text:
    Pen Carbon Manifold Company, respondent, v. James E. Tomney and another, appellants.
    [Submitted November Term, 1918.
    Decided March 3d, 1919.]
    1. An agreement made in settlement of litigation, to preserve secrets as to certain machinery and processes, will be enforced.
    2. Where a bill is filed to enforce an agreement to preserve secrets, praying for an injunction against disclosure of secrets, a decree enjoining the disclosure of any information relative to all machines xised or designed for use in the business, and not limited to the secrets iwoteeted by the contract, goes too far.
    3. In order to protect a complainant's rights under an agreement to protect secret processes and machines, it is proper to require, the defendant to deliver to the complainant patterns, photographs, drawings, designs, parts of machines, tangible and informative writings relative to the machines, 'their use. or operation, or any secret methods employed in the construction.
    On appeal from a decree of the court of chancery.

      Mr. Alfred 8. March and Air. J. Benjamin G-liieck field, for > the complainant-respondent.

      Mr. Edmund A. Hayes and' August G. Streitwolf, for the def en dants-appellants.
    The facts sufficiently appear in the vice-chancellor’s opinion.
   Tire opinion of the court was delivered by

Swayze, J.

The rights of the parties, grow out of the contract of December 22d, 1914. The validity of the restraint imposed thereby depends on whether it was nó more extensive than was reasonably required to protect the interest of the party in favor of whom it was given and not so large as to interfere with the interests of the' public. Trenton Polteries Co. v. Oliphant, 58 N. J. Eq. 507; Taylor Iron and Steel Co. v. Nichols, 73 N. J. Eq. 685. To determine the validity of the restraint we must bear in mind the interest to be protected by the contract. The object was to settle a litigation between the parties, and to secure the complainants in the enjoyment of secret processes and secret machines. The interest to be protected was the maintenance of secrecy, and it was nothing more. To secure secrecy the contract properly provided that the ten two-color ribbon machines should be made in secret and that certain other machines should be kept private and secret at all times. But the other, machines thus referred to could be only machines based upon or embodying some secret. Only to such machines could the provision against divulging without consent of the complainants in writing under seal apply. If the contract was meant to be broader and to restrain the use or manufacture of machines which rested upon or embodied no secrets, it would go farther than the contract intended, and farther than the law permits. To guard against so broad a construction and safeguard its own validity, the contract provided that its true object was to settle the rights of the present complainant to the machines, patterns, formulas, processes, &e., and “to declare the same as the secret property of the said party of the second part, together with the special rights to use the same under secret methods and processes.” Thus interpreted, and limited to the protection of the complainant’s secrets, we think the contract valid. It follows that the complainant was entitled to have it enforced.

By the original bill in the present suit the complainant made it clear that it was seeking only the protection of secret pro-, cesses and spieeial and secret machinery, and of the secret and special designs of Archibald. Its complaint was that the defendant James E. Tomney had imparted important information relative to all the secret formulas, designs and processes mentioned to his son, Charles, the co-defendant, and that they were engaged in the construction of machines from the complainant’s secret and exclusive designs and maps, and were imparting information relative to the construction of important parts of the secret machines to persons not entitled to receive the same. The bill prayed for. restraint against transferring or disposing any of certain articles mentioned, against constructing or using any ribbon machines or parts thereof as described in the bill and annexed schedule, and from imparting and divulging any information concerning the articles and things mentioned, and from using or employing any of said formulas, methods or processes for the manufacture of inked ribbons and accessories. After the dismis°al of the bill, what is called an amended, but is really a supplemental bill, was filed. This also counts upon the complainant’s secrets and sets forth by name eight different machines which the complainant is using secretly and exclusively, and prays for protection as to those machines.

If the decree had been limited to an injunction against disclosing secrets or manufacturing or disposing of machines based on or embodying the complainant’s secrets, thus enforcing the contract in accordance with its necessary construction, we should have had no criticism to make. By a common oversight, the language of the decree was broader than the contract or the bill justified. As we read it, the defendants are enjoined from disclosing any information relative to the design, construction, use and operation, not only of the machines specifically mentioned, but any and all other machines, &c., used or designed for use in the inked ribbon, carbon and stencil industries, and from designing, constructing or producing any machines designed for use in the business named. The decree, therefore, goes too far and must' be modified. Whether the “hand and t,ype stencil machines” mentioned in the decree are within any of the classes as set forth in the bill is not clear. Probably counsel can agree as to that.

The defendants complained that they are required to deliver to complainants all patterns, photographs, drawings or designs of machines, all raw or 'finished parts of machines, all tangible and informative writings relative to the machines, their use or operation, or to any of the secret methods employed in construction. We agree with the vice-chancellor that this is necessary to the proper protection of the complainant’s secrets, and we see no objection to' requiring the defendant to perform what the decree directs.

The decree is modified and the record remitted to the court oi chancery. Neither party is entitled to costs in this court.

For affirmance — None.

For reversal — None.

For modification — The Chief-Justice, Swayze, Teen-chard, Parker, Bergen, Minturn, Ealisch, Black, White, I-Iisppeni-ieimer, Williams, Taylor, Gardner — 13.


source: Caselaw Access Project

author: Trenchard, J.

license: Public Domain

text:
    In the matter of the estate of Lillian Nordica Young, deceased.
    ÍArgued November 27th, 1918.
    Decided March 3d, 1919.]
    1. A woman competent to make a will has a right to the aid of any person she may think proper to select, when she, desires to put her testamentary wishes in form to have legal efficiency, and if she exercises this right without improper interference or control, though-she selects a person she intends to make one of her beneficiaries, that fact, in the absence of evidence showing an abuse of confidence, constitutes no reason why probate should be denied to her will.
    2. "Where fraud is charged, the court will scan with care the relations ol' the testator with her beneficiary, prior to and at the time of the execution of the will, for the purpose of seeing whether they, in connection with the provisions of the .will, tend to prove or disprove the charge of fraud.
    3. No court lias power to refuse probate to a will merely because the. disposition the testator has made of her property by it appears to the court to be unnatural, unreasonable or unjust. It is as much the duty of the court to uphold the right of the owner of property to dispose of it by will as she pleases, as it is to see that she is not imposed upon in the exercise of that right.
    I. Where it appears that the testator, a highly intelligent and educated woman, caused the draft of a will, consisting of but two type written sheets, to be submitted to her for examination several days prior to its execution, and that immediately before its execution, while she was slightly ill but mentally alert, she “read or looked at' it about half a minute,” it will be inferred that she at least scanned it sufficiently to truthfully say, as she did say, that she had read it and understood it.

      5. The orphans court will be held to have had jurisdiction to probate a will begun by petition for the probate of an earlier will, it appearing (1) that such petition alleged that a dispute existed as to which of the two documents thereto annexed was the testator’s last will; (2) that all parties in interest under both alleged wills were before the court cited to abide the order to be made respecting such “paper or papers (3) thát before the hearing was concluded, with the consent of the proponent and sole beneficiary of the earlier will, an appropriate petition for the probate of the later will (which contained an express clause of revocation) was ordered filed nano pro tuno, together with appropriate answer thereto, and (4) that the matter then proceeded to a decree, admitting to probate the later will and denying probate to the earlier will, without any objection in the orphans court to the jurisdiction of that court.
    On appeal from a decree of tlie prerogative court adiised by Yiee-Ordinal’y Stevenson.

      Mr. Harry Lane and Mr. John O. Tomlinson and Mr. Alfred G. Goxe, Jr. (of the New York bar), for the appellant.

      Mr.-Edmund IF. Leake, Mr. William E. Lecher and -Mr. Robert IF. Light (of the Boston bar), and Mr. Walter IF. Westall (of the New York bar), for the respondents Robert S. Baldwin, executor, &c., and Annie Baldwin and lone Walker, legatees.

      Mr. William Hamilton Osborne, Mr. George B. Asiley and Mr. Albert G. Thorne (of the New York bar), and Mr. Paran P. Rice (of the California bar), for the respondent' Imogene Castillo.
   The opinion of the court was delivered by

Trenchard, J.

This appeal is taken from a decree of the prerogative court-affirming a decree of the Monmouth county orphans court dated October 19th, 1916, admitting to probgte a document offered as the last will of Lillian Nórdica Young dated January 10th, 1914, and denying probate to an earlier will dated July 3d, 1910, revoked by the will of 1914.

We are of the opinion that the decree must be affirmed.

Madam Nórdica, the decedent, was a professional singer. She married George W. Young, the appellant, in London, England, in 1909. Thereafter they made their home at Deal, Monmonth county, New Jersey. " • ,

In June, 1913, she embarked upon a concert tour “around the world.” Whilst on the way from Australia to Japan she became ill and was taken to the Torres Straits - Hospital at Thursday Island. There the will of January 10th, 1914, was executed. She remained, there until March 28th, 1914. She died at Batavia, Java, on May 10th, 1914.

Madam Nórdica left surviving as her only heirs-at-law and next of kin her husband, George AY. Young, and her three sisters.

The will of 1910 differed from the will of 191-4, mainly in that under the former the testator’s husband was the sole beneficiary, whilst in the latter her sisters were*the chief beneficiaries.

The will of 1914 bequeathed to Maria Masino, the testator’s maid, $5,000; to Ada Baldwin, her companion, $1,000; .to E. Romayne Simmons, her accompanist and .secretary, $30,000; to George W. Young, her husband, “his legal portion of the stock now in my name of the Securities Company.” The residuary estate was devised and bequeathed to her three sisters, Mrs. Imogene Castillo, Mrs. Annie Baldwin and Mrs. lone Walker.

George AY. Young, Robert S. Baldwin (nephew) and E. Romayne Simmons were named as executors.

In explanation of the bequest to her husband the will contained the following statement:

“In this distribution of my property I am not forgetful of my husband, George AV. Young, to whom I have advanced over $400,000 in cash, which I estimate as the full or more than full share to which he might be entitled.”

The will made provision for the cremation of the body of the 'dec-eclent, and contained an express clause of revocation.

If, therefore,-the will of 191-4 was properly probated, the will of 1910 was properly denied probate. AAe think it was.

It is true the attestation clause of the 1914 will is incomplete, but the testimony of the subscribing witnesses shows that it was properly executed as required by law.

The first contention of Mr. Young, .the appellant, is that the will was improperly probated because it did not appear that Madam Nórdica had read it or was properly informed of its contents before she signed it.

TYe think that contention is ill-founded.

The attesting witnesses were Willi am Millan Lebryce, government resident at Thursday Island, and Sadie Charlotte MacDonald, matron of the hospital on Thursday Island.

Deduced to narrative form the testimony of Miss MacDonald respecting the execution of the will is in part as follows:

“Maclam Nórdica was an inmate of the hospital suffering, but not seriously, with pleurisy and pneumonia. Several days prior to January 10th (the date of the execution of the will), I heard lior ask Mr. Simmons, her manager, whether her will was ready. He kept putting her, off, but prior to January 10th he brought Madam a draft of a will. On January 10th, when I first went into Madam’s room with Mr. Lebryce, Mr. Simmons was there. Mr. Lebryce said that Mr. Simmons had brought him the will for execution. Mr. Simmons then asked Madam to have his name ‘taken out of the will.’ Then Mr. Simmons went out. She requested us to witness the will, saj'ing to Mr. Lebryce, T sent for you to witness my will.’ Mr. Lebryce presented the will to Madam, and asked her if it was-her will, if she read it and if she understood it. She said ‘Yes; I have rend it and I understand it.’ I then placed the will in Madam's lap and she signed it. I took the will, and I said to her ‘Is this your will and your wish?’ And she said, ‘It is my will anti my wish.’ I then signed my name and occupation and address. Mr. Lebryce signed his name, occupation and address.”

Mr. Lebryce, the other attesting witness, in answer to interrogatories, testifies:

“I asked her (Madam Nórdica) if she knew the contents of the document and whether it expressed her wishes regarding the distribution of her property. She said it was her will, and that it expressed her wishes regarding the distribution of her property. She made -this known to me by words. I do not remember her saying that she had read it. but she satisfied me that she knew what the document contained and she acknowledged it to be her will.”

It will be seen that this uncontradictecl evidence is most persuasive that Madam Nórdica understanding^ published and declared that document to be her will.

The appellant seemingly recognizes the force of this, for he insists that it may be “conjectured” that she was mistaken and that when she said she had read it and understood it she referred to the draft of the will which had been presented to her several days before by Mr. Simmons, and which, the appellant argues, may have been very different from the will she executed.

Considered from any and every angle the record satisfactorily shows that this is not so.

In so far as the argument involved the contention that Madam Nórdica was fraudulently imposed upon by Mr.' Simmons, and thus induced to execute a paper which was not her will, we think it entirely without merit.

It rests upon these circumstances as its only foundation— (1) the fact that the document was, dr awn, or caused to be drawn, by Mr. Simmons, and (2) the fact that he received thereunder a legacy of $30,000..

That Madam Nórdica was entirely competent to make a will seems not to be questioned — indeed, it could not be questioned in view of the evidence.

A woman competent to make a will has a right to the aid of any person she may think proper to select, when she desires to put her testamentary wishes in form to have legal efficiency, and if she exercises this right without improper interference or control, though she selects a person she intends to make one of her beneficiaries, that fact, in the absence of evidence showing an abuse of confidence, constitutes no reason why probate should be denied to her will.

In this case there is no evidence of improper interference or control, no evidence of undue influence, and we do not understand that this is seriously urged.

Of course, where fraud is charged the court should scan with care the relations of the testator with her beneficiary, prior to and at the time of-the execution of the will, for the purpose of seeing whether they, in connection with the provisions of the will, tend to prove or disprove the charge of fraud.

We have done so, and find no evidence of fraud or imposition. It may bo well to -remark that the appellant is mistaken in assuming that Mr. (Simmons took the initiative. _ It clearly appears, on the contrary, that the initiative was taken by Madam Nórdica. In this connection Miss MacDonald testified:

“Q. Did you hear any discussion by Madam Nórdica prior to January 1 Oth, 1914. about a will?
‘■A. Yes.
“Q. With whom?
“A. I continually board Madam Nórdica ask several days previous .to that if her will was ready.
“Q. Of whom did she ask that question?
“A. Mr. Simmons.
“Q. What did he reply to that?
“M. Well, he appeared to me to be putting her off, always. Madam herself thought that he had a superstitious idea that if she made a will it was bad luck.” >

It clearly appears that a draft of the will was made, or caused to he made, by Mr'. Simmons, and was submitted by him to Madam Nórdica several da}s before the execution of the will on January 10th, 1914.

On this topic Miss MacDonald testified on cross-examination:

“Q. Now, you had no knowledge as to whether Madam Nórdica had ever seen it before or not, had you?
“A. Well, I know that she had had her will submitted to her some days before.
“Q. Prior to January 10th, 1914, did you see the Madam have a will in her possession?
“A. I know that Mr. Simmons brought the Madam the draft of a will.”

It satisfactorily appears, also, that the legacy to Mr. Simmons conformed to the wish of Madam Nórdica.

The same witness testified:

“Q. Now. does that exhaust your recollection as to what occurred?
“A. I remember that when I first went into the room with Mr. Lebryee. Mr. Simmons was there, and that Mr. Simmons asked Madam to have his name taken out of the will.”

lt further appears that immediately thereafter Mr. Simmons left the room, and the will was executed in his absence.

It further appears that after the will was executed 'it was left with Madam Nórdica in her room.

As a makeweight the appellant contends that the' will was unnatural and unjust. But we cannot say that it is so. We cannot say that the bequest to the testator’s private secretary and accompanist was an unnatural one. He had served her for sixteen years. Neither can we say that the reduction of the legacy to her husband was unjust, in view of her statement in the will that she thought it fair considering the large cash advances she had made to him.

But, however this may be, no court has power to refuse probate to a will merely because the disposition the testator has made of her property by it appears to the court to be unnatural, unreasonable or unjust. It is as much the duty of the court to uphold the right of the owner of property to dispose of it by will as she pleases, as it is to see that she is not imposed upon in the exercise of that right.

As showing that Madam Nórdica was not imposed upon, and that she understood the provisions of her will, the following testimony of Miss MacDonald on cross-examination is significant:

“Q. And the paper was, folded, was it not, when he (Mr. Lebryee) handed it to her. it was folded?
“A. When he handed it to her it was open.
“Q. I-Ie presented it so that she saw the typewritten sheet?
“A. Yes.
¡'fi q: t\i % # % JH * *
“<p. He asked her if it was her will?
“A. Yes.
“Q. And she answered-
“A. Ye%, she had read it and it was her will, and she had read it and understood it.
“Q. She examined the paper?
“A. Yes; she looked at it.
“Q. Did she read it?
“A. I can’t say she read it through.
“Q. What do you mean when you say she read it?
“A. She looked at it.
“Q. She glanced at it?
“A. Yes.
“Q. Was any time consumed in the time she glanced at it and the time she answered yes?
“-4. No, just a short time.
“Q. Just a second — just an instant?
“A. I couldn’t say how long, but a very short time.
“Q. What do you mean by a very short time, expressed in minutes or' seconds?
“.4. Well, I should have thought about half a minute.”

We have no hesitation in giving full credit and effect to that testimony. It was given by a woman of intelligence and experience, trained to close and accurate observation. She was wholly disinterested, and was uncontradicted. Now, when we consider that the document that Madam Nórdica was called upon to examine consisted of but two typewritten sheets; when we consider that, though slightly ill, she was a woman of education and lively intelligence, in full possession of her mental faculties, and intent upon the business in hand; when we consider that the will had been previously submitted to her after having been drawn by her order, we conclude that during the “half a minute” in which she “read or looked at” the will, she at least scanned it sufficiently to truthfully saj’, as she did say, that she had read it and understood it.

Lastly; the appellant contends that the orphans court had no jurisdiction to admit the will to probate.

We think there is no merit in this contention.

The mere fact that the proceeding was begun by a petition filed by George W. Young, the husband, for the probate of the will of 1910, is immaterial. The petition alleged, among other things, that

"a dispute has arisen respecting the existence of an alleged will of Lillian Nórdica Young, purporting to be dated January 10th, 1914, the existence- or validity of which is denied by the said George W. Young, a copy of which said alleged instrument is annexed hereto.”

The matter being then certified into the orphans court, all beneficiaries, next of kin, and parties in interest, not only under the will of 1910, but under the will of 1914, were cited to appear “in the matter of the application of George W. Young for' an order admitting to probate a paper or papers purporting to be the last will and testament of Lillian Nórdica Young, deceased, and to abide the judgment and decree of said court in the premises.” The beneficiaries under the will of 1914 answered alleging revocation of the will of 1910 by the due execution of the will of 1914, and, subsequently, before the hearing was closed, two of the executors of the will of 1914 presented a petition for the prohate thereof, and, with the consent of counsel for Mr. Young, it was ordered filed name pro tunc, together with the appropriate answer of Mr. Young. The matter thereupon proceeded to a decree without any objection in that court to the jurisdiction of that court to probate the will of 1914. We conclude, therefore, that there is no merit in this objection made for the first time on appeal.

The decree under review will be affirmed, with costs.

For affirmance — Tiie Chief-Justice,' Swayzb, Trenciiard,' Parker, Bergen, Minturn, Kalis ch, Black, White, Heppeniieimer, Williams, Taylor, Gardner — 13.

For reversal — None.


text:
    Helen E. Marsh, complainant and respondent, v. Joseph A. Marsh, defendant and appellant.
    [Argued November 21st, 1918.
    Decided March 3d, 1919.]
    1. Courts of eguity will not aid one man to restrict another in the uses to which he may lawfully put his property unless the right to such aid is clear.
    2. Every doubt and ambiguity in the language of a covenant restricting an owner’s use of his property must be resolved in favor of the owner’s right.

      3. "Whether or not a covenant that “no building shall be erected on said lot unless the front foundation wall of the said building is at least seventy-five feet from” the street, is violated by the construction of a second-story sleeping porch upon the original one-story enclosed porch which rested upon three small cement piers, and which latter porch and piers, while in part within the restricted area, admittedly were not in violation of the covenant, is not so clear that a court of equity will aid in its enforcement.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lane, whose opinion is reported in 104 Atl. Rep. 373, and 89 N. J. Eq. 110.

      Mr. Charles Jones, for the appellant.

      Messrs. Edwin B. & Philip Goodell, for the respondent.
   The opinion of the court was delivered by

Trenchard, J.

This is an appeal from a decree enjoining the defendant below from violating a restrictive building covenant and ordering him to take down certain structures found by the court below to be in violation óf the covenant.

The facts are not in dispute. They are as follows:

The parties are next door neighbors. The defendant’s property is on the northeast coiner of Norwood avenue and a street called “Sunset Parkway North,” in Montclair, and complainant’s property is on Sunset Parkway North, adjoining the defendant’s property on the east. The two properties came from a common grantor, one Ralph Stout, whose title was restricted by a covenant similar to that contained in the deeds to the complainant and the defendant hereinafter recited. The defendant purchased his property in 1917 by deed eontáining the following covenant:

“That no building shall be erected on this lot unless the front foundation wall of said building is at least seventy-five feet from the front of the above premises on Sunset Parkway North.”

The complainant bought her lot from Stout in 1911 by deed containing a similar covenant.

The-property of the defendant, which he bought in-1917, had thereon a substantial house facing Nonfood menw, which was built by Stout in 1910. Its front foundation wall at its nearest point to Sunset Parkway North was seventy-five feet five inches from that street. On the “Sunset Parkway North” side of the house there was a porch fourteen feet wide and twenty feet long, supported by three small cement piers, one at each outer corner, aird one in the centre. ^ This porch was built and used as a living porch with removable screens in summer, which in winter were replaced by sashes and glass. The floor was of hard wood, like the floor of the livingrroom, but was somewhat lower. It was reached only by a door leading from the living-room. It was provided with a radiator connected with the regular heating system and was heated and used in winter. It had electric lights connected with the regular wiring system,, and was furnished as a living-room. This was the situation and condition of the house now owned by the defendant, when complainant bought her lot next door in 1911, and it remained for years in the same condition.

Some time in October, 1917, shortly after buying- his propertjy the defendant commenced the addition thereto now complained of. The complainant thereupon filed this bill. Upon a temporary injunction being denied with the understanding that if defendant proceeded he did so. “at his peril,” he .completed the work. The only change made was to put above this enclosed porch, a sleeping porch co-extensive therewith, and of similar design, with open spaces for screens in summer and removable sashes in winter, and covered with a flat tin roof which had no connection .with the main roof of the house.

It was that “addition to, or superstructure upon, the piazza” that the defendant was commanded to remove.

Upon careful consideration of the evidence we are of the opinion, for reasons we will now state, that the decree cannot be sustained.

Of course, the rule is well settled that courts of equity will not aid one man to restrict another in the uses to which he may lawfully put his property unless the right to such aid is clear.

It is also well settled that every doubt and ambiguity in the language of a restricting covenant must be resolved in favor of the owner’s right. Fortesque v. Carroll, 76 N. J. Eq. 583; Howland v. Andrus, 81 N. J. Eq. 175.

The learned vice-chancellor recognized these rules, but he considered that the language of. the covenant clearly prohibited the addition of the defendant’s building.

We have been unable to take that view.

Eor the purposes of the case we assume, as the vice-chancellor found, that the building prohibited by the covenant, properly construed, is one whose front foundation wcdl invades the restricted area. He said: “Construing it strictly, it seems to me that if any part of the front foundation wall is within seventy-five feet of Sunset Park North, there is a violation of the covenant.” But we are unable to say that the defendant’s building with the addition complained of, plainly offends against the covenant so construed.

It is quite plain that the building as originally built, and as it stood for seven years, did not violate the covenant. As the vice-chancellor said: “No objection was made to this structure, nor do I think there could have been any objection made to it.” This is so because, admittedly, no part of the front foundation wall was within seventy-five feet of Sunset Parkway North. The violation of the covenant must be found, if found at all, in the building of this superstructure upon the enclosed porch. But that does not render it a building whose front foundation wall is within the restricted area. It would seem that the three small cement piers do not malee it such. These were built by-Stout seven years ago. Although thej'-, and a part of the porch which they support, are within the restricted area, yet it is in; effect conceded in the complainant’s bill that such structure complied with the restrictions. We have pointed out that the addition complained of did not change the old enclosed yrorch or its foundation. We cannot say that what for years has been regarded, and even now is regarded, by all parties as inoffensive piers supporting an enclosed porch now becomes a fronl foundation wall, and hence a violation of the covenant, merely because the sleeping porch is superimposed upon the old porch.

Since the complainant’s right to. relief is at best doubtful, the decree below must be reversed.

A remiitilur to that effect may be entered, to the end that the complainant’s bill may be dismissed.

For affirmance — Kalisch, White, Williams, Taylor, Gardner — 5.

For reversal — The Chief-Justice, Swayze, Trenoi-iard, Parker, Bergen, Minturn, Black, PIerpenheimer — 8.


author: Parker, J.

text:
    William Freile et al., complainants-respondents, v. Joseph H. Rudiger, defendant-appellant. Solomon M. Schatzkin and Henry A. Oetjen, defendants-appellants.
    (No. 18.) (No. 16.)
    [Submitted December 9th, 1918.
    Decided March 3d, 1919.]
    The court of chancery having, at the request of all parties concerned, considered and decided various questions of order of liability of endorsers on a promissory. note, set-off, &c., and its decree being brought to this court on appeal, the questions are disposed of according to the results of judgments that should be rendered and' successful enforcement thereof, in a suit or suits at law, based on the facts as ascertained in the court of chancery and in this court, on the evidence in'the case.
    On appeal from a decree advised, by AUce-Chancellor Griffin, whose opinion is reported" in 104 Atl. Rep. 142, and 88 N. J. Eq. 91.

      Mr. John Millón, for the appellant, Rudiger.

      Mr. James D. Carpenter, Jr., for the appellants, Seliatzkin and Oetjen.

      Mr. Randolph Perkins, for the respondents.
   The opinion of the court was delivered by

Parker, J.

The hill was for injunction against the further prosecution of a suit at law upon a promissory note, and for a discovery as to the real ownership thereof and the circumstances of the addition of the words “without recourse” to the signature of the appellant, Rudiger, whose name appears as payee and first endorser; the claim being that these words constituted an illegal alteration;. complainants, who appear thereon as subsequent endorsers, asserting that the suit at law, in which one Oetjen, also an appellant, is plaintiff, was really for the benefit of Rudiger. The note reads as follows:

“$2,500.00. .7EiiSEY City, N. .7.. Oct. 27th, 1013.
“Three months after date we promise to pay to the order of J. H. Rudiger twenty-five hundred dollars at the Merchants National Bank of Jersey City, N. J. Value received.
“Orpheum Amusement Co.
“P. Edw. Wiscii, Pres.
“Anthony Michel, Treas.”
Endorsed as follows:
“J. H. Rudiger,
“Without Recourse.
“Anthony Michel.
“William Freile, MJD.
“P. Edw. Wiscii.”

■ It is conceded by all parties that the note was discounted by appellant Seliatzkin, who gave his check to the order of Rudiger for the amount of the note less the discount, and that this check for the proceeds was turned over to the Orpheum Amusement Company, the maker, a corporation in which all the endorsers were more or less interested, and the money used to meet its obligations.

It is also conceded or amply proved that the note was not paid at maturity and that Sehatzkin, the holder, demanded payanen! primarily of Eudiger, who, among other things, set up' a counter-claim for some insurance premiums due him from Sehatzkin, amounting to $2,240.90. As a result of their conversation Eudiger was empowered to obtain the note from Schatzkin’s New York attorneys, who held it-for collection. He went to see them and obtained the note; and before leaving the building added the words “without, recourse” to his own signature, and then took the note to attorneys in Jersey City, apparently selected by himself, and, later, under Hate of April 28th, 1914, Sehatzkin executed a written assignment .of the note to appellant Oetjen, an employe in the office of the Jersey City attorneys, who, concededly, has no beneficial interest in the note or in its proceeds, but is a nominal assignee for purposes of suit. Oetjen brought suit against the three complainant endorsers, Michel, Freile and Wisch, omitting Eudiger, and they later filed the bill in the present cause. All the parties seem to have waived any question whether equity had jurisdiction to decide all the issues arising, as, for example, the real liabilities of the endorsers inter sese, the real ownership of tire note; and so on, and requested the court of chancery to dispose of all the controverted matters, which it proceeded to do. There is serious question as to the jurisdiction of equity in the premises, but in view of the action of the parties we are content, for the purposes of this case, to follow the example set in Palys v. Jewett, 32 N. J. Eq. 302, without conceding the controlling effect of that decision.

The decree recites tire following findings of fact; the execution of the note and the endorsements, in the order as they appear; that the complainants endorsed for the accommodation of Eudiger or Sehatzkin; that when the note was made, Sehatzkin .owed Eudiger a sum equal to the amount of the note; and that the two agreed after the note was protested that if Sehatzkin recovered from the complainants he would pay Eudiger the amount he owed him, otherwise he Would apply it (i. e., tire amount he owed Eudiger) in discharge of the liability of Eudiger on the note; that Eudiger is liable primarily on the note, and that complainants are entitled to have the debt due from Sehatzkin applied in discharge of the note; that Eudiger’s writing of the words "without recourse” was a material alteration and discharged the complainants from liability on the note. The decretal part adjudges that complainants are not liable on the note to either Rudiger, Schatzkin or Oetjen; and directs an injunction perpetually restraining Oetjen from prosecuting the suit at law, and awarding to complainants costs and a counsel fee as against Rudiger,'Schatzkin and Oetjen.

In view of the sweeping submission by the parties of all the matters in dispute between them relating to the transactions in question, as recited in the vice-chancellor’s opinion and in the decree, the case stands as though in a suit at law on the note by Schatzkin as holder, or by Oetjen his agent, against the three complainants as later endorsers, they had brought in Rudiger as first endorser liable to them, ignoring the alteration; as though he had denied his primary liability and asserted that by the outside oral agreement between the endorsers he was to be last liable; as though, also, the claim of Schatzkin as holder against him were brought into the suit for adjudication, and he had set off against Schatzkin the amount due for premiums. These several controversies we proceed to consider.

1. We agree with the vice-chancellor that Rudiger failed to make out by the evidence that there was any agreement that he should he liable as endorser in any other way than that indicated by the position of his signature — i. e., as first endorser, and have nothing to add to the opinion of the vice-chancellor in that regard.

2. We agree that the addition of the words "without recourse” was unauthorized and was a material alteration.

3. The vice-chancellor properly held that Rudiger had a valid claim against Schatzkin for the insurance premiums, but not to the extent of the entire note, the amount being, as already stated, $2,240.90, with interest, from the maturity-of the noté.

4. But Schatzkin, represented hv Oetjen, is entitled to recover the amount of the note as against the complainants in the first instance; except so' fax as his rights are affected by the Rudiger counter-claim; for we do not agree that he was a party to the alteration by Rudiger or should be prejudiced thereby.

This results in a combination of awards which would work out thus:

1. Schatzldn (or Oetjen, which is the same thing) against complainants jointly and severally, for 'the amount of the note and interest. •

.2. Schatzldn against Rudiger, for the note and interest.

3. Rudiger against Schatzldn, for the insurance debt and interest.

4. Complainants against Rudiger, for amount recovered-against them by Schatzldn.

When by consent, and request of all parties a court of equity undertakes such a roundabout and multifarious adjudication, it should do so, if at all, by looking on that as done which ought to be done. We then reach this further result: Schatzldn having in contemplation of equity collected his award from complainants, and they theirs in turn from Rudiger, he is entitled to his insurance claim from Schatzldn, thus leaving $259.10 balance in the hands of the latter, which Rudiger has in effect paid. Or, to put it in another way, Schatzldn having held complainants and Rudiger liable on the note, complainants are entitled to have the note enforced primarily against Rudiger as first endorser. Practice act 1903 § 35; see Durand v. Trusdell, 44 N. J. Law 597. If the suit be considered as one against all the endorsers under sections 29 el seq. of the Practice act of 1903 (repealed in 191,2 and cognate legislation substituted), Rudiger might plead his set-off, and tire judgment against him would bo $259.10 as a balance. But this, of course, means that Schatzldn, by the allowance of the set-off, has collected $2,240.90 of drenóte, and to that extent has been paid by Rudiger; and Rudiger having thereby done only what he was bound by law to do as between him and complainants, the decree against them should in any ease be restricted to the balance of $259.10, and for this Rudiger is liable over to them.

This would be the precise result if the action at law liad proceeded to judgment against complainants, and they had paid, and recovered against Rudiger, as the vice-chancellor rightly held they would be entitled to do, and Rudiger had then collected the insurance claim from Schatzldn, leaving the latter with the $259.10 in hand.

We do not wish to be understood as adjudicating that this complicated tangle of claims could be thus disposed of in an action at law under our present practice, or that it is a suitable case for disposition by a court of equity. These questions have not been considered, as all the parties came into court praying a complete determination of their claims in one action, apparently without regard to niceties of pleading, find the court undertook to make such determination. Its decree is now before us on appeal, and the better way seems to be to take the case as we find it and affirm, modify or reverse the decree below according to our view of the facts.

Our result is that Schatzkin and Oetjen are entitled to a decree against Rudiger and the complainants for $259.10, with interest from January 27th, 1914, and that complainants, if they satisfy the decree, are entitled to recover over against Rudiger for the amount properly paid; that the decree stand in lieu of any recovery to which Schatzkin is entitled in the action at law, and to this end the injunction is retained.

The decree awarded costs to complainants -against Rudiger, Oetjen and Schatzkin, together with a counsel fee. No costs or counsel fee in chancery should be awarded against Schatzkin and Oetjen, as they were entitled to su'e on the note. Rudiger has not raised the question of costs as against himself.

With these modifications the decree below will be affirmed.

No. 16—

For affirmance — None.

For reversal — None.

For modification — The Chief-Justice, Swayze, Trenciiard, Parker, Bergen, Minturn, Iyalisci-i, Black, White, Heppeni-ieimer, Williams, Taylor, Gardner — 13.

No. 18—

For affirmance — The Chief-Justice, Swayze, Trencitard, Parker, Bergen, Minturn, Kaliscit, Black, White, Heppeniieimer, Williams, Taylor, Gardner — 13.

For reversal — None.


text:
    In the matter of appeal of United States Fidelity and Guaranty Company from affirmance in the prerogative court of decree in Essex county orphans court relating to estate of Mabel Vanderbilt, a minor.
    [Submitted December 9th, 1918.
    Decided March 3d, 1919.]
    1. A decree of the orphans court, passing the account of the administrator of a guardian, pursuant to section 118 of the Orphans Court act, so far as relates to acts of such administrator, and reserving leave to beneficiary to take such action against the estate of the guardian as she may be advised, is no final adjudication of the account of the guardian as to his own acts as such, and does not bar the subsequent granting of leave to file exceptions directed to such acts.
    2. A legacy of “one-half of the balance of the moneys, bonds and investments that I may die possessed of” held a general legacy.
    On appeal from a decree in the prerogative court advised by Vice-Ordinary Lewis, reported in 89 N. J. Erg. 497.

      Messrs. McDermott £ Enright, for the appellant.

      Mr. Gilbert Collins, for the respondent Mabel Vanderbilt.
   The opinion of the court was delivered by .

Parker, J.

The decree in the prerogative court simply affirmed a decree in the orphans court of Essex county, and we' turn to that for an ascertainment of the judicial action whereby appellants claim to have been aggrieved; which was, in short, that that court allowed a former decree which, as appellants claim, settled finally the accounts of Miss Vanderbilt’s father as guardian of her estate, to be opened to the end that she be permitted to file exceptions to that account. The particular exceptions proposed are based on the alleged negligence of her father in holding certain securities on- a falling market, as in Beam v. Paterson Safe Deposit Co., 81 N. J. Eq. 195; S. C., 32 N. J. Eq. 518; 83 N. J. Eq. 628; and it is claimed that the decree on accounting añade October 22d, 1915, adjudicated the propriety of his action, and was acted oai so that the later decree, made June 30th, 1916, and purporting to open it for exceptions, inequitably prejudiced a party who had acted in good faith in reliance on it.

Some examination of the facts is necessary. The property in question was bequeathed to Miss Vanderbilt by the will of her mother. Her father was appointed by the court guardiaaa of her estate in 1908 and received as guardian from himself as his wife's executor the securities in specie. The appealing guaranty company was his surety. He died December 31st, 1914, still in possession of these securities, and without having filed any accoaant of his guardianship, so far as appears. He seeiars to have left aao will. One William S. Woodhull was appointed his admiaaistrator, and pursuant to section 118 of the Orphans Court act (Comp. Stat. p. 3854) filed an account of this trust. We anay assuane for present purposes, without deciding, that this adequately claiancd allowaaice for transfer of the securities to a aaew guardian at the saane price as that at which they were taken. The qraestion, then, is whether the court sustained that claim and discharged the trust, aiad especially the estate of the father as guardian, froan all liability by reason of shrinkage; and if so, whether this was final. That the court had jurisdiction to do this is quite evident. Section 118 provides that whore a * * * guardiaaa * * * shall die without having fully settled up and obtained aaa allowance of his account of the administration of the estate that has come ioato his hands, it shall be lawful for the * * * administrator of such deceased " * * guardiaaa * * * to exhibit to the surrogate * * inorder to have the saane duly settled or allowed, aaa account * * * of the estate,” &c., and the orphans court is authorized and required to take cognizance of the said accounts and to proceed and act therein as is required iaa regard to accounts in other cases. And by section -127 of the same act, the decree of the orphans court on the final settlemeaat aaad allowance of the accounts of guardians, &c., shall be conclusive, and discharge such accountants of all claims beyond the balance found, except iaa cases where fraud or mistake is proved.

We assume, as has been said, that the account was filed and intended as a final account pursuant to this legislation and claimed exoneration for the value of the stocks as charged on the other side. But an examination of what is claimed to be the “final” decree on this account discloses a different state of affairs. The account alleged, and the decree recites, that the stock certificates are in the possession of the surety, appellant. It then decrees that the account “is in all things allowed as stated, in so far as the said account relates to the acts of said William S. Woodhull, as administrator of DeWitt C. Vanderbilt, in his relation as guardian for Mabel Vanderbilt;” charges the' estate of DeWitt C. Vanderbilt $632.8-1- reported short by the administrator; repeats the declaration that the stock and some savings bank books not now in question are in the hands of the surety; directs that they be turned over to Fidelity Trust Company as substituted guardian of Mabel; and then adds this significant clause: “And it is further ordered that the Fidelity Trust Company, substituted guardian of said Mabel Vanderbilt, and the.said Mabel Vanderbilt have leave to take such proceedings against the estate of said DeWitt C. Vanderbilt, or against the United States Fidelity and Guaranty Company, bondsman of the said DeWitt C. Vanderbilt as aforesaid, as it or she may be advised.”

This was on October 22d, 1915. Mabel had then been of age about two months. Her petition for leave to except to the account on the grounds aforesaid is dated May 25th, 1916. The court granted that leave; and its order to that effect is the matter of appeal.

We have difficulty in seeing why any such order was needed at all. If the administrator in fact asked a final discharge not only of himself but of the estate, he represented, he did not obtain it. The allowance of his account was expressly limited to his own acts as administrator of DeWitt C. Va'nderbilt, and did not extend to acts of the latter, as to which the. record shows no adjudication whatever. As to these, therefore, it is still entirely open. Normally, of course, exceptions should be filed not later than the date advertised or cited for settlement; but we have no doubt of the discretionary power of the court to permit belated exceptions before the account is actually passed. If so, it was clearly within its power in permitting the exceptions in this case, and tlie very language of the original decree put appellant upon notice that it did not adjudicate on anything but the acts of Woodhull himself and what should be done with the property in hand.

If any confirmation of this view were needed, it is supplied by the further clause of the decree quoted above, expressly reserving the right of Mabel or her new guardian to take appropriate proceedings against the estate of her father, or against his surety. This must have some meaning; and what meaning, is more likely or obvious than that indicated by the restriction of the discharge to' the acts of,Woodhull; in short, that the court was satisfied with his conduct, but did not think it proper to conclude the ward as to the acts of,the guardian by deciding that his handling of the securities was a matter for judicial approval and discharge.

We conclude, then, that the decree in question was no adjudication on the conduct of DeWitt O. Vanderbilt as guardian; and that it expressly reserved the right of the ward to attack the propriety of such conduct. Consequently, there could be no estoppel, except, perhaps, by laches, which does not appear in the case.

We see nothing in the claim that these stocks were bequeathed in specie by the mother’s will. The bequest was of “one-half of the balance of moneys, bonds and investment that I may die possessed of.” There is a similar bequest, to a son. of the other half. A bequest of all testator’s property of a certain kind is general. 18 Encycl. L. (2d ed.) 712, and cases cited. The rule is the same as to a certain proportion of such property, as half to one and half to another. Ib. Even if there be a bequest of a specified number of shares of a particular stock, this is held general unless other language of .the will shows an intent to make it specific. Blair v. Scribner, 67 N. J. Eq. 583. And this intent should clearly appear. Mecum v. Stoughton, 81 N. J. Eq. 319.

The decree of the prerogative court affirming that of the orphans court is in turn affirmed.

For affirmance — Ti-ie Outer-Justice, Sivayze, Trench ard, Parker, Minturn, Kallscii, Black, White, Herreniteimer, Williams, Taylor, Gardner — 12.

For reversal — Bergen—1. .


author: Bergen, J.

text:
    Louis G. Blume et al., complainants-appellants, v. Clara G. M. Blume, defendant-respondent.
    [Argued November 21st, 1918.
    Decided March 3d, 1919.]
    1. A mother executed a will by which she devised to her daughter a parcel of land, and a few days thereafter she conveyed to the same daughter another parcel of land which, except for the conveyance, would have fallen into the residue of the estate which she had devised to her other children.
    2. After the mother’s death some of the residuary legatees filed the bill in this cause praying that the conveyance be set aside, alleging as a reason that the mother was not mentally capable of understanding the effect of the conveyance, and that her daughter unduly influenced her, and by fraud induced her to make the deed. The great preponderance of testimony favors a finding that the mother was, when the deed was executed, a woman of more than ordinary strength of mind and in no way dominated by the daughter. — Held, that the fact that the daughter remained with the mother and eared for her during her declining years, was not alone sufficient to sustain a charge of fraud and undue influence, for there must be proof aside from this tending to show that the will of the daughter was dominating to some degree, particularly when the daughter did not solicit the conveyance and the testimony shows that the conveyance was made by the mother for reasons of her own after she had independent advice as to the nature and consequences of the conveyance from impartial and competent counsel, after a private confidential conference during which the matter was discussed.
    On appeal from the court of chancery.

      21 r. Ralph B. Lum, for the appellants.

      Mr. Clarence B. Case, for the respondent.
   The opinion of the court was delivered by

Bergen, J.

Johanna Giebelhause departed this life February 25th, 1918, leaving her surviving eight children and two grandchildren, the children of a deceased son, all the children being her issue by a former husband, Augustus Blume, she having had no children by her second husband, from whom she inherited a considerable estate which she greatly increased by her prudent management, so that at the time of her death it amounted to about $272,000.

She left a will dated January 30th, 1918, by which she gave to each of her living children $4,000, and to the children of any deceased child as a class, a like sum, payable to the grandchildren ten years after her death; she also devised certain real- estate to her daughter Hermine for life, with remainder to her children, and a parcel of real estate absolutely to her daughter Clara, and another to her daughter Clara and her son Ferdinand as tenant's in common, the latter gift being, as the testator declared in her will, according to the desire of her deceased husband, George Giebelhause, from whom she had received, the property.

She then devised all the residue of her property in trust to be divided into six equal parts and distributed among her sons and grandchildren, the latter to take per stirpes, excluding her two daughters Clara and Hermine from any participation in the residue.

After this will was executed and on the 13th clay of February, 1918, the mother by deed, dated that day, conveyed in fee-simple to her daughter Clara a house and some land located in the city of Plainfield. The consideration stated was $1 and faithful services rendered by the daughter to the testatrix. The deed, among other things, contained this recital:

“This deed does not in any way limit or affect any bequest or devise to the party of the second part herein named in my will or in any will to be hereafter made by me.”

Tlie bill in this cause was bled by three of the children, and two grandchildren of the testatrix, praying that the deed to Clara be set aside and that Clara he required to convey to each of the three brothers, .complainants, an undivided one-eighth interest in said lands, and to each of the grandchildren an undivided one-sixteenth interest therein, for the reason, as charged in the bill of complaint, that the mother, because of a long and serious illness and advanced years, was not in possession of sufficient mental power to understand and appreciate the nature of the conveyance to her daughter Clara, and that the latter, taking-advantage of her mother’s enfeebled mental and physical condition, secured from her the conveyance of the property described in the deed by fraud, circumvention and undue influence.

The vice-chancellor who heard the case dismissed tlie bill of complaint and the complainants have appealed.

We think that the evidence in the case fully justifies the finding of the vice-chancellor that the testatrix was a woman of unusual mental capacity, and that to the very "day of her death she dominated her property and the actions and conduct of her daughter Clara, and that there was no sufficient proof that she was unduly influenced by her daughter, or that her strong will was ever controlled or improperly influenced by Clara, the grantee. The evidence shows that the value of the land conveyed did not exceed $30,000, some of the witnesses estimating it to be not more than $16,000; that all of the children except Clara bad left home, and that she alone remained with her mother, taking care of her and performing the necessary work about the house, clearing the sidewalk of snow when required, and doing all the menial services necessary for carrying on the household although, apparently, tlie mother was amply able to employ servants to do it, but did not because of her thrifty disposition.

In support of this appeal the appellant urges that the evidence shows that the daughter unduly influenced the mother to make the deed, and that it was made without the advice of counsel. Neither proposition is sustained by the testimony which shows that the deed was made by the mother without solicitation or suggestion by the daughter; that the grantor was a woman of strong mind and forceful mentality when the deed was made, and the gift was not so large a proportion of her estate as to indicate any undue influence, and that the wish of the testator .to further compensate her daughter was not unreasonable. It also apjiears that before the deed was made the mother consulted her attorney, not as to the propriety of the gift, for of that she seems to have been clear, but of her legal right to prefer this (laughter to the extent of the property to be conveyed beyond the estate given in the will. Nor is it tine as the appellant urges, that the grantor did not have independent advice, for the testimony of her counsel shows that she was informed what the legal effect of the deed was, and that the advice was privately and confidential!}’’ given, by impartial counsel'not interested iii the donee.

As was said by Mr. Justice Trenchard, speaking for this court in Soper v. Cisco, 85 N. J. Eq. 165: “Proper independent advice in this connection, means that the donor had the preliminary benefit of conferring fully and privately upon the subject of his intended gift, with a person who was not only competent to inform him correctly of its legal effect, but who was, furthermore, so disassociated from the interests of the donee as to be in a position to advise with the donor impartially and confidentially as to the consequences to himself of his piroposed benefaction.”

The counsel who gave the advice in this case was one who fell within the lines of the foregoing description.

The evidence in the case fully satisfies us that there was no fraud, or undue influence exercised by Clara, the defendant, and that the grantor had all the independent advice that the rule of law requires.

The decree appealed from will be affirmed, with costs.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisoi-i, Black, White, HepPENTIEIMER, WILLIAMS, TAYLOR, GARDNER — 13.

For reversal — None.


author: Minturn, J.

text:
    Herbert B. Rundale, complainant-respondent, v. Minne A. Hill and Edith Bellwood, defendants-appellants.
    [Argued November term, 1918.
    Decided November term, 1918.]
    Chapter 154, P. L. 1916, provides a method of abating a public nuisance in., a summary manner, in the court of chancery, involving, inter alia, the sale of the premises in which the disorderly house is located, regardless of the knowledge of the owner, as to the disorderly conduct of the inmates. It was necessary to prove ownership of the premises in one of the defendants, and one of the complainant’s solicitors testified that he had searched the' records and found title in the alleged owner. — Held, not the best evidence and that the property in question could not be appropriated and placed in custodia legis, without" proper legal, proof of its ownership. — Held, also, that a defendant joining in a petition of appeal, without giving notice of appeal, was coram non judice.

      Messrs. Endicott & Endicott, for the respondent.

      Mr. Ulysses Q. Styron and Mr. Clifton C. Shinn, for the appellants.
   The .opinion of the court was delivered by

Minturn, J.

Based upon the act approved March 17th, 1916 (P. L. 1916, ch. 154.) .entitled

“An act declaring all buildings and places wherein or upon which acts of lewdness, assignation or prostitution are permitted to occur to be nuisances, and providing for the abatement thereof by the court of chancery,”

the complainant, a resident of Atlantic City, filed his bill alleging, inter alia,, the statutory delinquencies against the moral order in the premises No. 131 North Carolina avenue, in that city, of which Minnie A. Hill was alleged to ho owner, and Edith Bellwood, tenant.

The learned vice-chancellor ordered the issuance of a temporary injunction. The legal character and constitutionality of this procedure presents the subject-matter of the controversy. To comprehend this contention it is necessary to remark that the effect of the restraining order under the provisions of the act is to cause the locus in quo, regardless of the owner’s knowledge of the situation, to be placed in custodia legis, until the termination of the suit, and finally to be publicly sold should the exigencies of the situation require it.

The scheme of this procedure akin entirely to the procedure peculiar to the admiralty jurisdiction, or proceedings in rem, in which the tenant in legislative contemplation occupies the status of the master of a vessel, is attacked in limine as unconstitutional, as violative of the common law right of the owner of the locus, to be tried and heard before he and his property shall be condemned, in a quasi criminal proceeding in an equity forum which since its origin might abate a nuisance, but which was never conceded the common law jurisdiction inherent in and peculiar to the king’s bench in England, and its constitutional successor in this state.

Flanigan v. Guggenheim Co., 63 N. J. Law 647.

While the statute in question is exceptional and unique in its scheme of jurisdiction and procedure, and fruitful of provisions lending scope to generous forensic debate, we do not find it necessary in view of the manner in which the case comes before us to pass upon the mooted question of its constitutionality or to say more than that we perceive no testimony, except essentially of a hearsay character, upon which the order against the defendant Hill is based. Mr. Endicott, Jr.,. alone attempted to supply the essential testimony as to ownership by submitting his views upon a search of the title, but this testimony, unsupplemented by the records upon which it was based or properly authenticated copies of them, is of a hearsay character and presents no substantial legal basis for a judgment of any character, much less one that in its novel operation appropriates the' property of a defendant and places it for a year in custodia login and ultimately, if the exigency should require it, sells it according to the common law procedure on execution.

1 Greenl. Ev. 99; Lomerson v. Hoffman, 24 N. J. Law. 674; R. C. L. 57 and cases.

As to tlie defendant Hill, therefore, the order is without legal evidence to support it, and must be set aside.

The case of Bellwood, the tenant, we do not regard as legally before us. While she joins in the petition of appeal with her co-defendant, Hill, she gave no notice of appeal as required by the statute and rules, and her case therefore being coram non jtidice must be dismissed.

For affirmance — Black, White, Williams, Gardner — i.

For reversal — This Ciiiee-Just ice, Swayze, TiiENcriARD, Parker, Bergen, Minturn, Kalisch, IIeppeniieimer, Taylor — 9.


author: Kalisch, J.

text:
    Commercial Trust Company of New Jersey, trustee, &c., complainant-respondent, v. Albert T. Drayton, trustee in bankruptcy of L. Wertheim Coal and Coke Company, defendant-appellant, East Boston Coal Company, William T. Payne, Mill Creek Coal Company, Warren Delano, William L. Dann and William Neugass and Bertha Isenstein, executors of Max Isenstein, defendants-respondents.
    [Submitted June term, 1918.
    Decided November term, 1918.]
    1. Where a trustee in bankruptcy voluntarily submits himself to the jurisdiction of a state court having jurisdiction over the subject-matter of the controversy, he. becomes bound by the adjudication of that court. The state court has full power to enforce its decrees in that respect.

      2. Where such trustee receives moneys from receivers of the bankrupt. he must account for all of said moneys that were the proceeds of the collection of outstanding accounts and bills receivable covered by the chattel mortgage the validity of which was sustained in the state court.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lewis, reported in 88 N. J. Eq. 143.

      Messrs. McDermott £ Enright, for the appellant.

      Messis. Fisk £ Fisk, for the complainant-respondent.

      Messrs, llartshorne, Insley £ Leake, for William "T. Payne and East Boston Coal Company.

      Messrs. Yredenbnrgh, Wall £ Carey, for Warren Delano and Mill Creek Company.

      Mr. Pierre P. Garren, for the executors of Max Isenstein.
   The opinion of the court was delivered by

Kalisch, J.

This matter comes before us on an appeal taken by the trustee in bankruptcy of L. Wertlieim Coal and Coke Company, a bankrupt debtor, from the decree of the court of chancery sustaining the validity of a certain chattel mortgage given by the bankrupt debtor to the Commercial Trust Company of New Jersey.

'The appellant attacked the validity of the mortgage, in the court below, principally upon the grounds — first, that the court erroneously found that the bankrupt debtor was solvent at the time of the execution of the mortgage; secondly, that the affidavit to the mortgage stated the true consideration thereof; thirdly, that the mortgage covered the outstanding accounts acquired in the usual course of business subsequent to the mortgage.

The facts which are made the basis of the findings above mentioned are fully stated in a memorandum and in an opinion of the vice-chancellor. We concur in the result reached by him.

The court in the final decree ordered “that the defendant, Albert I. Drayton, trustee in bankruptcy of L. Wertheim Coal and Coke Companj'-, forthwith account in this cause for all moneys in his possession or received by him from the collection of outstanding accounts and bills receivable due L. Wertheim Coal and Coke Company, or received by him from the receivers in bankruptcy of L. Wertheim Coal and Coke Company, and that Albert I. Drayton, trastee as aforesaid, after the allowance of said account, pay the amount shown thereby to the complainant or its solicitors, to be applied as provided in complainant’s mortgage or deed of trust.”

Enough has been quoted from the decree to illustrate the point made here by counsel of appellant, which is, that the provision in the decree requiring the bankruptcy trustee to account in the court of chancery for bankrupt assets which have lawfully come into his hands is erroneous.

The argument advanced by counsel of appellant in support of this point is substantially as follows: That although the court of chancery in this foreclosure action may conclude the trustee as to any res within its jurisdiction, nevertheless, as the decree is not only in rein, but is also in personam against the bankrupt trastee requiring him to account in the court of chancery “for' all moneys in his possession” or received by him from the collection of outstanding.accounts and bills receivable due (the bankrupt) or received by him from the receivers in bankruptcy of (the bankrupt), the decree virtually excludes the bankruptcy court from further jurisdiction over its own trustee with respect 'to his account of bankrupt assets received by him under the decree of the bankruptcy court..

And counsel add to this the assertion that there is nothing in the case to show the source of the moneys received, by the trustee from the receiver in bankruptcy, and that, in fact, a considerable part thereof was received from an ancillary receiver appointed by the bankruptcy court in New York, and is the re-suit of the sale of the Harlem yard, in New York, with respect to which the mortgage cannot possibly be a lien, because it was never filed or recorded in the State of New York.

The fallacy of this argument lies, first, in the wrongful assumption by counsel that the court of chancery by its decree ousts the bankruptcy court of further jurisdiction over its own trustee, respecting the assets of the bankrupt received by the trustee. But this is clearly not so. The bankruptcy court still retains jurisdiction over its own trustee in regard to such assets of the bankrupt, as were not covered by the lien of the mortgage, and which, therefore, are still subject to be administered in the bankruptcy court and distributable among the general creditors of the bankrupt. But the situation here is that complainant filed its bill to foreclose a chattel mortgage, in tile state court, which mortgage covered accounts owing and in the future accruing to the bankrupt, before the filing of the petition in bankruptcy, and the trustee in bankruptcy, voluntarily appeared in the cause, and not only filed his answer to tire bill, but, by way of cross-bill, sought 'affirmative relief from the court.

The trustee had full authority to submit himself to the jurisdiction of the court of chancery.

Where a trustee in bankruptcy voluntarily submits himself and his rights to the jurisdiction of a state court having jurisdiction of the subject-matter of the controversy, he becomes bound by the adjudication, whether or not the decision of the state court is favorable or unfavorable to him. In re Reynolds, 133 Fed. Rep. 585 (at p. 587); Mays v. Fritton, 20 Wall, 414; 87 U. S. (L. ed.) 389.

The trustee is, therefore, in no position to lawfully avoid the enforcement of the decree to account for all moneys received by him resulting from the collection of accounts due the bankrupt debtor, wheresoever the same may have been collected, for it appears that these accounts were properly adjudicated by the court to be within the lien of the mortgage.

That the state court has full power to enforce its decree in this respect is too obvious to warrant any further discussion. Scott v. Georges Creek Coal Co., 202 Fed. Rep. 251.

Secondly, the assertion by' counsel of complainant in their brief that a considerable part of the moneys received by the trustee was received from an ancillary receiver, appointed in the State of New York, and is the result of the sale of the Harlem yard, in New York, and was not included within the lien of the ihortgage, is not borne out by the testimony submitted in the cause. The testimony of the trustee on that point is, that he received from Mr. Perry, an ancillary receiver, of New York, $18,879.56, being a special account of collections made by him in New York.

Since there is no proof that this sum was wholly derived from the collection of outstanding accounts and bills receivable due the bankrupt debtor and within the lien of the mortgage, we, therefore, think that the decree is too broad in directing the trustee to account for all moneys received by him from the receivers in bankruptcy of the bankrupt, and should be limited to direct an accounting by the trustee for all moneys received from the' receivers in bankruptcy, which are the proceeds of the collection of outstanding accounts and bills receivable, or of property otherwise, within the lien of the mortgage; and for this reason the decree must be modified in the respect indicated.

With this modification the decree is affirmed, with costs.

For affirmance — None.

For reversal — Black, Taylor — 8.

For modification — The Chief-Justice, Swayze, Trek-chard, Parker, Bergek, Mikturk, Kaliscii, White, Heppek-HEI3MER, Williams — 10.


author: Per Curiam.

text:
    Bertha Wilentz, complainant-appellant, v. Morris Mechanik and Jennie Mechanik, defendants-respondents.
    [Submitted November term, 1918.
    Decided March 3d, 1919.]
    On appeal from the court of chancery.

      Mr. Elias A. Kanter, for the appellant,
    il/r. Henry K. Qolenboch, for the respondents.
   Per Curiam.

The bill in this case was filed to compel the specific performance of a written contract dated November 27th, 1916; 'The premises in the contract agreed to be conveyed are lots seventeen (17) to twenty (20) on “map of property belonging tó Joseph Gadek, situate in the city of Perth Amboy, BT. J.”

After a bearing the vice-chancellor decreed specific performance of the contract, including as part of the consideration a mortgage to be given by the complainant to the defendants, which should be in due legal form; “due form”'being the wording of the contract. Thereafter on the 27th day of BTovember, 1917, a reference was made to one of the special masters to settle and determine certain enumerated issues, in accordance with the decree in the cause made.

Accordingly, a report was made by the master to the court on the 21th day of April, 1918, which was confirmed on the 9th day of July, 1918. Subsequently, an amended decree was made on the 29th day of July, 1918, in-which, it is decreed, that the complainant is to execute and deliver to the defendants, a purchase-money bond and mortgage; “that said mortgage shall contain the usual insurance, standard mortgage clause, and is also to contain the usual interest and tax default clauses for sixty days, such clauses to have effect only after July 30th, 1918.” From this amended decree the complainant appeals, in which she alleges eight specific grounds of appeal; number five attacks specifically the clause above referred to, in reference to the insurance and tax clauses, to be inserted in the mortgage, as not warranted by the terms of the contract. As stated, the contract requires the mortgage to be in “due form” so, strictly speaking, there is nothing in the contract which requires the complainant fco include in the mortgage any agreement to keep the property insured or to mature the mortgage upon default of interest for sixty (60) days; to tins extent we think the learned vice-chancellor undertook to make a contract for the parties, perhaps an oversight. The decree should be modified to the extent of eliminating this requirement; in all other respects the decree should be affirmed; perhaps, we should say, that the contract does not provide for the payment of taxes, but this part of the decree was necessary, in order to satisfy the equities between the parties, growing out of the accounting. We think there is no legal merit in the other grounds of appeal.

The decree is affirmed, with the above-stated modification.

For affirmance — None.

For reversal — None.

For modification — The Ci-iiee-Justice, Swayze, Trenciiard, Parker, Bergen, Minturn, Kalisoh, Black, White, ITereeni-ieimbr, Williams, Taylor, Gardner — 13.


text:
    International Radio Telegraph Company, respondent, v. Marconi Wireless Telegraph Company of America, appellant.
    [Decided February 6th, 1919.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lane, whose opinion is reported in 89 N. J. Eq. 319.

      Messrs. Lindabury, Dcpue & Faulks, for the respondent.

      Messrs. Griggs é Ilard.vng, for the appellant.
   Per Curiam.

The decree appealed from will be affirmed,. for the reasons stated in the opinion filed in the court below by Vice-Chancellor Lane.

For affirmance — Tile Chief-Justice, Svyayze, Trencilard, Parker, Bergen, Minturn, Kalisch, Black, White, HepPENHEIMER, WILLIAMS, GARDNER — 12.

For reversal — None.


text:
    Richard A. Motley, appellant, v. Henry I. Darling et al., respondents.
    [Decided February 6th, 1919.]
    On appeal from a Recree of tlie court of chanbery advised by Vice-Chancellor Lewis, whose opinion is reported in 88 N. J. Eq. 487.

      Mr. Joseph Anderson, Sr., for the appellant.

      Mr. Charles E. Simpson, for the respondents.
   Per Curiam.

The decree appealed from' will be affirmed, for the reasons stated in.the opinion filed in the court below by Vice-Chancellor Lewis.

For affirmance — The Chief-Justice, Swayze, Teenciiard, Parker, Bergen, Mintuhn, Kaliscit, Black, White, IIep-PENHEIMER, WILLIAMS, GARDNER-12.

For reversal — None.


text:
    Postal Telegraph Cable Company of New Jersey, appellant, v. The Delaware, Lackawanna and Western Railroad Company et al., respondents.
    [Decided February 6th, 1919.]
    On appeal from a decree of the court of chancery advised hy Vice-Chancellor Griffin, whose opinion is reported in 88 N. J. Eq. 99.

      Messrs. Yredanburgh, Wall & Garay, for the appellant.

      Mr. Waller J. Larrabee, il/»\ Frederick W. Van Blarcom and Mr. William B. Qourlay, for the respondents.
   Per Curiam.

The decree appealed from will he affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Griffin.

For affirmance — Ti-ie Chief-Justice, Swayze, Tebnchard, Parker, Bergen, Minturn, Iyalisch, Black, White, Heppeniieimbr, Williams, Gardner — 12.

For reversal — None.


text:
    Jesse W. Fenton, appellant, v. William S. Crook et al., respondents.
    [Decided February 6th, 1919.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevens, whose opinion is reported in 88 N. J. Eq. 432.

      Mr. Samuel Roessler, for the appellant.

      Messrs. Codington & Blalz, for the respondents.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Stevens. ,

For affirmance — Ti-ie Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisci-i, Black, White, PIerpeniieimer, Williams, Gardner — 12.

For reversal — None.


text:
    Edward S. Atwater, Jr., respondent, v. Marwood R. Baskerville and another, appellants.
    [Argued November 29th, 1918.
    Decided March 3d, 1919.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lane, whose opinion is reported in 88 N. J. Eq. 121.

      Mr. Foster M. Voorhees (Mr. Francis A. Gordon on the brief), for the complainant.

      Mr. Alram II. Cornish (Mr. Claris McE. Whitlemore on the brief), for the defendants.
   Per Curiam.

The order appealed from is affirmed. The opinion of the vice-chancellor sufficiently vindicates his result. We have only to add that McDermott v. Woodhouse did not hold anything to the contrary. It expressly recognized the power of our courts to gather in, and control the disposition of, the assets of a foreign corporation found within this state. Irwin v. Granite State Provident Association, 56 N. J. Eq. 244 It happened in the last-cited case that there was also a domiciliary receiver, but, obviously, that was not a condition precedent to the appointment of a receiver in this state to secure or preserve the assets.

The order’ is affirmed, with costs.

For affirmance — The Ciiiee-Justice, Swayze, Tkehchard, Parker, Bergex, Mixturx, Kalisch, Black, White, Hep- ‘ pexheimer, Williams, Taylor — 12.

For reversal — None.


text:
    In the matter of the commissions to be allowed to the guardians of Ruth Joyce Cook et al., minors.
    [Decided February 6th, 1919.]
    On appeal from a decree of the prerogative court advised by Vice-Ordinary Backes, who filed the following opinion:
    Eour of the minor children of Edmund D. Cook, deceased, Eutli, Edmund, George and Margaret, each received from their father’s estate $109,510.30. Their mother, Margaret P. Cook, George E. Cook and Henry Palmer were appointed their guardians in April, 1911. In December, 1912, George E. Cook resigned, waiving compensation, and received his discharge. The two remaining guardians were continued under a new order of appointment, and in September, 1917, Mr. Palmer applied for and received his discharge. The orphans court allowed compensation to the guardians for their care of the corpus, as against the respective estates, the following sums: Euth, $2,899.61; Edmund, $2,340.02; George,' $2,059.23, and Margaret, $1,-885.21, aggregating $9,184.07. Of these allowances Mr. Palmer was awarded three-fifths, $5,510.42, he having been the active guardian in the management of the funds. An allowance of $300 against each of the estates was also made to counsel.
    The only question to be dealt with is whether the allowances are excessive. The division of the állowances to the guardians is not involved. The allowances to counsel are not seriously assailed. They are at the rate of less than $50 a year against each estate. These sums are, indeed, modest for the character of legal services rendered, taking into consideration the high standing of counsel, and so much of the appeal as concerns that feature of the case is dismissed with the further comment that the allowances are beyond fair criticism.
    The allowance made to Mrs. Hewitt (formerly- Mrs. Cook) lias not been the subject of discussion. While.the appeal attacks the allowances as a whole, the contest is centered upon so -much thereof apportioned to Mr. Palmer, Mrs. Hewitt prosecuting in her capacity as remaining guardian. The remuneration allowed to Mr. Palmer for his six and one-half years’ of service is very moderate, and this can be better ’appreciated by dividing the total into the number of years of service.- Eor his care and watchfulness and prudent management of nearly a half a million dollars, his annual compensation is less than nine hundred dollars. It would seem to me that the mere responsibility of so large a fortune justifies this amount of remuneration. I doubt very much if in a private undertaking a person of Mr. Palmer’s qualifications could lie secured to assume, merely, the risk at this small fee. Of course, at common law, trustees served gratuitously, hut a different policy now prevails, and, under the provisions of the Orphans Court act, guardians are allowed commissions not to exceed five per cent, of the estate-, and in fixing the compensation the court, within the limitation, is required to measure it by the “actual pains, trouble and ri-sk of such accountant.” When therefore we look at the actual pains and trouble, in addition to the risk, Mr. Palmer had, as disclosed by the evidence, and from it it appears that the burden of the management of .the funds was carried by him, no one, moved by a sense of fair play and justice, could say that the allowances axe out of proportion to his pains, trouble and risk. I venture to observe that in the court of chancery where we are frequently called upon to fix fees of receivers of insolvent corporations, and where there is no statutory limitation, an allowance for the conservation of such a hugh estáte would exceed considerably the sums given here, and properly so. The amounts fixed by the orphans court are within the statutory limitations, are fully justified by the nature of the services rendered, and, so far as the estates are concerned, are reasonable and are approved.
    The thing that gives ground for criticism and probably provoked this appeal is the inequality of the allowances made against the several estates. The funds were managed as a unit, as they came to the wards from their father, to which were added, considerably, from income in excess of what, was needed for the maintenance of the children. The same scrupulous care and attention was given to each and for the same length of time, and the question, naturally enough asked, is, If the statutory basis of compensation is actual pains, trouble and risk of the guardians, why should Ruth’s estate be called upon to pay a larger sum than the others, and why should Edmund’s be greater than George’s, and George’s exceed that of Margaret’s ? At first blush this taxation would seem to be unjust and it would appear that the court below fell into grievous error in its method. But the court had this situation to deal with. Euth’s estate had another year, to run, Edmund’s six years, George’s seven, and Margaret’s twelve. Euth’s estate, the administration of which was about ended, was taxed at the rate of three per cent, commission; those of Edmund and George at four and Margaret’s at five per cent., and at these rates the commissions were allowed in proportion as the period of service rendered by the guardians bore to the term to be administered, blow, while the court, obviously esteemed the services, rendered to Euth’s estate to be fairly worth the sum of three per cent, minus, and that the guardians had earned no less from the other estates, provision had to be made for the compensation of those who, were to administer the unexpired terms and, with the capital for this purpose restricted by the statutory five per cent., the appraisal had to be subordinated to apportionment. Although the imposition on the several estates does not result-in an exact equality of charge, the highest is not excessive and the appellant-guardian is not aggrieved.
    The appeal will be dismissed, with costs. .

      Mr. William B. Qourley and Mr. Union Saiterihimiie, for the appellants.

      Mr. Frank S. Kalzenbach, for the respondent.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Ordinary Baches.

For affirmance — The Chief-Justice, Swayzb, Teehcitabd, Paekeb, Bebgen, Mintuew, Kalisch, Black, White, I-Iep-PEYHEIMMB, WILLIAMS, GABDHEE-12.

For reversal — None.


text:
    Edward Blau, appellant, v. Public Service Tire and Rubber Company et al., respondents.
    [Decided February 6th, 1919.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevens, who filed the following opinion:
    “This is a suit to rescind a release given by complainant to the defendant company. The relief is prayed in aid of an action at law.
    “The officers of the company, so the bill charges, agreed to and with complainant that if he would procure a person who was ready, willing and able to invest approximately $50,000 as additional capital, the company would pay him $5,000 for bis services, he immediately to subscribe this sum to. the company’s stock.
    “It is said that one Kritzman was, through the efforts of complainant, ready and willing to make the investment. It is admitted that he did not do so, but, on the contrary, invested the money in a New York corporation, which he organized under a similar name, and it is said that he was instigated thereto by the-Eisenbergs, who were the defendantls sole stockholders, with a view to cheating complainant out of his commissions.
    “Whethefr the company could beheld responsible .¡for the alleged fraud of the Eisenbergs I shall not consider. It being admitted that Kritzman declined to invest his money in the company’s stock, the right to the commission .did not arise unless the company as such made itself liable in some other way.
    “The correspondence shows that in an early stage of the negotiations, conducted through November, 1916, there arose, for some reason or other, a disagreement between Wallant, Kritzman’s agent, and the Eisenbergs. Kritzman may have been averse to putting his money into the New Jersey company, because, being resident in New York, he, for some reason or other, preferred a New York corporation, or because he did not care, directly or indirectly, to contribute toward Blau’s' commission, as he would have done whether that commission took the form of money paid out of the company’s treasury or whether it took the form of a stock issue. If I assume that Kritzman’s sole objection was the commission, that would not help complainant. He was free to decline on that or any other ground. The argument is that the Eisenbergs repented of their agreement to pay the commission and persuaded Kritzman to organize a similar corporation in New York. But there is not a particle of evidence that they did so. Neither Kritzman nor Wallant were sworn, and the Eisenbergs deny it. Appeal is made to the sequence of events. This is persuasive on the point that the Eisenbergs were disingenuous, in that they did not inform complainant of what was going on, hut it does not prove that Kritzman was willing to invest in the Now Jersey company and that he was dissuaded from so doing by the Eisenbergs. The letters that passed between the parties, beginning with complainant’s letter of November 8th, show that even at that stage of the negotiations the formation of a New York company was in contemplation.
    • “On November 18th, the day when the New York company was incorporated, Henry Eisenberg, without referring to' what was being done, if he knew, wrote that all negotiations with reference io interesting capital in the New Jersey company were at an end. Thereupon complainant, on November 20th, sent in a bill for $250 for liis services. He accepted in lieu of that sum $100 in cash and two tires, and signed the release.
    “The rule is that A court of equity will rescind a transaction entered into upon the -faith -of a material representation false, in'fact, if the person to whom it was made relied upon it and in consequence suffered injury.’ Eibel v. Von Fell, 55 N. J. Eq. 670. Blau says that the Eisenbergs stated in-conversation that they wanted nothing to do with Wallant and had a relative who would lend them a smaller sum of money. The Eisenbergs deny making such a statement. If they made it, it would not alter the fact that the commission had not been earned, and it would not make the service, for which Blau was paid, more valuable. As the false statement must result in injury in. order to be the ground' of rescission, complainant is not entitled to relief. He does not show that, if made it injured him. If there had been conflicting evidence on the question whether Kritzman was ready and willing to invest, the case would have been somewhat different. The question would have arisen whether this court should pass upon the evidence, or whether it should put the case in shape for a jury to pass upon it.”

      Mfixxrx. SHein, Stein '& Jfannoch, for the appellant.

      Messrs. Rileer & Ttiker, for the respondents.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chanceh lor Stevens.

For affirmance — Tun Chief-Justice, Swayze, Teen-chare, Parker, Bercen, Minturn, Kaltsci-i, Black, Williams, Gardner — 10.

For reversal — None.


text:
    Newark Brass Plate and Engraving Company et al., appellants, v. The Citizens National Bank of Netcong, respondent.
    [Decided February 6th, 1919.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevens, who filed the following opinion:
    “This is a bill to set aside a settlement because induced by fraudulent representation.
    “In 1913 two coi-porations — the Newark Brass Plate and Engraving Company and the James N. Morehouse Company — were doing business in Newark under the management and control of one Van Sickle. They owed the complainant, bank, $9,300 on a judgment recovered by it. The bank held stock of these corporations as collateral and had, in December, 1913, issued execution and made a levy upon their tangible property. While matters stood thus, the defendant Umbehend bought at private sale both the stock and the property. On December 31st, 1913, he entered into a formal agreement of purchase in which thé bank and Van Sickle joined. One of the terms of the agreement was that the respective companies were each to give the bank a note for $3,250 endorsed by Umbehend. The notes were payable three months after date, and were to be continued by successive renewals for a period of one year; and if $4,200 should be paid in that year, they were to be considered fully satisfied.
    “After talcing over the conduct of the business, Umbehend borrowed money to increase the plants. On September 7th, 1914, a fire broke out in the building in which they were installed. The plant of the Brass Plate and Engraving Company was practically destroyed, and that of the Morehouse company seriously damaged. The insurance was adjusted in the case oí the former company at $5,64.2.36, and in the case of the latter at $2,666.18, and promptly paid.
    “On October 6th, 1914, TJmbehend wrote to the complainant bank in reference to the two notes which he had endorsed. Among other things, he said:
    “ ‘It is therefore my desire to adjust this obligation in an honorable way as possible rather than to place the concerns in bankruptcy, for I have never done a wrong to any one, and it is my purpose now to come out and place the conditions before you.
    “ ‘In the midst of these difficulties (referred to in a former part of this letter) a fire starting on September 7th on the third floor destroyed one of the portions of the Newark Brass Plate and Engraving Company on the fourth floor, and the portions not damaged by fire were more or less drenched with water. Several weeks were required for adjustment and finally the matter has been settled.
    “ ‘This building being considered a dangerous risk by insurance companies, it had been a very difficult thing to obtain insurance at any rate, and for this reason the insurance carried was very .small. TPe, therefore, settled the loss on the two companies for $1,050.’

    “Some correspondence followed the receipt of this letter. On October 27th TJmbehend went to Netcong and saw the president and vice-president of the bank, with the result that the bank agreed to surrender the two notes, amounting in the aggregate to $6,500, on payment of $1,000 in cash and on receipt of a note of TJmbehend (the companies not joining) for $2,400.
    “To the question ‘Why didn’t you put it in the letter that you had collected $8,000 insurance?’ TJmbehend replied:
    “ ‘Simply because from the dealings I had had with the bank out there, they acted as hungry wolves after me all the time, and if I had went out there and told them that I had gotten $8,000, they would have said — they would have grabbed on to the $6,250, and the other creditors could have went to the old Harry.’
    “According to his evidence these other creditors were principally a Newark trust company and his wife!
    “Not paying the new note the bank sued and took judgment on it. ' On supplementary proceedings the bank was' for the first time informed that the amount received from the insurance companies was $8,300 instead of $1,050.

      “When asked why he made the false representation, Umbeliend excused himself bj saying that $1,050 ,was the appraised value of the tangible property acquired as the result of his contract with the bank and Van Sickle. But even this explanation does not, on Ms own statement, accord with the fact, for he testifies that an appraiser, selected by him after he had taken over the property, had valued the tangible assets of the brass company at $680, and of the Morehouse company at $430, or $1,110 in all.
    “That the false' statement induced the settlement is conclusively proved. Being material, it avoids it and puts the bank back into the position in which it stood before it was made. The bank stands as the creditor of the respective companies on their notes.
    “The defendants raise various objections. First, they say that the complainant has not by its bill offered to return the $1,200 received. It is not very obvious why it should. Whether the companies be considered as indebted on their notes of $3,-250, or whether they be regarded as debtors under the new arrangement, they, or Umbehend for them, owed this money. In his letter of October 28th, written the day after settlement, Umbohend says: Tt is hereby agreed and accepted that the writer agrees to pay the sum of $3,400 for ihe two concerns! If he gave his personal note for $2,400, he did it therefore on their behalf. The $1,000 cash payment was unquestionably made in respect of ihe $6,500 indebtedness. The $2,400 note was given to satisfy what remained of it under the arrangement. Under these circumstances, it would be highly inequitable to compel the complainant to return any part of that which he was entitled to under either'arrangement.
    “The next point made by defendant’s counsel is that the complainant is not entitled to any relief against the two corporations. His insistence is that under the terms of the agreement of December 31st, 1913, the companies issued their notes for $3,250, each without consideration, and that therefore the new setllcm'ent, as far as they are concerned, has no legal basis on which to stand. It is enough to say.that the agreement, has stood.unchallenged for over four years and is not now .attacked in the pleadings. I may add that it is somewhat difficult to understand what counsel means when he saj's That the written evidence of the conference of October 27th shows the resale of the concerns to Umbehend.’ There was no resale; only a cutting down of the debt. He seems to base himself upon a misconception of the obvious meaning of the clause in Umbeliend’s letter of October 28th, in which he says The writer agrees to pay the sum of $3,400 for the two concerns.’ Evidently, the word Tor’ means 'on behalf of.’
    “Counsel’s next contention is that the misstatement did not injure the complainant. This may be best answered in the words of his client:
    " ‘If I had went out there and told them that I had gotten the $8,-000, they would have grabbed on to the $0,250, and the o*her creditors would have went to the old Harry.’
    “The last objection that requires notice is that the bill is multifarious, because filed (a) to set aside the settlement of October 27th; (5) to have a receiver appointed for the two corporations; (c) to have tire receiver recover from the American Art Metal Company the insurance money alleged to have been diverted to its use.
    “Undoubtedly, a bill combining these different objects would have been deemed multifarious under the former practice. The recent Chancery act has made the question largely one of convenience. There can be no question but that the settlement of October 27th should be decreed to be fraudulent. As the two concerns are so entirely within the control of one man; as they and their assets have, in all that has occurred within the last five years, been dealt with in the same way; as no useful purpose would be subserved by compelling the complainant to institute two new suits, one in the case of each company, for the appointment of a receiver, after the complainant has by decree been remitted to .his original right; and as, practicall]’, all of the evidence bearing on the subject of the companies insolvency has come from Umbehend himself, and as the companies have been dissolved by proclamation of the governor, I think it would be conducive to the speedy determination of the controversy, if the court now adjudged the companies insolvent and appointed (after hearing), a' receiver. I do not think the court can or ought to go any further. The receiver must determine, after proper inquiry, whether he has any cause of action, legal or equitable', against Elora Umbehend, trading as the American Art Metal Company, or against any one else, and whether, if he has, it is expedient to proceed further.”

      Messrs. Gongleton, Stailmcm £ Iloover, for the appellants.

      Messrs. King £ Yogi; for the respondent.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Stevens.

For affirmance — Ti-ie Chief-Justice, Swayze' Trenchard, Parker, .Bergbh, Mistturn, Kalisci-i, Black, White, IIeppehiieimer, Williams, Gardner — 12.

For reversal — None.