alive. It is suggested by the counsel for the complainants that the firm of D. P. Forst & Company was an entity, which continued in existence during all the fluctuations in its membership ; that the security of the mortgage covered all the merchandise sold by these different firms, and that all payments made to them must be regarded as payments upon the debt secured by the mortgage.

It is entirely settled, in respect to the contractual relations between a firm and another person or firm, that those relations are confined to the members of the firm with whom the contract was made. Upon the death or discharge of a member, or upon the introduction of a new member, the new combination constitutes a distinct entity. The new firm, although pursuing the same business, under the same name, as the preceding firm, is irresponsible for, and unable to enforce, the obligations of the contract with the dissolved partnership, unless such responsibility is assumed, or the right to enforce is acquired, by a new contract. A mortgage given to a firm can be enforced only by the members, or surviving members, of that firm. Where securities have been deposited in a bank to secure future advances, and a change has occurred in the banking firm before the making of some of the advances, prima facie, the securities extend only to those advances which are made by the firm whilst its members continue the same as when the securities were deposited. And similarly, if a partner pledges his separate property for future advances to be made to his firm, and he afterwards dies, an advance made after his death to his surviving partners will not be chargeable against the property pledged. Lind. Part. Mortg. 119; Abat v. Penny, 19 La. Ann. 289.

It requires a new agreement to extend the security given to the old firm, for advances by it, so as to make the security available* to cover advances made by a new firm. In Kensington ex parte, 2 Ves. & B. 79, deeds were deposited with a firm of bankers, to remain as collateral security for the balance of any sum which the bankers might at any time advance for the borrower’s account. One of the members of the firm of bankers retired, and advances were afterwards made to the borrower. Lord Elden held that the security originally only covered advances made while the firm remained the same, and that there must he an agreement proved to make it cover subsequent advances.

In Ex parte Alexander, 1 Glyn. & J. 409, the same rule was applied; but an agreement was found to have been made, after the change of partnership, expressly pledging the same securities with the new firm to secure the debt of the old, as well as the debt of the new, partnership. . '

In Ex parte Marsh, 2 Rose 328, a new agreement was found upon the construction of a letter written to the new firm.

In the present case there is not a scrap of testimony to show any such agreement. It does not appear that the bond and mortgage were ever named between the parties from the date of its execution. It follows, therefore, that the mortgage of March 18th, 1875, secured only the monej^s then due and advances made up to the date of the retirement of Mr. Leeds, on January 31st, 1879. At that date there was due to the firm, for the balance due at the time of the execution of the mortgage, together with advances subsequently made, less payments of cash by the mortgagor, a balance of $1,221.27.

Now, as already remarked, in no payment, and therefore, of course, in no’ payment subsequent to January 31st, 1879, was the bond and mortgage mentioned, nor was there any request whatever that the sums paid should be applied to any particular account. There was no appropriation of payment made by the payers. By the firm these payments were entered on the, credit side of the running account as they were made.

At this point the doctrine of appropriation of payment intervenes. As I have already remarked, the balance due the firm at the time of the execution of the mortgage was carried along in the current account down to 1899. Subsequent to January 31st, 1879, there appears to have been paid to the firm, and credited to Alexander Kirkpatrick in its books of account, sums amounting to $4,961.08, exclusive of the notes accepted by the firm'and materials returned h> the firm.

The well-known rule respecting the appropriation of payments to running accounts is that on a failure of the payer to appropriate, the law will discharge the first debit items. Since the case of Devaynes v. Noble, 1 Meriv. 529, the rule has been recognized that if, after dissolution of a firm by a change in the partnership, an account is carried on as a running account with the succeeding firms, payments made to subsequent firms, unless appropriated by the party, will go to discharge the oldest items of the acccount. Bates Part. § 497; Simson v. Cooke, 1 Bing. 452; Bodenham v. Purchas, 2 Barn. & Ald. 39; Pemberton v. Oakes, 4 Russ. 154; Bank of Scotland v. Christie, 8 Cl. & F. 214.

This case, then, seems to stand thus: The only payments made upon the mortgage debt are not so made expressly by the payer, but only by legal appropriation, and they can in no way be regarded as a recognition by the payer of the existence of the mortgage. If, however, it could be regarded as a payment upon the mortgage, the application of such payments extinguishes the mortgage debt entirely. I am therefore constrained to the conclusion that the complainants’ bill mtist be dismissed.


source: Caselaw Access Project

license: Public Domain

text:
    Charles G. Henderson et al. v. City of Atlantic City.
    [Filed March 21st, 1903.]
    1. By force of article 4, section' 7, paragraph 6 of the state constitution, coupled with an act (P. L. of 1894 p. 123), lands under tide-water belonging to the State of New Jersey are irrevocably devoted to the support of free schools.
    2. The provisions of an act (P. L. of 1901 p. 374) which confers power upon the board of riparian commissioners to make a grant of such lands to certain cities for a nominal consideration is unconstitutional; and a grant made to Atlantic City under color of this provision is void. •
    On bill to quiet title.

      Mr. George A. Bourgeois, for the complainants.

      Mr. Henry Wootton, for the defendant.
   Reed, Y. C.

On October 10th, 1901, the board of riparian commissioners made a grant to the complainants of certain lands under water in front of riparian lands of which the complainants were then owners. On the same day the same board made a grant of a larger tract, including the tract granted to the complainants, to the city of Atlantic City. Preceding the time these grants were made, a contest existed respecting the right of these respective grantees to receive a grant of the property included in the grant to the complainants. The complainants claimed the right as owners of the ripa, and the defendants claimed their right under the provision of an act passed by the legislature and approved March 22d, 1901. P. L. of 1901 p. 374.

The grant to the complainant.was made subject to the right, title and interest acquired by Atlantic City under the grant of the above date.

The grant to Atlantic City contains the proviso that if the act of 1901 should be at any time hereafter decided unconstitutional by a court of competent jurisdiction, and no appeal from such decision (if any appeal lies therefrom) is taken within one year from the date the same is made, then and in that event this instrument and conveyance, so far as the same binds the state, and all the conveyances herein on the part of the state, shall be void.

This suit is brought by the complainants to quiet the claims of Atlantic City under the grant to it just mentioned. The condition of affairs respecting possession of the property seems to put the complainants in a posture to -bring this suit. Indeed it is admitted that the complainants are in peaceable possession.

The -insistence of the complainants, as is perceived, is that Atlantic City cannot assert any right by virtue of the riparian grant to it, and therefore the grant to the complainants is exclusively operative.

The uncon-stitutionality of the act of 1901 is grounded upon the insistence that lands under tide-water, belonging to the State of New Jersey, are irrevocably devoted to the support of free public schools, and that the act of 1901 devotes a portion of such lands to other purposes. The premises upon which this argument rests is based upon article 4, section 7, paragraph. 6 of the constitution of New Jersey, coupled with an act passed in 1894. P. L. of 1894 p. 123. It is insisted that these constitutional and legislative laws have put it beyond the ability of the legislature to devote any of the lands under tide-water to any purpose other than the support of free schools in this state.

The language of the constitutional provision is this:

“The fund for the support of free schools, and all money, stock and other property which may hereafter be appropriated for that purpose or received into the treasury under the provision of any law heretofore passed to augment the said fund shall be securely invested and remain a perpetual fiind; and the income thereof, except so much as it may be judged expedient to apply to an increase of the capital, shall be annually appropriated to the support of public schools for the equal benefit of all the people of the state; and it shall not be competent for the legislature to borrow, appropriate or use the said fund or any part thereof for any other purpose under any pretence whatever.”

The act of 1894 is entitled “A supplement to- an act to establish a system of public instruction. The language of this supplement of 1894 is

“That all the lands under water belonging to this state be and the same hereby are irrevocably appropriated for the support of free schools in this state, and that all moneys hereafter received from the sales and rentals of such lands under water belonging to this state shall be paid over to the trustees of the school fund and appropriated for the support of free public schools, and shall be held by-them in trust for that purpose and shall be invested by the treasurer of the state, under their direction, in the same manner as the funds now held by them are invested, the same to constitute a part of the permanent school fund of the state, and the interest thereof to be applied to the support of public schools in the mode which now is, or may hereafter be, directed by law, and to no other purpose whatever.” ,

Assuming that by force of this act the lands under water belonging to- this state were appropriated to the support of free schools, the question is whether the act of 1901 infringes the constitutional provision.

The act of 1901 is entitled “A further supplement to ‘An act to ascertain -the rights of the state and its riparian owners in the lands lying under the waters of -the bay of New York and elsewhere in the state/ ” The first clause of this act provides that

“Whenever any public park has been, or shall hereafter be, laid out or provided for by ordinance of any city or other municipality, under the authority of any act of legislature of this state, along or fronting upon any of the tide-waters of this state, and whenever any streets or highways shall extend to said tide-waters, such municipality may apply through its legislative body to the commissioners appointed under the act to which this is a further supplement for a grant or conveyance to such city or municipality of the lands under water within, the. limits of said public park and of the land in front of said streets or highways; such grant to contain a provision that any land under water granted or. conveyed for park uses shall be kept and maintained as an open, public park or place for public resort and recreation, and that no building or other structures shall be erected on such park or on the lands under water so granted and conveyed inconsistent with, its use as a public park or place for public resort and recreation; provided, however, that public walks and drives may be constructed along or upon any portion of the land so granted or conveyed,”

The second section provides that

“The commissioners may make all such grants or conveyances applied for as aforesaid for the lands under water owned by the state, extending from the inland limits- of such park to the exterior line established or to be hereafter established by the said commissioners, and for all land under water within the lines of the streets or highways, and in front of the ends of such- streets or highways, and extending from the high-water lines to said exterior line, and may, in their discretion, charge therefor a nominal consideration only; and said grant or conveyance shall also contain a provision that if at any time after the grant or conveyance aforesaid has been made such public park or highway shall cease to be used as such park or place for public resort and recreation, or as such street or highway, the lands under water granted as aforesaid in front thereof shall at once revert to the state.”

Section 3 provides that

“No conveyance shall hereafter be made by the said commissioners, except to the municipality aforesaid, of any land under water within the limits of such park, or within the lines or at the end of any such public street or highway.”

In my judgment the only ground for attack upon this act is to be found in that part of section 2 which provides that the commissioners may, in their discretion, charge therefor a nominal consideration only. It is quite clear that the grant provided for under the act of 1901 is for a public purpose. It is equally clear that apart from the act of 1894 the legislature could devote the property of the state to any public- purpose. It seems also manifest that the appropriation of these lands as property under the constitutional provision had in view the conversion of this property into money which was to be securely invested. There was left in the state, therefore, the discretion when and how to transmute this property into money and to make all reasonable regulations for the use of the property until it was sold. It could probably grant a perpetual right to lay out its streets or highways through it, regarding the presence of such streets as likely to enhance the value of this property. So, too; perhaps, a privilege could be granted to a municipality to use it as a park until such times as the state thought it to the benefit of the school fund to transmute the land into money by sale or lease. So, too, I think, the state had a right to provide that under the conditions mentioned in the act of 1901 a sale should be made exclusively to a municipality having control of a public park.

The question, however, is whether it could make a perpetual gift of these lands to anyone, for this, it cannot be doubted, is intended by the language of the legislative act. The grant is .for an easement which is practically perpetual and exclusive. There remains nothing of the least value to the state. The grant is intended to be gratuitous.

While it is true that a, board may charge the same rate for a grant to a municipal corporation for a public park as to any other grantee; nevertheless the purpose for which the discretionary power was conferred upon the riparian board is manifest, and that purpose was executed in making this grant.

For the extensive grant made to Atlantic City the consideration is $1, and for the restricted grant made to the complainants the consideration is $990.

The grant to Atlantic City would have been null if the same consideration had been charged for it as for other grants to riparian owners; for the power to charge nothing taints the statutory clause and entirely destroys its force as an authority to make any grants.

In the language of Judge Earl in Stuart v. Palmer, 74 N. Y. 183, “the constitutional validity of a law is to be tested, not by what has been done under it, but by what, by its authority, may be done.”

I am constrained to the conclusion that Atlantic City has no claim to the locus in quo under its grant.


text:
    The Mercer County Traction Company v. The United New Jersey Railroad and Canal Company.
    [Filed April 16th, 1903.]
    1. When proceedings are taken by a trolley company, under section 32 of the laws of 1903, to have its mode of crossing a railroad defined, the railroad company may challenge the right of the trolley company to lay its tracks at the place of crossing; and where it is incorporated as an extension of another road, its legality is dependent upon the legal existence of the older trolley road.
    2. By act of 1896 (P. L. of 1896 p. 329) no trolley can be laid upon any highway in. a township without the consent of the township committee, and such consent cannot be granted until there shall have been filed with the township clerk the consent, in writing, of the owners of at least one-half in amount, in lineal feet, of property fronting on the highway, which consents shall be executed and acknowledged as are deeds entitled to be recorded.—Held, that consents not sealed were insufficient to confer power upon the committee to grant the statutory permission. - j
    3. Where an ordinance purporting to give such consent was., upon certiorari prosecuted by the railroad company, held to be valid, but the reasons which were assigned for its vacation an'd which were passed upon by the court did not include the want of sealed consents by abutters— Held, that the railroad company is not estopped in this proceeding from attacking the ordinance upon this ground.

      Mr. John II. Baches, for .the petitioner.

      Mr. Alan II. Strong, for the defendant.
   Reed, Y. C.

This is a petition filed by the Mercer County Traction Company for the purpose of having this court fix a method by which its road shall cross the road of the Pennsylvania Railroad Company at Yardville. The present road was organized as an extension of another road, also known as the Mercer County Traction Company, running from Allentown to Yardville. The present ■road starts from the terminus of the former road and runs one thousand four hundred and sixty-two feet northerly. The United Yew Jersey Railroad and Canal Company, lessors, and the Pennsylvania. Railroad Company, lessees, of the road to be crossed, challenge the power of this court to act upon the petition. The objection to the jurisdiction of the court is put upon the ground that the conditions essential to equip the petitioner with a legal existence have not been performed.

The incorporation of the petitioner seems to have been under section 6 of the act of 1893, which provides for the extension of an existing railway. The first objection is that the railroad of which the petitioner pretends to be an extension, namely, the road of the original Mercer County Traction Company, itself had no legal existence. The evidence offered by the petitioner, in respect to the organization of that road, is a certificate of incorporation, dated January 19th,. 1899, recorded in the office of the clerk of Mercer county July 31st, 1899, and filed in the office of the secretary of state on the same day; also a location of the route of the road and a map, filed December 7th, 1899; also an ordinance of the township committee of the township of Hamilton granting permission to the said company to lay its road along.the highway indicated in the description and shown on the map of its route, an acceptance by the company and the officers of the company, filed January 23d, 1900, and also the written consents of certain owners of land abutting on the highway.

The evidence offered in respect to the organization of the road of the petitioner is a description of the road, with a map attached, filed in the secretary of state’s office on August 23d, 1901; an ordinance of the township committee of the township of Hamilton granting permission to use the highway; acceptances by the company and the officers of the company of the ordinance, filed in the office of the secretary of state’ October 9th, 1901, and consents of abutting owners along the highway.

It is insisted that the existence of the original road is not proved, because the consent by the township to the laying of the original road was invalid, in that there was not filed with the township clerk the consent in writing of the owner or owners of at least one-half in amount, in lineal feet, of the property fronting on the street or highway upon which the road was to run.

The act controlling this matter is to be found in P. L. of 1896 p. 329. This act provides that no street railroad shall be constructed upon any street or highway except upon the consent of the governing body of such municipality, town, township, village or borough., The act contains a proviso, as follows:

“That such permission to construct, maintain and operate a street railway shall in no case be granted in whole or in part until there shall be filed with the clerk of such governing body, or other equivalent officer, the consent, in writing, of the owner or owners of at least one-half in amount, in lineal feet, of property fronting on the streets, highways, avenues .and other public places, or upon the part of the street or streets, highway or highways, avenue or avenues and other public place or places, through or upon which permission to construct, operate and maintain a street railway is asked, and any such consent may be signed by an attorney in fact thereunto duly authorized by any owner, or by an executor or trustee holding the legal title or having power of sale, which consent shall be executed and acknowledged as are deeds entitled to be recorded.”

It is first objected that.it does not appear that those purporting to give their consents, filed in the township clerk’s office, owned the requisite number of feet required by the statute; and it is objected, secondly, that the consents are not executed in accordance with the statutory requirements'—the statute requiring that the consents shall be executed and acknowledged “as are deeds entitled to be recorded.”

In respect to the absence of proof that those who signed the consents owned the requisite number of lineal feet, nothing appears but the statement in the written consents of the number of feet owned by each consenting owner. As the filing of the requisite consent was a condition precedent to the power of the township committee to pass the ordinance, I think that the fact of the passage of the ordinance should be regarded as evidence that the committee found that the consents filed were, in this respect, in accordance with the statute. The committee could resort to whatever evidence it wished to satisfy itself of that fact. It is true that the proceedings were of a statutory body with a limited power, yet so long as nothing appears in the record of their proceedings to exhibit an absence of power to act, and inasmuch as the statute requires no record of the decision of the committee in respect to the fact that the owners of the required feet had consented, it may be assumed, until the contrary is shown, that this fact was satisfactorily proven to exist.

The remaining objection, however, is based upon what appears in evidence, viz., that the consents which were filed were neither sealed nor acknowledged as sealed instruments. The statute requires that the consents shall be, not merely acknowledged, but shall be executed “as are deeds entitled to1 be recorded.” The word “consent” includes those made by the owner himself, as well as those made by his attorney in fact, or by an executor or trustee holding the legal title or having a power to sell abutting lands. How, it is common learning that one of the requisites of a deed is a seal. The grant of an easement requires a seal. It is, of course, true that equity can treat an unsealed instrument, purporting to be a deed or. grant, as an agreement creating an equitable interest in, or a lien upon, the land which is the subject-matter dealt with by the imperfect instrument. That rule, however, is inapplicable in this proceeding; for while the method of crossing is put by the legislature under the supervision of a court of equity, yet one. of the statutory conditions upon which the right of the trolley road to cross is that the petitioning road has not merely the consent of a certain proportion of abutting owners, but that the consents shall be evidenced in a form fixed by the statute. To make these consents provable the statute requires that they shall be executed and acknowledged as deeds. These were not. And so the filed consents were not provable as such; and, at the time of the passing of the ordinance granting permission to the original traction company, the condition was as if no legal consents had been filed with the clerk. It follows that it is not proved that a legal road existed, of which the present road is an extension.

Again, the same objection in respect to the legality of the consents is raised in regard to the validity of the petitioning road. The consents of the abutting owners last mentioned are on one paper having seals attached to the names of the landowners, but the certificate of acknowledgment, with one exception, states merely that the grantors signed and delivered the same as their voluntary act and deed. Had the certificates stated that the owner “acknowledged that they executed the instrument as their voluntary act and deed,” the acknowledgment would have been good, although sealing was unmentioned. Sharp v. Hamilton, 7 Halst. 109. 1 think that these acknowledgments are sufficient. The signers acknowledge that they signed the consents and delivered them as their voluntary act and deed. A deed imports a sealing, and these consents were actually sealed.

It is also objected that consents should have been filed with the county clerk as a condition precedent to the granting bjr the board of chosen freeholders of Mercer county permission to place this road upon a macadamized county road. The act of 1894 provided that no street railroad shall be constructed upon a street or highway in a municipality, town, township, village or borough except upon the consent of the governing body of such municipality. It provides that such consents shall not be granted by the governing body of any sxich municipality, &e., until consents by a certain proportion of lineal feet owned b3r abutters upon the road shall have been filed in the office of the clerk of the municipality, &c.

The act of 1896 (P. L. of 1896 p. 329) clearly supersedes the act of 1894, as it covers all its provisions respecting consents. This act provides that no street railroad shall be constructed upon any street or highway in any city, town, township, village or borough except upon the consent of the governing body of such municipality, town, township, village or borough. The act then provides for the consent of the abutting owners, in the manner already exhibited.

It is perceived that the word “city” is substituted in the act of 1896 for the word “municipality” in the act of 1894, and when the word “municipality” is afterwards used, followed by the other specified instances, the word undoubtedly refers to cities. It is the governing body of such cities, towns, townships, villages and boroughs with which all consents to the required permission shall have been filed. All this is to be found in the first section of the act of 1896, The second section of the act deals with the manner of obtaining permission to change the motive power used by a street railroad. Then follows a proviso that if any board, body or public authority, other than the governing body of such municipality, town, township, village or borough, shall have control of any of the streets or highways over which the proposed street railroad is to be constructed, &c., the consent of such board, body or public authority shall also be required. Then follows a provision requiring that such consent shall be granted only upon notice, to be given in the same manner as provided for in respect to notices to be given upon application for the consent of municipalities. It is under this provision that the application was made to the board of chosen freeholders, as the board having control of the road over which this proposed trolley is to be constructed.

It seems entirely clear that the consent of the abutters is required to be- only once given, namely, before the municipal authorities, mentioned in the first section of the act of 1896, grants its permission. The provision for the consent of the abutting owners is referable to the action of the governing body of cities, towns, townships, villages and boroughs. The only condition attached to the granting of the latter permission is that notice shall have been given in the same manner as provided for in the first section.

While expressly providing for the same notices, it is entirely silent as to any consent of abutting owners in the manner required in the first section. The express requirements of notice, coupled with silence in regard to consent, excludes the idea of an absurd requirement that two consents of the same abutting owners shall be executed and filed before a valid grant of permission can be given by the county.

It is again objected that there is, no compliance with the statutory requirement that, before the beginning or construction of any extension or new trolley line, the corporation shall file in the office of the secretary of state a description of the route of such extension or new line, showing the termini, together with a map exhibiting the same, with the courses and distances thereof. Upon the map filed by the present petitioner is marked a distance from a southerly terminus running northerly one thousand four hundred and sixty-two feet, more or less. The description filed omits the words “more or less,” and described the southerly terminus at a point in the road known as Crosswicks and Trenton turnpike, where the road leading from Groveville to Hamilton Square intersects the same, and runs thence a certain course of one thousand four hundred and sixty-two feet to a point in said highway, which point is the northerly terminus. I think the words “more or less” upon the map may be rejected as surplus-age. They have no significance whatever when the distance is the only indication of the point where the road stops. I think a point one thousand four hundred and sixty-two feet from the southerly terminus is the northerly terminus of the present road, and sufficiently appears, both in the written description and upon the map.

These conclusions still leave wanting the provable consents by the abutting owners to' the laying of the road, of - which this is an extension.

There is, however, offered in evidence the record of a proceeding upon certiorari, in which the Pennsylvania Railroad Company was prosecutor and the petitioner was a defendant. The writ seems to have brought up the ordinance passed by the township committee of Hamilton township' giving the petitioner permission to lay its road upon the highway within the township. This ordinance was adjudged by the supreme court and the court of errors, upon a writ of error, to' be a valid ordinance.

This judgment would conclude the two parties mentioned in any proceeding brought directly to test the validity of that ordinance. The doctrine of res judicata, however, differs when applied to a new proceeding for the same, or part of the same, cause of action, and when applied to a different cause of action. In the former instance, everything that could have made for the plaintiff or for the defendant is settled by the first judgment. In the latter instance, only those issues actually presented and decided are concluded. City of Paterson v. Baker, 6 Dick. Ch. Rep. 50; Clark Thread Co. v. William Clark Co., 10 Dick. Ch. Rep. 658, 662. The present proceeding must be regarded, not as a direct attempt to> litigate the’ validity of the ordinance, but as a new proceeding, in which the validity of the ordinance and the existence of certain conditions essential to the validity of the ordinance comes into question. Therefore the only point upon which the Pennsylvania Railroad Company is estopped are those actually litigated in the certiorari proceedings. The issue actually tried in that proceeding was whether the ordinance was good as against the reasons filed for its vacation.

In North River Meadow Co. v. Shrewsbury Church, 2 Zab. 424, an action of debt was brought to collect an assessment imposed upon lands belonging to the church. The meadow company, in support of the assessment, put in evidence the record of a proceeding in certiorari, prosecuted by the church, to test the legality of the assessment. In this proceeding the assessment had been held to be legal. The supreme court held that, in the subsequent action to collect the assessment, the church was estopped from asserting that the assessment was invalid. It was so held upon the ground that the reasons assigned by the church for vacating the assessment in the certiorari proceeding embraced all the points suggested on the trial of the later action. It is true that, in the certiorari proceedings brought to test the ordinance in this case, general, as well as special, reasons were assigned for its vacation; but the court was not obliged and, under its practice, would not notice the former, and, in fact, did not do so.

Inasmuch as the want of filed consents by the abutting owners was not assigned as grounds of objection to the ordinance, the Pennsylvania Railroad Company is not estopped from now setting up this objection.

This renders it unnecessary to consider the question what the posture of affairs would have been had the Pennsylvania Railroad Company been estopped, in view of the fact that the United Eew Jersey Railroad and Canal Company, Which was not a party to the certiorari proceedings, is a respondent in this cause. Unless, by its lease to the Pennsylvania Railroad Company, it stripped itself of all substantial interest in the road, and passed the same to the Pennsylvania Railroad Company, it, not being estopped by the certiorari proceedings, would occupy a position to insist upon all the objections raised.

I am therefore constrained to the conclusion that, by reason of the want of provable filed consents of the abutting owners along the road of which the petitioner’s road is an extension, the petitioner 'has no standing to ask for the order now sought'.


author: Stevens, Y. C.

text:
    Charles R. Oliver v. The Rahway Ice Company et al.
    [Filed February 26th, 1903.]
    1. A contract of sale to a corporation of shares of its stock by a director present at the meeting of the board at which the sale was sanctioned is not binding as a valid obligation. But if the stock be retained or its value changed by action of the company so that it cannot be tendered back, though in the same condition, the company will be obliged to pay what it was reasonably worth.
    2. A board of directors, the majority of which were the members of the board which authorized the illegal contract, cannot ratify it.
    3. Silence of the stockholders of a corporation for two years, with knowledge of the illegal contract, is not a ratification thereof.

      Mr. Nicholas G. J. English, for tlie complainant.

      Mr. Frank Bergen, for the defendants.
   Stevens, Y. C.

The bill is. filed to foreclose a mortgage made on August 31st, A. D. 1899, by the Rahway Ice Company to. complainant to secure the sum of $13,000. One j^ear thereafter the mortgagor paid the principal sum of $3,000, with a year’s interest. The complainant, Oliver, and his brother had been stockholders of the company, together holding three hundred shares of the par value of $100 each. On these shares $15,000 had been paid into the treasury of the company, and on the day above named the company had agreed to take them for what had been thus paid. Of this price $3,000 was paid in cash and the balance was secured by the above-mentioned mortgage. The main defence was that the transaction was ultra vires and void. Since the decision by the supreme court in Chapman v. Ironclad Rheostat Co., 33 Vr. 497, approved by the court of errors and appeals in Berger v. United States Steel Corporation, N. J. L. J. 331 (1902), it is the settled law of this state that corporations may purchase shares of their own capital stock whenever such purchase is required for legitimate corporate purposes. JÍ do not suppose that1 this decision goes the length of authorizing a corporation to purchase and pay for its own stock if such purchase and payment will disable it from paying its debt in full, or of authorizing a. corporation to contract with one or more of its shareholders to buy shares and so convert them into creditors entitled to come in on an equality with other creditors, if the assets be at the time insufficient to pay all the creditors in full. But the evidence does not bring the case in hand under either of these categories, and so nothing is decided in reference to them. Under the proofs, the transaction is not, therefore, ultra vires. It seems to me, however, to be objectionable on another ground. It comes within the principle of Gardner v. Butler, 3 Stew. Eq. 702. Oliver and his brother were directors present at the meeting of the board at which the sale of the stock was sanctioned. Speaking of a case thus circumstanced, Mr. Justice Yan Syckel, in the case cited, says: “The rule is that the trustee cannot fortify himself by a contract which he makes with himself or for his own benefit and set it up either at law or in equity as a valid obligation. It is of no binding force as a contract, and the cestui que trust may repudiate it at will. But while the express undertaking is without legal force, the directors of a company have a right to serve it in the capacity of officers, agents or employes, and for such services the law will enable them to recover a just and reasonable compensation. * * * No claim which they may make against their company can acquire any support from the fact that they have expressly sanctioned it. It must rest exclusively upon its fairness and justice and be enforced upon the quantum meruit.” Referring to the case of the Aberdeen Railway Co. v. Blaikie, he says, further on: “If the action (in that case) had been brought to recover for the chairs which, had been delivered and accepted, I apprehend it would not have been held in any court that the company could have retained the property and refused to pay for it, not the contract price, but what it was reasonably worth. * * * The same principle must apply whether it is property conveyed or services rendered to the company. The cupidity and avarice of the trustee is guarded against by giving the cestui que trust the right to repudiate the contract at all times, where it is executory, and to allow simply a just remuneration without reference to the contract price, where it is executed.” In the Berger Case, stock is said to have been put by our statute upon the footing of other property, and so the rule laid down in the case of Gardner v. Butler is directly applicable. The company must pay for it, not the contract price, but what, at the time of the sale, it was reasonably worth.

It was argued for complainant that there was ratification of the contract as made, first, by payment on account, and secondly, by an express reference to the mortgage as “due”'in a subsequent mortgage made by the company to a trustee to secure certain bonds.

The payment on account may as well be referred to an implied indebtedness on the quantum valebat as to an express indebtedness on the contract. As to the clause in the second mortgage, the evidence does not show by whose direction it was inserted, and it appears to be rather the statement of a seeming fact than the conscious validation of an illegal agreement. If it was inserted by direction of the board of directors, then, so far as appears, a majority of tire board which directed it may have consisted of the same persons who authorized the purchase. That majority could not, consciously or unconsciously, ratify its own illegal act. The ratification must necessarily come from the principal, and not from the unauthorized agent. Here the principal is the corporation itself—the whole body of the stockholders. It is not pretended that this body as such, or duly authorized representatives of this body, ratified the transaction otherwise than by its silence; and this silence has not been sufficiently long continued to be evidence of acquiescence, and hence of ratification, assuming, notwithstanding the language of the court in the Gardner-Butler Case, that the ordinary rule relating to ratification by acquiescence is applicable to cases like the present. Only two years and a little over a month intervened between the mailing of the mortgage and the bringing of this suit. In tire Gardner-Butler Case the stockholders, with full knowledge of the facts (see chancellor’s opinion, 3 Stew Eq. 710), remained silent from January, 1868, to May, 1871, and although the chancellor called attention to' the delay and laid stress upon it, it was not considered by the court of errors to be material.

There must be a reference to ascertain the value of the stock at the time it was purchased. I do not think the company could with any more reason tender it back now, with another mortgage put upon the property, than the Aberdeen company, in the case mentioned by Mr. Justice Yan Syekel, could have tendered back the chairs after using them.


author: Stevens, V. C.

text:
    Henry Puster, receiver, v. Parker Mercantile Company.
    [Filed March 10th, 1903.]
    A subpoena to answer was served upon, the vice-president of the defendant company while casually in the state on. private business.—Held, that such service would not be set aside on motion.

      Mr. Robert M. Boyd, Jr., for the applicant.

      Mr. Robert S. Hudspeth, for the receiver.
   Stevens, V. C.

This is a motion to set aside service of a subpoena, on the ground that defendant is a foreign corporation, not subject to the jurisdiction of this court.

The practice here adopted is that Which prevails in the courts of the United States. Goldey v. Morning News, 156 U. S. 518. It does not appear to have the sanction of the courts of this state. In Kirkpatrick v. Post, 8 Dick. Ch. Rep. 592, motion was made to set aside an order of publication as against two absent defendants, who were non-residents. The motion was denied, both in the court of chancery and on appeal (8 Dick. Ch. Rep. 641), on the ground that, being a mere notice' to the defendants of the pending litigation, and thus affording them an opportunity of coming in and taking part in it, if they saw fit, it could not be the subject of complaint, as it could do' them no harm. In that case there had been an order of publication. A notice of this order had not only been sent through the mail, but had actually been received. In the case in hand,- the subpoena was served upon the vice-president of the corporation while casually in the state on private business. The situation in both cases is substantially the same. If in the one case the service could do no harm, neither could it in the other. It gave, in both, actual notice of the pendency of the suit and an opportunity to come in and defend on the merits, 'at the option of the person sued. In neither case, to use the language of the chief-justice in the case cited, is it to be assumed that the court of chancery would pronounce a decree founded on process of this character that would be illegal and contrary t,o the federal constitution. If the fact be truly set out in defendant’s affidavits, it was not, at the time of attempted service, within the state for any purpose whatever, and consequently no better served and more subject to the juris.diction of this court than was the defendant Post in the case cited. As a matter of practice, it seems to me that it would be most illogical to hold that in the case of publication, followed by service out of the state, the motion to vacate should, on the ground stated, be denied, while in the case of service within the state, equally ineffective of itself to bring the defendant within the jurisdiction, the motion to. set aside the service should be allowed.

The case principally relied on was the case of Camden Rolling Mills Co. v. Swede Iron Co., 3 Vr. 16, but that case came up on demurrer to a plea to the jurisdiction, the plea being sustained. The case is an authority for the position that if defendant pleads and proves the facts set up in his affidavits, the court will dismiss the bill for want of jurisdiction to adjudge the merits. It is not an authority for the propriety of this method of procedure. In Moulin v. Insurance Co., 4 Zab. 234; S. C., 1 Dutch. 57, there was also a plea to the jurisdiction.

I do not think that the service has been proved to be fraudulent.

The application should be denied.


text:
    Abram Speer v. The Erie Railroad Company.
    [Filed March 26th, 1903.]
    S. conveyed to a railroad company a strip of land running through his farm. In the deed the company stipulated as follows: “The said party of the second part doth for itself and its successors agree to make and maintain the necessary fences on both sides of said tract of land, which shall be built before the work of grading on said track is commenced, and shall provide the party of the first part with a suitable and convenient road crossing across the track of said railway where the party of the first part may direct.” A crossing at grade was provided in the manner stipnlated. The successor of the company subsequently raised the tracks and constructed an embankment fifteen and one-half feet high without bridging the crossing and thus wholly destroyed it.—-Held, (1) that the above-quoted stipulation enured to the benefit of the heirs of the grantor; (2) that the way having been once located could only be changed by mutual consent and that the company must construct and maintain the crossing at the original level; (3) that complainant has not been, guilty of laches in applying for relief (New York City v. Pine, 185 U. S. 93, distinguished) ; (4) the right of crossing given or reserved by the deed is an unlimited right enuring to the benefit of any grantee of the whole or any part of the land retained.

      Mr. Ilalsey M. Barreil, for the complainant.

      Mr. Ghauncey G. Parker, Mr. Corllandi Parker, Jr., and Mr. Cortlandt Parker, for the defendant.
   Stevens, Y. C.

The bill is filed to compel the defendant company to restore a farm crossing over its tracks in Upper Montclair. By deed dated June 20th, 1870, John A. Speer conveyed in fee to the predecessor of the defendant company, for the consideration of $487.50, a strip of land one hundred feet in width running through the middle of his farm. The farm contained about forty acres. In this deed the grantee company stipulated as follows:

“The said party of the second part doth for itself and its successors agree to make and maintain the necessary fences on both sides of said tract of land, which shall be built before the work of grading on said track is commenced, and shall provide the party of the first part with a suitable and convenient road. crossing across the track of said railway where the party of the first part may direct.”

In conformity with this stipulation the grantee directed that the crossing should be where an old road ran through the middle of the farm. To this direction the company assented and provided a crossing accordingly. Its single track ran through the farm, nearly at grade, the rails being laid about eighteen inches above the natural surface. On both sides of the track planking was laid and the crossing so constructed that the grantor could cross with his farm wagons, horses and cattle. The way was used by the grantor, and, after his death, by the complainant, his sole heir-at-law, up to- the month of April, 1900. During the latter part of this period, however, the complainant seems to have utilized it only as a driveway for cows, so much of the farm as lay west of the track having been devoted to pasturage.

In the year 1897 the company constructed an additional track, and in April, 1900, raised both tracks so as to run over the valley road at an elevation of thirteen feet (clear head room), pursuant to a decree of this court regulating the use of that highway as between the North Jersey Street Railway Company and the defendant company. In thus raising them the latter company was obliged to raise them at the farm crossing, and it constructed across complainant’s land a solid earthen embankment about fifteen and a half feet high. It did not bridge the crossing, but completely destroyed it. Complainant can only now go from the easterly to the westerly part of his farm by making a considerable circuit 6n land not his own.

Just before, or very shortly after, the work of grading had begun the complainant notified the agents of the company of his right. The notice of claim is dated March 23d, 1900. The company’s first reply is dated March 29th, 1900. Mr. Moore, the company’s engineer, says the work of elevating began about the 1st of April of that year. The company, notwithstanding the notice, went on and constructed the embankment across the way.

The stipulation in the deed is only that the company and its successors shall provide the party of the first pari with a suitable and convenient road crossing. It does not, in terms, extend to his heirs and assigns, but it has been settled that these terms are not, in a ease like the present, necessary to- attach the covenant perpetually to the land.. In Pipe Line Co. v. Delaware, Lackawanna and Western Railroad Co., 33 Vr. 254, 247, the stipulation was that the company should erect and forever maintain under the rails of its railroad a suitable wagon road or crossing, &c. Mr. Justice Depue, speaking for the court of errors, said: “The grant, in terms, is to Stewart, without the word ‘heirs’ or words of perpetuity. Such a grant at common law would create only a personal right for the life of Stewart. Where the right is granted in a deed, in the nature of a reservation, and it is manifest from all the recitals in the deed on the subject that the plain purpose of the piarties was to create a right for the benefit of the part of the whole tract which had been severed by the conveyance, the grant will be construed as creating an easement appurtenant to the premises, and will pass as such without the word ‘heirs/ at least in equity.” The covenant in the case in hand does not differ essentially from that which was the subject of consideration in the Pipe Line Case, so far as it is in the nature of a reservation. Here, as there, the plain purpose was to create, or rather to preserve and perpetuate, a right for the benefit of the severed parts of the whole tract. It therefore follows that the complainant, who is the sole heir of the grantor of the land, is entitled to the benefit of it.

In view of the decision in .the Pipe Line Case, the company does not seriously contest its liability in some form. It says that it is willing to give a crossing in one of three ways—(1) it will undertake to give an outlet to the valley road over a right of way to be acquired by it; this will compel the defendant to make a circuit, off his own land, in order to go from his house and bam and from the valley road to his land west of the raised tracks; (2) it will provide approaches on its own land, parallel to its tracks, which will carry the crossing over the road at grade; or (3) it will construct approaches on the complainant’s land so as to carry the crossing over the road at right angles to the direction of the tracks. The company suggests, further, that in case the court shall be of opinion that the complainant is not obliged ho accept either of these three modes of crossing, then it shall itself ascertain the damages which the complainant will suffer from the severance1 and compel him to accept them, in lieu of the specific relief which he asks.

The complainant refuses to accept any of these propositions, and insists upon his right to a crossing at the level at which it existed for the thirty years prior to the raising of the tracks. In reply to this insistment, the company says that such a crossing would cost over $5,000, while any of the other modes of crossing would not cost more than $500 or $600.

It would seem, at first blush, as if a crossing such as the company offers would answer complainant’s requirements, and that the rule should be applied that if subsequent events have made literal performance by defendant so onerous that it would impose great hardship upon the company, and be productive of little or no benefit to complainant, then it will not be decreed. Trustees of Columbia College v. Thacher, 87 N. Y. 311. But a little consideration will show, I think, that this case does not fall within the reason of the rule. In the first place, if the company will' now bo obliged to spend $5,000 upon what I shall call a tunnel crossing, it is only because, in the face of not only constructive, but actual, notice of complainant’s rights, it chose to go on and disregard them. The company’s engineers do not tell us what such a crossing would have cost had it been made while the work was progressing. It is obvious that it would have cost very much less than it will now. The company was under no- compulsion to .construct the embankment as it has constructed it. If the company deliberately disregarded complainant’s right, it should not be permitted to stand in any more favorable position for having done so. In the second place, the evidence shows very clearly that the right, as it has heretofore been enjoyed, is gradually becoming more valuable. There is evidence on both sides that the land in the vicinity is coming into the market for' residence purposes, and that it now possesses a value much above its value as farm land. An outlet to the valley road, such as the tunnel crossing would afford, would give added value to- the complainant’s land west of the embankment.

If, then, the complainant has a legal right to a tunnel crossing, there is nothing in the present situation, created by the defendant itself, after full notice, that would warrant the application of the above rule. I will first consider the nature and extent of the right, and then whether equity should deprive him of it in the form in which it was given.

The covenant is that the predecessor of the defendant company will “provide the party of the first part with a suitable and convenient road crossing across the track of said railway.” This right is not, as it was in the Pipe Line Case (supra), limited “so as to enable said S. to travel and cross freely between his land on each side of said granted premises.” It is an unlimited right ■—a right of passage for all purposes—and the case in hand, as it seems to me, comes within the principle of the cases, cited with approval in the Pipe Line Case, which hold that a crossing has been given for all the purposes to which, at the time, or at any future time, the owner or any grantee of the whole or any part of his land may think fit to appropriate it. One of the passages quoted with approval in the Pipe Line Case is taken from a judgment of Lord-Justice Mellish in United Land Co. v. Great Eastern Railroad Co., L. R. 10 Ch. App. 587, and is as follovgs: “When a right of way is created by grant or act of parliament it must depend on the proper construction of the grant or act of parliament whether the right of way is to be used for- all purposes or for only limited purposes. No doubt there are authorities that, from the description of the land to which the right of way is annexed and of the purposes for which it is granted, the court may infer that the way was intended to. be limited to those purposes. But if there is no limit in the grant, the way may be used for all purposes.” See, also, Newcomen v. Coulson, 5 Ch. Div. 133. A glance at the. map makes it apparent that on a subdivision of the land into lots the tunnel crossing would be far preferable as a means of reaching either on foot or by vehicles what is the principal highway in that locality, viz., the valley road. Speer had, by the above-quoted reservation, the right to go from the westerly part of his farm to that road, and the above cases show that his grantees, however numerous, would have the same right.

This brings me to the question whether complainant has the right to the tunnel crossing which he now claims.

The deed provided that the crossing was to be “where the party of the first part may direct.” It is admitted that the direction was both given and complied with. That irrevocably fixed the place of crossing. The case is identical with that suggested by Chief-Justice Beasley in Morris and Essex Railroad Co. v. Central Railroad Co., 2 Vr. 209. He says: “If A grant to B a right of way over his farm, such way to be laid out by B, it could not be plausibly pretended that after such way had once been located and ascertained by B it could afterwards be relocated or altered or added to by him.” The precise location having been once for all settled, it is as binding upon the parties as if it had been fixed by an actual description in the deed itself. But it is obvious that if its location could not be changed laterally it could not be changed vertically. The vertical change here proposed would be much more inconvenient than any lateral change. The way, if changed vertically, would not be the way located and agreed upon by the parties. It has been suggested, however, that while a crossing with raised approaches would not be as convenient as the old dossing, a tunnel crossing would be more convenient, because the tracks not being crossed at grade, the element of danger would be eliminated; and that if complainant ought not to be compelled to accept an inferior crossing, he is not entitled to a better. But certainly this ought not to be urged as an argument why the company should not perform its contract. The crossing would only be better in the sense that it would be less dangerous. In all other respects it would be the same. It would hardly be permitted to defendant to say: “I ought not to be compelled to give you the very way which I have stipulated to give you, because I will now be obliged to so construct it as to obviate all danger of collision.”

It being clear that complainant has the legal right to the very crossing which his father designated and the company gave, the question then is Whether equity ought to compel him to take something else. T do not see any reason for compelling him to take a roundabout crossing off his own land, nor do I see any reason for compelling him to accept, as a substitute, a more dangerous and inconvenient one over the tracks of the company, whether that crossing be constructed on the company’s land, with approaches parallel to the tracks, a very awkward way of getting over them, or a crossing with 'approaches constructed on complainant’s land—land which he never gave for the purpose-—at right angles to these tracks; it being remembered that the only ground on which this is asked is that of expense; and the expense having been, to a considerable extent at least, incurred only as a result of the violation of complainant’s right after notice.

It is urged, however, that if complainant cannot be compelled to take a less advantageous mode of crossing, he should at least be compelled to take damages in lieu of performance. If complainant could condemn, there would be much force in the contention; for it has been repeatedly decided, both here and in the court of errors, with reference to analogous cases, that this court has power to award damages. But it is conceded by counsel on both sides that this right of way cannot be condemned. And the reason is obvious. The charter of the original company preserved the old road to the landowner (P. L. of 1867 c. 160 § 9), and the General Bailroad act, under which the present company is formed, requires that suitable wagon-ways shall be constructed over, under or across the railroad where it intersects any farm. Gen. Stat. p. 2661 § 84. The company could not condemn that which, in every condemnation proceeding, is expressly reserved or given to the owner.

If, then, the law gives the right to the crossing, and if the crossing has been actually located, constructed and maintained under an agreement or covenant which neither party may vary from without the consent of the other, it would seem plain that the court should enforce the agreement as it finds it, and not give something as a substitute, unless the company can show that, under the particular circumstances of the case, to enforce the legal right would be inequitable.

It is very clear that the mere expense will not, under the circumstances, give rise to an equity.

Long and undisturbed possession may create an equity, but here the possession was with the complainant, and not with the company.

Laches might, if present, give rise to an equity, but here there was diligence. It is indeed contended that complainant should have acted while the proceedings between the railroad and trolley companies were in progress. But how could he have acted ? Even if it were shown that complainant had other than constructive notice of these proceedings, he could hardly have anticipated that the company, without necessity, would obstruct his way with an embankment when they might have easily bridged.

There is only one other conceivable ground on which it can be claimed that complainant is estopped from claiming the very right which the law, and the contract, both, gave him, and that is the ground suggested by the case of New York City v. Pine, 185 U. S. 93. In that case it appears that the Bryam river flowed partly in the State of New York and partly in the State of Connecticut. It had two branches, the east branch being in Connecticut and the west branch being chiefly in New York. The city of Hew York was constructing a dam near the Connecticut line with the intention of appropriating the waters óf the west branch to increase its water-supply. The bill was filed by a riparian owner in Connecticut, lower down the stream, to enjoin the city from making this appropriation. The circuit court of appeáls affirmed the decree of the circuit court granting an injunction, but the supreme court reversed, and held that the complainant should have damages, and not an injunction, unless the damages were not paid.

It is, of course, apparent that the city of Hew York could not condemn land in Connecticut. The grounds upon which the supreme court refused to sanction the 'injunction, in the first instance, were these: That it was not a case between two individuals, one of whom asserted that his 'property rights were being infringed by the other; that it was rather a case between an individual having a right -that was of small value to him, and a public corporation which was undertaking to supply its citi-, zens with a necessary of life; that the city had been engaged in this work of public utility, to the knowledge of complainant, for two years prior to the commencement of his suit; that during all that time the plaintiffs and the city had been trying to agree upon the amount of compensation, thus showing, as Mr. Justice Brewer says, “that the plaintiffs were seeking compensation for the injuries they would sustain, and were not insisting upon their alleged right to an abandonment of the work,” and that had the injunction been continued a costly public work would have been rendered useless. In view of these facts Mr. Justice Brewer says: “If one aware of the situation believes he has certain legal rights and desires to insist upon them, he should do so promptly. If by his declarations or conduct he leads the other party to believe that he does not propose to rest upon such rights, but is willing to waive them for a just compensation, and the other party proceeds to great expense in the expectation that payment of a fair compensation will be accepted and the right waived, especially if it is in respect to a matter which will largely affect the public convenience and welfare, a court of equity may properly refuse to enforce those rights, and, in the absence of an agreement for compensation, compel him to sub•mit the determination of the amount thereof to an impartial tribunal.” Simmons v. Paterson, 15 Dick. Ch. Rep. 393, is, in our own state, decided upon the same principle.

The case in hand differs from the case cited in the very particulars which justified the court in giving compensation rather than an injunction. In the first place, no public interest is involved. It is perfectly immaterial to the public whether the defendant’s trains be carried over a bridge or arch twelve or thirteen feet wide or over an embankment. The plaintiff does not ask that the company be ejected from the lands or restrained from running its trains. In the second place, the lapse of time intervening is considerably less. The parties were in negotiation for a few months and not for two years; and the negotiations related not only to a money equivalent, but also to the alternative rights of way proposed and proposed only by the company. In the third place, the parties ap>pear from the start to have been hopelessly at variance because of the opposite views taken of the nature and value of complainant’s right, and Mr. Moshizker, the company’s agent in the matter, admits that Mr. Speer did not go so far as to agree to accept a money equivalent. It is not a fair inference from the evidence that complainant waived his right to an injunction. From the outset he insisted upon it. The situation was this: the company, in the face of notice, obstructed the crossing, and having obstructed it, began to propose substitutes for it. Unless it was improper for the complainant to have merely listened to these proposals he was not lacking in diligence. It would seem plain that he has done nothing which the company is in a position to insist upon as being a waiver of the right which the deed and long continued enjoyment under the deed give him.


text:
    John V. Ten Eyck et al. v. Edith Saville et al.
    [Filed April 18th, 1903.]
    1. Equity will not compel specific performance of a married woman’s agreement to convey land, if sucli agreement be not acknowledged, whether performance be sought against the married woman herself or against her grantee with notice.
    2. A married woman’s executed and acknowledged deed, while it remains undelivered in the hands of her attorney, is not an acknowledged agreement within the meaning of the act of 1898 respecting conveyances.
    3. An acknowledged, but undelivered deed, if it can be regarded in the light of a memorandum or note of a prior unacknowledged agreement, does not come within the provisions of section 39 of the above act.

      Mr.. George S. Siher and Mr. John W. Beekman, for the demurrants.

      Mr. Theodore Strong, for the complainants.
   Stevens, Y. C.

The defendants demur to complainants’ bill for specific performance of an agreement to convey land, on the ground that the agreement was made by a married woman and that it has not been acknowledged. I think the demurrers must be sustained.

In Corby v. Drew, 10 Dick. Ch. Rep. 387, I examined the law on the subject and came to.the conclusion that a married woman’s agreement, though concurred in by her husband, if unacknowledged, is not enforceable against her. Since that decision was made the Conveyance act has been revised (P. L. of 1898 p. 670), and sections 21 and 39 have been construed by Yice-Chancellor Pitney in Goldstein v. Curtis, 18 Dick. Ch. Rep. 454. He comes to the conclusion that, whatever may have been the law prior to the passage of the act of 1898 as to acknowledged agreements of married women, since that act went into effect such agreements are enforceable. I think that the language of those sections plainly requires this construction. Section 39 provides that agreements for sale made by married women, duly acknowledged, ““shall be good and effectual to convey or affect the lands * * * thereby intended to be conveyed or affectedVice-Chancellor Pitney says: ““Now, a familiar way to “affect’ the interest of a person in land is to' contract to convey it, and the only mode in which such a contract can be made “good and effectual’ is to compel its specific performance by a decree of this court.” This act was passed after Corby v. Drew had been decided, and presumably with knowledge of the decision. If there had been any intention to alter the law as there stated, the legislature would not, as it seems to me, have provided generally that no' estate or interest of a feme covert should pass by her deed without a previous acknowledgment made by her on a private examination, and then have further provided that every deed or instrument of the description set forth in section 21 (agreements for sale being one of those instruments) executed by her and so acknowledged and certified should be good and effectual to' convey- or affect lands. The carefully-guarded declaration that no interest of a feme covert should pass by deed unless acknowledged in a certain way, coupled with a declaration that certain instruments so- acknowledged should pass or affect her lands, indicates very clearly that it was the legislative intent that instruments not so acknowledged should not affect her lands.

This appears to be conceded in the briefs of counsel, and the case is put on another ground. ■ The bill, after alleging the making of the agreement, states that the married woman joined with her husband in causing a deed of conveyance to be prepared in the ordinary form of a warranty deed and that this deed was in due form acknowledged and sent to her attorney to be delivered, but that before delivery she and her husband joined in executing and delivering a conveyance to someone else. Counsel argues that this deed is to be regarded as a part of the agreement, and that consequently, it having been acknowledged, the statute is satisñed. Now, I cannot understand how an undelivered deed, made after the agreement was entered into, can be regarded as a part of that agreement. The agreement was complete in itself. It required and received the formal assent of both parties. It could only be modified or added to by some agreement having like assent. This it never received. It was indeed sent by the vendor to her own attorney, but he never delivered it and so it never acquired any binding force. Counsel cites many cases to1 show that an undelivered deed may operate as a sufficient memorandum within the statute of frauds. But this is beside the mark. The question is not whether the statute of frauds bars the right to relief, but whether the married woman’s agreement is so executed and acknowledged as to give a right to relief. The questions are not identical and they do not depend upon the same considerations. The statute of frauds does not require the agreement itself to be in writing, but only “some memorandum or note thereof.” If there be a written memorandum or note of the agreement, and this be signed by the party to be charged, the statute is satisfied. But the statute does not say that an acknowledged memorandum or note of the agreement shall be sufficient to “affect” the married woman’s interest in lands. At common law the wife could only pass her freehold estate by fine or common recovery. Since the year 1743 she has been permitted to convey by acknowledged deed. The act of 1898 for the first time, at least in terms, gives full effect to her agreement to convey, but only if that agreement be acknowledged. Counsel now desires the court to go a step further than the statute goes, and to say that a note or memorandum of the agreement shall affect her lands if only it be acknowledged. For this I can find no warrant. The cases relied on by counsel show very plainly that, under the statute of frauds, a note or memorandum of the agreement is a different thing from the agreement itself.' I am unable to agree, therefore, that the acknowledged, but undelivered, deed, looked upon as a note or memorandum of the terms of the agreement, makes up for its deficiencies. It must always be remembered, in. dealing with this subject, that, in the case of married women, the policy of our law has always been to make the acknowledgment of the essence of the transaction, and not merely the evidence or proof of it.

It appears by the bill that after Mrs. Saville and her husband had agreed to convey to the complainant, they conveyed to one Campbell, who, it is said, took with notice. It may be argued that having so taken, equity will compel him to convey. It is, of course, true that one of the objections to decreeing a conveyance is, in this situation of the matter, eliminated. The- court would not have to decree that the married woman make a conveyance, coupled with an acknowledgment that she does that freely, &c., which, in fact, she does only under compulsion; but the other objection remains. By the policy of our law she can only pass or affect her interest by an acknowledged dee'd or agreement. If the deed or agreement be not acknowledged—and' the acknowledgment is, as I have said, of the essence of the transaction'—then her interest in the land did not pass, and the complainant being without any interest (whatever right he may have to sue for damages at law), is not in a position to demand that the married woman’s grantee shall do that which the grantor herself is not compellable to do.


author: Stevens, Y. C

text:
    Ferdinand H. Wisner, trustee, v. J. K. Osborne et al.
    [Filed May 16th, 1903.]
    An insolvent debtor permitted his infant son who lived with him to contract for wages to be paid to the son.—Held, that the stock of a corporation into which the wages were afterwards converted and which stood in the name of the son, is not subject to the claims of his father’s creditors.

      Mr. Beecher and Mr. Thompson, for the complainant.

      Mr. John B. Hardin, for the defendants.
   Stevens, Y. C

This case is, in its essential features, like Taylor v. Wands, 10 Dick. Ch. Rep. 495. There John Taylor, as here J. K. Osborne, having failed in business and being heavily indebted, undertook to form a corporation, putting in as capital money derived from the surrender of an insurance policy issued for the benefit of the wife. There, as here, the stock representing the money put in was, most of it, issued to the wife. There, as here, the debtor took one share, of stock to qualify him to become a director and president, and there, as here, the stock, chiefly through the debtor’s skill and experience, increased greatly in value and the company earned and paid large dividends. It was there held by the court of errors that the wife and her transferees were not only entitled to retain the stock as against her husband’s creditors, but were also entitled to the company’s earnings, although, as Mr. Justice Magie said in that case, the corporation owed its success to the husband’s business ability and exertions.

I cannot find anything in the proofs to differentiate that case from this.

The evidence is voluminous and some of it vague and conflicting, but the material facts are few in number and not controverted. Much of the evidence relates to a period when the company’s affairs became prosperous, and has little, if any, bearing upon the merits, being admitted only because it was claimed that it would throw a reflex light upon the period of organization in 1892. It does not seem to me to illumine that period at all or to cast any doubt upon the real character and the good faith of .the original transaction if we view it in the light of the law as authoritatively laid down in Taylor v. Wands.

Eor three years the company had a precarious existence, having few assets, loaded down with debts and subject to chattel mortgage sales. Had this suit been brought during that period there would have been absolutely nothing on which to found a decree that the stock or the property was really the husband’s and subject to his debts. The mere fact that this company, after that time, became prosperous and that its prosperity was due in large measure to the efforts of the husband in his character of officer and manager cannot convert that into his property which before belonged to his wife.

Section 9 of the bill of complaint charges that the stock of the company belongs to Joseph K. Osborne, but that fifty shares stand in the name of his son, Edgar, and section 15 charges that the stock is in equity subject to the lien of the judgment. In support of this vague allegation the plaintiff relies upon the following facts: Edgar came of age on June 29th, 1894. Both before and after that time he lived with his father. At the age of seventeen he went to work in a printing office in New York. He received first $5 a week and afterwards $10. A part of his earnings he, with his father’s consent, invested in stock of the Eighth Ward Building and Loan Association. The investment was made in his own name. When the J. TL Osborne Manufacturing Company was organized he sold this stock and gave the proceeds ($400) to its treasurer. Eor this he received on October 29th, 1892, three shares of the J. K. Osborne Company.

About the same time he went into that company’s employ, receiving first $5 a week, then $10, and afterwards more. On April 27th, 1895, the company was indebted to him for salary the sum of about $800. On that day an agreement, in writing, was entered into between himself, his father and mother and one Wolfe for an apportionment of one hundred and seventy-five shares of unissued stock, by the terms of which he was to receive, and did in fact receive, thirty-two shares. This was received by him apparently in satisfaction of the moneys owing to him at the time by the company. The stock certificate book and the minutes show that the stock was issued to the stockholders in a very irregular way, but, so far as Edgar’s liability to the complainant is concerned, these irregularities are not very material. The issue to Edgar of three shares is thus shown to have been made at a time when he was a minor, and the $800, for which the thirty-two shares were issued, represented wages or salary due in part before and in part after he came of age. The contention is that the money which Edgar put in and the wages due for his labor before his majority belonged to his father, and that consequently the stock given for them is, in law, stock held by him in trust for his father and subject to the claims of his father’s creditors.

I will assume that the before-mentioned allegations of the bill are sufficiently specific to permit of this contention being urged. On that assumption I do not think that the claim can be maintained. The question is, can a father who is indebted permit his minor son, as against his creditors, to receive and invest his earnings and hold them as his own ?

According to the Roman law, children of any age, begotten in lawful wedlock, were under their father’s power. As regarded the person, this power, until after the time of Augustus, extended to their life and liberty; as regarded property, in the words of the Inst. Lib. 11 tit. 9:

“Anciently whatever came to children, male or female, was acquired for the parents without any distinction, if we except the ‘peculium Castrense,’ and this so absolutely that what was acquired by one child the parent might have given to another or to a stranger or sold it or applied ■it in what manner he thought proper.”

In the time of Justinian, however, the father was only permitted to take the usufruct of what the son had acquired by any other means than his father’s fortune. The father might, indeed, have emancipated the son, but emancipation, at any age, depended almost entirely upon the father’s will.

In striking contrast with the civil law is the common law. That law gives the infant’s property to the infant. It does not even give the father the usufruct or enjoyment of it during the limited period of the son’s minority. Says Blackstone (1 Bl. 453) :

“A father has no other power over his son’s estate than as his trustee or guardian, for though he may receive the profits (of land held by Socage tenure) during the child’s minority, yet he must account for them when he comes of age.”

As to personalty, says Judge Vredenburgh, in Graham v. Houghtalin, 1 Vr. 557, when a child, in the lifetime of its father, becomes vested with it, “no one is strictly entitled to take it as guardian until a guardian has been duly appointed by some public authority.” Under paragraph 38 of the Orphans Court act (Gen. Stat. p. 2363), first enacted in 1843 (P. L. of 1843 p. 84), the father may be appointed guardian of the estate, real and personal, of his minor children.

The law is that the minor’s property, however acquired, is his own, and that even the father, if he be trusted with its administration, must account to the infant for it when he comes of age.

This is the status of the minor’s property. Now, as to his earnings. Says Blackstone (1 Bl. 453) :

“He [the father] may indeed have the benefit of his children’s labor while they live with him and are maintained by him, but this is no more than he is entitled to from his apprentices or servants.”

But it has been held that if the contract, made with his father’s consent, be to pay the child, tiren the child is entitled to his earnings and may enforce his right to them, by suit. Snediker v. Everingham, 3 Dutch. 143. They belong to him just as any other property belongs to him. It is obvious that the contract may assume several phases. The father may (1) contract with the employer for his son’s service, and may expressly stipulate that the wages shall be paid to him (the father); or (2) he may stipulate generally for such service without saying to whom the wages shall be paid, and in either case he alone will lie entitled to sue for them; or (3) as was done in Snediker v. Everingham, supra, he may stipulate that the wages shall be paid to the son, in which ease the son may sue for them; or (4) the son, with the father’s consent, may make the bargain for wages payable to himself (the son), in which case, also, the son may sue for them; and the father’s consent may be expressly given or it may be implied from circumstances. Stall v. Fulton, 1 Vr. 430. It has always been the law that an infant’s contract, beneficial to himsélf, is not necessarily void, but, in general, voidable at the option of the infant when he arrives at full age. It is often capable of being enforced by the infant against the other party to it. The law is thus stated in 5 Bac. Abr. 134 tit. “Infancy and Age:”

“It is laid down as a general rule that infancy is a.personal privilege, of which no one can take advantage but the infant himself, and that therefore, though the contract of the infant be voidable, yet that it shall bind the person of full age. For being an indulgence which the law allows infants to protect and secure them from the fraud and imposition of others, it can only be intended for their benefit and is not to be extended to persons of years of discretion who are presumed to act with sufficient' caution and security. And were it otherwise, this privilege instead of being an advantage to the infant might in many cases turn greatly to his detriment.”

It has been, held that where a contract for service made by an infant is shown to be beneficial to him, it may be binding upon him. Leslie v. Fitzpatrick, 3 Q. B. Div. 229. Tested by these well-established rules, it is entirely clear that the creditors of J. K. Osborne cannot assert with success that the stock held by Edgar belongs to his father. The fair implication from the evidence is that the agreement with the printer was made for Edgar’s benefit and that the wages were to be paid and were actually paid to Mm. His ownership of the money thus received is further evidenced by his investment of it in Ms own name, without objection on the part of Ms father, in a building association, and by his subsequent payment of it to the J. K. Osborne Company. So, too, as far as appears, the contract of the J. IC. Osborne Company was to pay, not his father, but Edgar; and his father’s assent to the arrangement appears not only from the fact that he was the company’s manager, but also from the fact that he joined in the agreement of April ^th, 1895, which gave the stock to Edgar. Up to the moment when Edgar took the stock the wages, therefore, were Ms own, and if his, then the stock into which they were converted was his also.

But it is said that while a father may give to his son Ms son’s earnings when solvent he may not do it when insolvent. This proposition is fallacious in that it implies that all the son’s earnings, past and future, under all circumstances, belong absolutely to the father, who it is said has no more right to. make a gift of them than he has to make a gift of any other of his property.

This might be true of a case in which the father has bargained for payment to himself, if wages might be claimed in a creditor’s bill, a claim, under the law of New Jersey, of more than doubtful validity in view of the provisions of our Execution and Chancery acts (Gen. Stat. p. 1423 § 40; Gen. Stat. p. 390 § 91), which exempt from seizure Avhat is due for the labor or personal services of the debtor or any member of his family, and of what is said in Whitney v. Robbins, 2 C. E. Gr. 363, viz., that the court of chancery has no original jurisdiction to collect the choses in action of a debtor and apply them to the payment of his debts.

If a son’s wages are not subject to the claims of creditors either at common law or by statute, their transfer to the son cannot be fraudulent. But, however this may be, the proposition above contended for could not be true of a case in which the bargain, made with the father’s consent, was that the wages should be paid to the son. In such a case they would belong to the son ab initio. He might, as I have shown, enforce payment of them by action.

The contention would then go to this extent—that when a father is indebted, he is under a disability that will prevent him from allowing his son to make a bargain for wages—he must compel his son to labor for the benefit of his father’s creditors. No such doctrine is to be found in our law. Atwood v. Holcomb, 39 Conn. 275.

There are two cases in our court of last resort which are very much in point. The first is Peterson and wife v. Mulford, 7 Vr. 481. In that case it was decided that a husband might permit his wife to labor for herself and to appropriate to her own use the avails of her labor, and that such permission is good against the creditors of the husband if such proceeds have not actually been reduced into his possession. In this case the wife had saved $200 out of her earnings. She took the money and with it and with a note which she gave, procured an assignment to herself of a mortgage upon property of her husband at a time when he was heavily indebted. She did it at his suggestion and with his consent, and it was held that the transaction was valid as against her husband’s creditors. This was a stronger case than that of an infant, for at common law the husband’s control over his wife’s earnings was absolute. At the time of the decision the statute had not, as it now has, given to the married Avoman her own earnings. The court nevertheless said: “Though the earnings of a wife are not within the provisions of the Married Woman’s act, yet in a series of decisions in this state arising out of the spirit of that act and in accordance with its provisions, it has been held that the earnings of a married woman working-on her own account by her husband’s permission, or earned in working- for herself without his permission, if given to her by him, are her separate property and within the provisions of that act, and that a husband is not bound to compel his wife to labor for his creditors or to appropriate her earnings for them, and that such permission and gift are valid as against his creditors.”

A still more direct authority is that of Costello v. Prospect Brewing Co., 7 Dick. Ch. Rep. 557. The syllabus of that case is as follows:

“A wife to whom her husband had made a voluntary conveyance of an equity of redemption of real estate, paid, with- her husband’s consent, out of her own. and her children’s earnings, a portion of the mortgage debt. On a bill filed by her husband’s precedent creditors to set aside the conveyance to the wife as fraudulent—Held, that the decree should preserve the right of the wife to a lien for the amount which she had so' paid.”

Judge Reed, delivering the opinion of the court, said: “The right of a father to forego his claim to the earnings of his children is equally clear. He may sell or give to the infant his time or authorize him to make contracts in his own name and receive pay therefor, and in such case the minor may sue for and recover his wages. There is no rule of law which requires the husband to compel the wife or the parent to compel the children to work for his creditors.”

In the case in hand it is as I have said a fair inference from the evidence that the contract for wages was made with the father’s consent and that it contemplated payment to the son. The wages, therefore, belonged to the son and not to the father. They were as much his property as anything that came to him by gift or bequest. When he received them he could invest them as he pleased.


author: Grey, Y. 0.

text:
    Harry L. Campbell et al. v. The John W. Taylor Manufacturing Company.
    [Filed May 15th, 1902.]
    A person, not in the employ of an insolvent corporation, who loaned money to the corporation upon an understanding that it would be used to pay the wages of its laborers, is not, when-the corporation is decreed to be insolvent, entitled to the preference allowed by section 83 of the General Corporation act (P. L. of 1896 p. 303) to laborers in the regular employ of the company.
    On appeal of the Prentiss Tool and Supply Company, a preferred creditor, from the determination of the receiver allowing the claim of William Hurt, trading as S. C. Hurt & Son, as a preferred creditor.
    It is stipulated between counsel that the testimony taken before the receiver in this matter shall be used in this hearing; and it is further admitted that, on December 8th, 1900, the John W. Taylor Manufacturing Company made an entry in their journal to- this effect: “S. C. Hurt & Son, draft $700.” And that was transferred to the ledger account, giving -S. C. Hurt & Son credit for $700; that the $700 so acquired by the company was used to pay the pay-roll for wages due laborers, employes and other persons in the general employ of the company, within two months prior to the date of the filing of the bill for the appointment of a receiver.
    [The case was then argued.]

      Mr. Charles K. Chambers and Mr. John M. Perry, for the Prentiss Tool and Supply Company.

      Mr. John C. Sims, for William Hurt, trading as S. C. Hurt & Son.
   Grey, Y. 0.

(orally).

Tlio preferred claimant, Mr. Hurt, is shown to have advanced $700 to the insolvent company. He had an understanding that it was to be used to pay the wages of the company’s laborers. It was so used. When the insolvency of the company was declared he proved this $700 advance, as a preferred claim, under section 83 of the General Corporation act (P. L. of 1896 p. 303), allowing a preference for the amount of wages due to laborers, &c., in the regular employ of the corporation, for labor done within two months before the proceedings in insolvency. The receiver has allowed this preference to Mr. Hurt, and upon this allowance the appeal now being heard has been taken. The appellant is a preferred creditor, whose dividend will be affected by the preference allowed to Mr. Hurt.

Mr. Hurt does not claim to have been in the employ of the insolvent corporation. The practice in this court, in allowing these statutory preferences, has been to limit them to persons who were within the class named in the statute. Consolidated Coal Co. v. Keystone Chemical Co., 9 Dick. Ch. Rep. 310. The terms used in the act expressly prescribe that the preference is given to laborers and workmen and persons doing labor in the regular employ - of the company at the time of the insolvency. It is a purely statutory right, and it was probably created for the purpose of preventing a general exodus of the workmen employed by corporations in anticipation of the failure of the company. It is intended to induce employes to remain at their work, even if financial disaster be threatened, by assuring them that they shall not lose their wages. A company which has a large number of employes may be in some financial straits, and may yet, if it can continue its business, regain its prosperity. But if its employes, anticipating that their wages will not be paid, leave its employ in a panic, absolute disorganization and destruction of the business may follow. The statute here intervenes and assures them that they, at all events, shall be paid. It refers, by its very words, to laborers, workmen and employes only, giving them a preference. There is neither provision for, nor recognition of, any power in the employes to assign their rights; nor of any right in anyone who may have, loaned the company money with which to pay wages, to have any equitable subrogation to the privileges of the company’s employes.

In the present case the testimony does not even indicate that there was any contract that the money loaned should be used to pay wages of laborers. The proof is that it was advanced by the claimant upon “an understanding” that it would be so used. There was no contractual undertaking between the company and Mr. Hurt, that the advances made by him should be used to pay laborers, and that for the sums so advanced he should stand in the place of the laborer. It does not appear that the company had any right, by its agreement with Mr. Hurt, to confer upon him a preference which the statute, by its terms, gives only to laborers in the regular employ of the corporation. There is no pretence that there was any agreement between the laborers who had the right, and Mr. Hurt, that his advances of the money which paid their wages should be secured by a transfer of their right to collect their wages by preference against the company.

There is no' attitude in which this claim of Mr. Hurt can be presented which will enable him to stand in the place of the laborers, and receive, for the money which he loaned to the company, the preferential consideration which the statute gives to the company’s employes for their wages.

The receiver’s allowance of a preference to Mr. Hurt for the moneys advanced by him to the company should be set aside. I will advise such an order.