text:
    John C. Havens et al. v. The Seashore Land Company et al.
    [Filed November 2d, 1898.]
    1. Where a suit abates or becomes defective by the death of a party and is revived by his heirs, it is a continuance of the same suit, and both parties are entitled to the benefit of all former proceedings prior to the abatement.
    2. Where a suit abates or becomes defective by the death of a party and is revived by his heirs, they are not bound by proceedings taken after his death, prior to revival.
    3. One of the complainants in partition died, and without a revival by his heirs or a suggestion to the court of his death, evidence was taken and the suit brought to a final hearing, and the chancellor rendered an adverse decision without signing or advising a decree. — Held, that heirs of the deceased complainant, after an order of revivor under the statute (Gen. Stat. pp. 2, 3 § 5, tit. “Abatement”) and an amendment to the original bill, stating their succession, Could only show whether the new party has the representative character imputed to him, and could not introduce evidence to supplement complainants’ case.
    4. The surviving parties were bound by the decision on which a decree should be entered between them.

      5. Where a complainant in partition dies in the progress of the cause and his heirs secure a revival, his widow becomes one of the new complainants, although, as a wife, she was one of the original complainants.
    6. Where one of the complainants dies subsequent to a decision on a bill for partition, the decree should be dated as of the date of the argument.
    7. Where, on a bill for partition of two tracts of land, it appeared that all the complainants and defendants are interested in one of the tracts only, and that part of the complainants and defendants are interested in the other, as to the latter tract the bill will be dismissed, but, as to the complainants interested therein, without prejudice.
    8. On a bill for partition, if the legal title to the land is put at issue the court of chancery will not proceed to settle such title, but will either dismiss the bill or retain it, to allow the title to be settled in an action at law.
    Heard on bill, answer and cross-bill and proofs.
    This cause was originally heard by the late "Vice-Chancellor "Van Fleet on final hearing, and an opinion was filed by him directing the character of decree to be entered. The bill was filed for the partition of two tracts of land known as lots Nos. 4 and 5, in survey No. 6, on a partition map of “ Manasquan Beach,” in Monmouth county (now Ocean), made in partition proceedings taken in the year 1801, in the Monmouth county court of common pleas. In the bill, which was filed October 7th, 1887, the then complainants claimed to be the owners of the undivided half of both tracts, and alleged that the defendant the Seashore Land Company was the owner of an undivided fourth part of both tracts, and that certain other persons, made defendants, were together the owners of the other undivided fourth part of both tracts. The title of complainants, deduced originally from a survey of the proprietors in 1690, was spread out in the bill, including the deeds and other writings or records upon which it was founded. The defendant the Seashore Laud Company answered the bill, setting out, also, its title to the premises, including a deed from one John Curtis to Joseph Lawrence, dated May 31st, 1788, for the one-half of one-seventh part of Squan Beach, the property subsequently partitioned. This deed, if effective, conveyed the legal title to one-half of lots 4 and 5 and conveyed the one-half interest which complainants claimed. The land company, who claimed title to the other one-half interest from other sources, by their answer (filed March 26th, 1889) asserted exclusive legal title and ownership to both of the lots and denied to complainants or any of the defendants any title or interest in either of them. The defendants Walter N.. Marks and others filed an answer admitting, or not disputing, complainants’ title or their own as set out, and joined in a prayer for partition. On August 9th, 1889, John C. Havens, one of the complainants, died intestate, but although (as hereafter appears) his death was known to the solicitors of all the parties, no application to revive the suit, or to be made parties, was made in behalf of his heirs, and the suit was brought to final hearing before Vice-Chancellor Van Fleet without (so far as appears by the record) any suggestion to the court of the death of John C. Havens, or that the suit was defective in parties for this reason. The proceedings in the cause subsequent to the death of John C. Havens were as follows: Evidence was taken by complainants before a master on September 28th, 1889, in the presence of solicitors for all parties, and Edwin H. Havens, a son of John C. Havens, then testified that his father, John C. Havens, died in August, 1889, and the names of his widow and heirs-at-law were given by this witness. On October 26th, 1889, complainants continued their evidence in the absence of counsel for the land company, and on February 8th, 1890, the witnesses then examined were produced and cross-examined. On February 11th, 1890, complainants filed replications by consent. On February 10th, 1890, complainants took an order on the land company, to close their testimony in sixty days, which time for proofs was on April 21st, 1890, and, on notice and defendants’ motion, extended to thirty days from the latter date. Defendant’s testimony was taken on May 17th and May 20th, 1890, and on the latter date the cause, on complainants’ motion, was referred to Vice-Chancellor Van Fleet for hearing and advising decree. On May 23d, 1890, complainants suggested on record the marriage of one of the female defendants, and took an order continuing the proceedings against her by her married name. On May 20th, 1890, an order for leave to file amended answer with cross-bill was made, which answer was filed on the same day. On June 21st, 1890, the complainants’ replication to the amended answer was filed, and on June 25th, 1890, an order was made that the testimony taken May 20th, 1890, by defendants should stand as if taken under the amended answer and cross-bill. The cause was subsequently heard and the opinion of the vice-chancellor was filed October 21st, 1890. As appears from this opinion the only dispute between the complainants and the land company related to the title of the land company to the undivided half interest in one of the tracts (No. 4), which interest was claimed under the deed of May 31st, 1788, from John Curtis to Joseph Lawrence, above referred to. The entire dispute between the parties, in the language of the vice-chancellor, “centres in this deed. If it passed the land in controversy the defendants will be entitled to prevail, if it did not the complainants will be entitled to the decree they ask.”' The deed was attacked by complainants, both as to its effect and as to the proof of the deed; the decision of the vice-chancellor was in favor of the defendants on both points, and as to the land in dispute (tract No. 4) the direction of the opinion is that the complainants’ bill must be dismissed. No decree, however, was, in fact, signed or advised by the vice-chancellor. On April 11th, 1892, the death of John C. Havens, one of the original complainants, was for the first time suggested, on the record, as having occurred on August 6th, 1889, and was proved by the affidavit of his son, Edwin H. Havens, who had, as above stated, been examined on that point by the complainants, in September, 1889. No statement was made in the affidavit as to the proceedings in the cause since the death of John C. Havens, and an ex parte order of revivor under the statute (Abatement § 5) was made on April llt-h, 1892, and Margaret A. Havens'and others were directed to be inserted as complainants in the suit, as becoming parties in interest in the right of John C. Havens, deceased.
    The order further directed that these substituted complainants, who appeared by new counsel, might, in the language of the Abatement act (Gen. Stat. pp. 2, 3 § 5), “make such amendment in the bill of complaint as their title or interest therein may require.” The order further directed that the defendants should answer the amendments within thirty days, and that thereupon the suit proceed to issue and examination of witnesses and production of proofs, and that all other proceedings be had therein as in ordinary cases. This amendment of the.bill was made by the substituted complainants on April 12th, 1892, the only amendments being (1) the erasure of the name of John C. Havens as complainant and the insertion of the substituted complainants in lieu thereof, and (2) the addition of a paragraph alleging the death of John C. Havens, intestate, on August 9th, 1889, leaving the substituted complainants as his heirs-at-law, and that his interest in the land descended to them, subject to the dower of his widow, who was already a complainant as his wife. The order and amendments were served on the solicitors of the defendants (the original complainants not being served), and the Seashore Land Company answered the amendments, stating that it had no knowledge concerning the allegations contained in the amendments, and further claiming that the substituted complainants knew of the death of John C. Havens at the time and of the pendency of the suit and its objects, and allowed the cause to go to hearing and submission without notifying defendants of their rights, and that after the delay and expense it was inequitable that these complainants should further prosecute the suit. Testimony was taken by the new complainants on November 1st, 1894, after objection by defendants’ solicitor. This evidence related not to the new complainants’ succession to the title or interest of John C. Havens, but to the possession of the premises sought to be partitioned, and was objected to by defendants’ counsel, who gave notice of motion to strike out. The cause was subsequently, and after the death of Vice-Chancellor Van Fleet, referred to me for hearing, on the application of the new complainants, and, upon the notice to the surviving original complainants and to the defendants, the cause was brought on for final hearing before me by the new complainants. The land company and the new complainants are the only parties appearing upon the hearing, the original complainants not appearing. At the hearing the following stipulation, dated July 31st, 1895, and signed by the solicitors of the new complainants and of the answering defendants, was filed: “It is hereby stipulated that the testimony heretofore taken in the cause shall stand as valid, although taken after the death of some of the parties.” At the hearing before me one witnesfe only, Edwin H. Havens, was called to prove the death of John C. Havens and the succession to his interest of the new complainants, and also to prove the death, since the order for their admission, of Albert A. Havens, one of these new complainants, and the succession of his heirs to his interest. These are two infants who have not been made parties to the suit. The deposition of Schenck S. Havens, taken by the new complainants after the filing of the vice-chancellor’s opinion, was objected to on several grounds, one being that no testimony was admissible on the hearing except that considered by the late vice-chancellor, and motion was made to strike out the evidence relating to the possession of the premises in dispute. No objection was made to the reading of the depositions which had been taken before the original submission of the cause to Vice-Chancellor Van Fleet. On this status of the cause the counsel for the new complainants contends that, upon the evidence taken as to the possession since the filing of the opinion, the deed from John Curtis to Joseph Lawrence, upon which the land company’s claim to exclusive ownership of lot No. 4 rests, is not admissible in evidence, that the land company’s claim of exclusive ownership therefore fails, and the complainants (or at least the new complainants) are entitled to a decree that they are entitled to an undivided interest in this tract No. 4 and to a partition.
    The evidence as to possession was taken to meet a defect in complainants’ evidence disclosed by .the opinion. The deed in dispute was an ancient deed and not proved, and the vice-chancellor, after finding that the antiquity of the deed and its proper custody had been proved, referred to the question of the possession of the premises since the execution as affecting the proof of the deed, in this language: “ The rule as to what evidence, in addition to proof of antiquity, and that the deed comes
      from a proper source, is required to justify the admission of an ancient deed in evidence, without proof of execution, is not entirely settled in this country. The cases are entirely harmonious to this extent, that where possession of the land has accompanied the deed that fact furnishes sufficient evidence of its authenticity to justify its admission, but where possession has not accompanied the deed, the cases are not entirely agreed as to what proof, other than proof of possession, will be sufficient to justify its admission.” Then, after examining the cases, he continues; “ The proof in support of the authenticity of the deed on trial comes up, in my judgment, to the required standard. Such an account has been given of it as was reasonably to be expected under the circumstances of the case, and as leads naturally to the presumption that it is genuine. Neither party has shown possession. On the contrary, both admit that the land has been vacant for a century, so that possession speaks neither for nor against the deed.” In the depositions taken before tbe original hearing, the solicitor for the complainants objected, on the ground of irrelevancy, to the evidence on the question of possession, which was offered by the defendants; and admitted subject to objection, and, so far as I find, no evidence whatever on this point was offered for the complainants. The evidence offered by the new complainants, however, shows or tends to show that the predecessors in title of complainants had possession of the tract in question by mowing the grass on it between 1830 or 1835 and 1847. It is claimed, on behalf of the new complainants, that on this new evidence the deed in question is not sufficiently proved, even on the rule laid down in the opinion, and without questioning or re-arguing any of the points covered by the opinion, they now claim that, upon the entire evidence as.now presented, they are entitled to a rejection of the ancient deed and to a decree for partition as an undivided owner. The defendant land company, on the other hand, insists that upon this hearing the new evidence is not admissible, and that decree of dismissal against all the complainants, as well the new as the original, should be made. No one appears for the original complainants, nor is any claim expressly made on their behalf, nor do I understand the claim of the new complainants to be that a decree must be entered for the original complainants on this new evidence.

      Mr. Gilbert Collins, for the new complainants.

      Mr. George Holmes, for the defendant Seashore Land Company.
   Emery, V. C.

(after stating the facts).

The complicated questions of practice which arise in the case are due, manifestly, to the irregularity of both parties to the suit in proceeding with the cause without an order of revivor after notice, in September, 1889, of the death of John C. Havens and to the failure of both parties to call the attention of the vice-chancellor to the defect of parties before the submission of the cause. The revival of a suit which is either abated or made defective by the death of a party interested, is not a new suit, but is still the same suit, in which both parties are entitled to the benefit of all former proceedings, and, as was said by Mr'. Justice Depue in Marlatt v. Warwick, 4 C. E. Gr. 439 (Errors and Appeals, 1867), all that is open for litigation on a revival of proceedings under our Abatement act is whether the new party brought before the court has the representative character reputed to him. The amendments to the bill, authorized by the act to be made by the new parties, are (section 5) “ such as his interest or title therein may require,” and in the present case the only issue made on the amended bill related to the succession in title. Under the English practice the form of decree of revivor, after reciting the last material proceeding in the suit and the subsequent events in concise form, proceeded “ that this suit, which has become abated in manner aforesaid, stand revived and be in the same plight and condition that the same was in at the time of the said abatement.” 3 Dan. Ch. Pr. (6th ed.) *2538. Both parties, under such decree, had the benefit of the previous proceedings and were bound thereby and by the whole of the proceedings, and this was the principal, if not the sole, object of the bill of revivor.

“A revivor cannot be made to operate from a particular period of the cause only, but its whole proceedings — bill, answer and orders in the cause — must stand revived, for a revivor is but a continuance of the same suit, and'it cannot be a continuation of the same unless it proceeds from where the other left off.” 2 Dan. Ch. Pr. *1542.

And under the English practice, where the parties irregularly proceed with the cause after abatement or defect of necessary parties and decrees are subsequently made, an order of revivor will not be made, but the new party will be put to a supplemental bill unless all parties expressly stipulate to be bound by the previous proceedings in the cause taken after the abatement. Griffin v. Morgan, L. R. 4 Ch. App. 351. See, also, Story Eq. Pl. 384 and cases cited. The new complainants contend (properly, I think) that they are not bound by any proceedings in the original cause taken after the death of their ancestor, but the question in this case is whether, this being admitted, the new complainants can, simply by an order of revivor, nnder the statute and under an amendment to the original bill, which merely stated their succession, now bring on, either for the benefit of all the complainants or of themselves alone, what is practically a new cause or rehearing of the cause, upon additional evidence taken to meet a defect in the original evidence of complainants after an adverse decision. So far as relates to the original complainants, it seems clear that they cannot themselves directly claim any benefit from such new evidence taken after their proofs had closed and theft cause was submitted and decided adversely. If the proceedings, by the death of one complainant, had not merely become defective in parties, but had in law abated, so that no valid decree could be made against the survivors, in the absence of the representatives of the deceased party, then the original complainants in this cause might, perhaps, indirectly receive the benefit of opening the proofs for new evidence to meet an adverse decision, if it were regular to proceed in the cause on a mere order of revivor without a supplemental bill, a supplemental bill would seem to be necessary. Story Eq. Pl. 384. Rut where, by the death of a. party complainant, the suit becomes merely defective as to parties and a final decree in the cause valid as between the surviving parties may be made, then, as it seems to me, there is no difficulty, in point of practice, in continuing the cause as between the surviving parties to final hearing and decree, even after the death of one of several complainants. Of course the decree in such case would not bind the successors in title to the deceased, but the proceedings in the suit taken áfter the death would bind all the parties who could legally take them, and the successors in title of the deceased party could not, ex mero motu and by an order of revivor under the statute, affect the status of the other parties complainant or defendant, as between themselves, existing at the time of the order, or prevent their being bound by the previous proceedings.

Ordinarily, on bills of partition, the presence of all parties interested is considered necessary, and if a decree of partition is to be made all must be parties, and in the absence of any the court would not ordinarily proceed to decree. Freem. Par. § 463 and eases cited. But this rule is based on the principle that the court will not proceed to make an ineffectual decree, and where, as here, the parties submitted the original cause without calling attention to any defect of parties, and the court thereupon denied the partition as against the defendant land company, I see no reason why the court should not proceed to a complete decree on this decision as between the then parties to the suit, in the absence of the representatives of the deceased party. These surviving parties, in submitting the cause without calling attention of the court to the known defect of parties, both took the risk of a decree which might be made settling their rights as between themselves and without reference to the absent interests, and neither of these parties can be allowed to evade the effect of the decision by introducing, directly or indirectly, new evidence to meet defects in their evidence disclosed by the decision.

As to the entry now of a decree, as advised by the vice-chancellor in his opinion, it is not contended by the new complainants that on the case as argued before him a different decree ought not to be advised by me, or that the cause is before me as a rehearing of the original cause between the original parties. As between the original parties the decree should be entered as directed in the filed opinion, and any application for rehearing is irregular until the decree has been so entered. This is the practice of the English court where the sitting chancellor directs what order should be made and an entry thereof is made in the minutes, and the order is not actually signed during his term of office. Lord Eldon said that regularly the decree should then be made up as directed in the minutes, to be signed by him, and he would then consider the application for rehearing. Taylor v. Popham, 15 Ves. 73 (1808). This is also the practice where there has been a declaration of rights in a cause before the discovery that a necessary party was omitted, who has been brought before the court by supplemental bill. Jenkins v. Cross, 15 Sim. 76. On the hearing upon supplemental bill it was there claimed on behalf of the new party that the first declaration was erroneous, but it was held that the same declaration must be made on the supplemental as in the original suit, and the new party would be heard on a petition for rehearing, otherwise the record in the cause would be inconsistent with itself. As to the original complainants who survived at the time of the original submission of the cause (not including, however, Margaret A. Havens), I conclude, therefore, that the decree advised by Vice-Chancellor Van Fleet dismissing the bill as to tract No. 4 should now be advised. Margaret A. Havens, as the widow of John C. Havens, becomes one of the new complainants and must be treated as such, although she was one of the original complainants as wife of John C. Havens. Inasmuch as one of these original complainants has died since the submission and since the filing of the opinion, the decree in the cause should be dated as of the date of the submission. Tallman v. Wallace, 19 N. J. L. J. 108 (Errors and Appeals, 1896). As to the new complainants the bill should be dismissed without prejudice. The dismissal of the bill of the original complainants as against the defendant land company leaves this defendant and the new complainants as the sole owners or claimants of any interest in tract No. 4, one of the two tracts sought to be partitioned. As to the other tract, No. 5, the original as well as the new complainants claim undivided interests in this tract, and defendant land company, by its amended answer, claims only one-half interest therein.

It appears to have been admitted by the land company, on the hearing before Vice-Chancellor Van Fleet, that one-half interest in lot No.' 5 belonged to the heirs of John Curtis, these, being the original complainants and their successors in title. The persons interested or claiming interests in the two tracts, 4 and 5, are therefore so different that no single commission could issue to divide the two lots, and the bill of the. new complainants, as to the partition of lot No. 4, must therefore be dismissed without prejudice. And under the decision of the court of errors and appeals, in Slockbower v. Kanouse, 5 Dick. Ch. Rep. 481 (1892), decided after the opinion of Vice-Chancellor Van Fleet, it would seem that the amended bill must be dismissed as one involving a dispute of legal title, and that a decree in complainants’ favor would be of no avail if appealed from. The defendant land company, by their amended answer and cross-bill, set up an equitable as well as legal title under the disputed deed, and as the vice-chancellor held the deed to convey a legal title, the cross-bill must be dismissed. As to the rights of the complainants (original and new) and of the defendants in tract No. 5, the brief of counsel submitted to Vice-Chancellor Van Fleet states that there was no dispute between the parties. Nothing was said at the argument before me in reference to-this tract, and I will hear counsel of all parties, as to the partition, of this tract, before advising decree. The infant heirs of the new complainant, Albert A. Havens, who has died since the order of revivor, should be made parties before any hearing or decree in relation to lot No. 5.


source: Caselaw Access Project

author: Emery, V. C.

license: Public Domain

text:
    The Delaware, Lackawanna and Western Railroad Company v. Harry W. Breckenridge et al.
    [Submitted December 5th, 1898.
    Filed December 19th, 1898.]
    1. Equity has jurisdiction to enjoin one from using pipes for transporting oil across a railroad right of way, where the pipes extend underneath the tracks, without the owner’s consent.
    2. In a suit to enjoin the use of another’s land, defendant is estopped from asserting a right to use it under a license, evidence of which had been admitted and considered no defence under the general issue in a prior action of ejectment, as the judgment would conclusively settle the rights of the parties under the license, though ordinarily evidence of such a license is inadmissible under the general issue.
    3. A judgment in ejectment, deciding that a certain deed did not confer on defendant a right to lay pipes through plaintiff’s land, settles the question as to the legal effect of the deed, as a question of law, thereby precluding defendant from asserting any right under the deed in a suit to enjoin the flow of oil through the pipes.
    On bill, &c. On final hearing, after trial of title at law, and application for permanent injunction.

      Mr. Ohauncey G. Parker, for the complainant.

      Mr. Henry 8. Harris and Mr. Joseph M. Roseherry, for the defendants.
   Emery, V. C.

This bill was filed to compel the removal of iron pipes laid by defendants, under lands crossed by complainant’s railroad, and to which lands complainant claimed a legal title, under a deed given by one Stewart to the complainant’s predecessors in title. The pipes were intended to be used in the transportation of oil across the state and as a part of the pipe line of defendants constructed from the Delaware river for that purpose. The bill was filed immediately after the pipes were laid, and after the removal of the pipes by complainant had been forcibly resisted by defendants, but before the use of them- for oil transportation, and the bill sought also an injunction against the use of the pipes for the transportation of oil. The answer of the defendants denied the legal title of the complainant to the locus in quo, and set up on its part legal title to the lands in which the pipes were laid, under title from Stewart acquired subsequently to complainant’s deed, and also claimed the legal right to lay the pipes in question by virtue of an agreement contained in Stewart’s deed to the company. This agreement provided for the erection by the company, under the railroad, “ of a suitable wagon road or crossing; * * * so as to enable said Stewart to travel and cross freely between his lands on each side of said granted premises.” Defendants had acquired Stewart’s title to the lands on each side of the crossing in question, and, by their answer, in addition to the legal title to the lands covered by the crossing, by the deeds covering the crossing itself' claimed also the right to lay the pipes in question, as succeeding to Stewart’s rights to a crossing, under his deed to the company. The defendants admitted, in their answer, that the pipes were intended for th.e transportation of oil, and asserted that they did this “ as of their lawful right.”

On the hearing of the cause it was directed that the complainant bring an action at law against the defendants

“touching the laying of said “pipes, or the entry upon or occupation of the crossing or any part thereof for that purpose, or the use of the said pipes for the transportation of oil or any other purpose,”

and that the cause stand over until after judgment in the action at law. No direction was given as to the form of the action. Complainant brought an action of tort in the nature of trespass quare clausum fregit, one of the acts of trespass alleged being the laying of the two lines of pipe. The defendants pleaded only the general issue. It appears by the proceedings at the trial, which have been put in evidence on this hearing as part of the record, that the defendants put in- evidence the deeds under which they claimed title under Stewart to the crossing itself and also the deeds under which they claimed title to the lands on each side of the crossing. All of the deeds were admitted, after objection by the plaintiff’s counsel that the defence of title should have been specially pleaded, in order that, on the return of the record to this court, it might appear on the record that the title was tried. The objection was overruled on the ground that title in trespass might be proved by defendants under the general issue, and all of the deeds were admitted over the plaintiff’s objection. No special objection to the admission of any of the deeds seems to have been made at the trial by the plaintiff, on the ground that justification or license for laying the pipes under the title conveyed by the deeds for the lands on each side of the crossing could not be proved under the general issue. These deeds beiug admitted, and being, therefore, before the court and jury for all the legal purposes of the trial, defendants’ counsel requested the court to charge the jury that the laying of pipes and the transportation of oil therein were within the stipulation of the deed of Stewart as to a crossing. The, court declined so to charge, and charged that the reservation was of a right of passage to and fro over the surface of the ground, and did not entitle the grantor or his assigns to occupy, exclusively, any portion of the land conveyed, either on the surface or under it. To this charge exception was taken by defendants, as also to the charge directing a verdict for the plaintiff. Judgment being entered on the verdict, a writ of error to the court of errors and appeals was taken, ánd on the application of the complainant for an injunction pending the appeal, the cause was further directed to stand over to a day, waiting the decision on appeal. The judgment being affirmed, complainant now, upon the whole record and the evidence now introduced (by stipulation) that the pipes are in actual use by defendants for the transportation of oil, moves for final decree of injunction. Defendants oppose such decree upon two grounds:

First. That the court of equity has no jurisdiction. This want of jurisdiction is claimed for the reason that the complainant’s title and rights are purely legal, and that for their protection it has ample remedy at law. It is contended that ejectment for the pipes would give full relief. But, while ejectment for the pipes or the removal of the pipes by complainant itself from its lands would afford relief, if the pipes were still unused, as they were when the case was first set down for hearing, it is clear that only a court of equity can now protect complainant in the possession of its property. The injury to complainant which now requires equitable relief is the use of the pipes by defendant for transporting oil, a use which was only threatened when the bill was filed, but which now exists. No process of the court of law nor any legal action by complainants (which must be confined to their own lands) can remedy the injury of the continual use of their lands and the invasion of their proprietary rights by acts committed by defendants on their own lands. Unless the flow of oil across the complainant’s lands is prevented, complainant’s rights in its lands are not fully protected, and the only process by which such flow of oil from the defendants’ lands across complainant’s can be stopped is by ah injunction against defendant forbidding the use of the pipes in the crossing for this or any other purpose.

Complainant’s bill was properly filed in anticipation of this threatened use, and to prevent it if unlawful, and the defendants, after the filing of the bill, undertook the use of the pipes upon the risk that, if complainant’s legal title was established, the equitable relief by injunction on final hearing as prayed by the bill would be allowed against the use of the pipes, under the claim of right which was asserted by the answer and actually exercised pending the suit and at the time of final hearing.

This case, as now presented on final hearing, belongs to the class where the legal title is directed' to be settled at law as a question preliminary to the ultimate relief purely equitable, founded on that legal title when established, and is distinguished from the class of cases cited by defendants’ counsel, where the whole scope of the proceedings in equity is the settlement in the first instance of a disputed legal title and there is no inadequacy in the legal remedies.

The second ground urged against the relief by injunction is that the question of defendant’s right to lay the pipes under the agreement for crossing, contained in Stewart’s deed to the company, was not settled in the action at law. It is claimed that such right, if it existed, was not a defence admissible under the general issue, but could be tried at law only under a special plea of license or justification, and it is therefore argued that this question has not been tried on the action at law and is still an open question here. This objection cannot prevail. In the first place, although the general rule in courts of law as to the admission, under the general issue, of evidence of acts showing justification may be as stated, yet the record shows that in this particular case the defence of justification or license to defendants as the owners of adjoining lands was in fact admitted by a court of law under'the general issue. I must therefore consider it as the law of this case, conclusively settled by a court of law, that the rights of defendant to a crossing under its deeds were tried and properly tried under the general issue. And when it is also considered that these deeds for the lands on the sides of the crossing (which were admissible, so far as I can see, solely for the purpose of justifying the trespass) were offered by defendant ánd'admitted oyer complainant’s objection, that the defendants set up a claim to license under the deeds, and that the court, on defendant’s request, both at the trial and on error, considered and ruled on the defence of justification or license raised by these deeds as properly in the case, the contention of defendants on this hearing that their claim of a crossing right was not tried and settled in the action at law must be overruled as not well founded on fact and as contrary to the doctrine of estoppel in such cases. Borcherling v. Ruckelshaus, 3 Dick. Ch. Rep. 436; S. C., 4 Dick. Ch. Rep. 340 (Errors and Appeals, 1892). In this case it was held (4 Dick. Ch. Rep. 342) that the action of the trial judge overruling, on plaintiff’s motion, evidence of acts tending to show an estoppel as not admissible at law, established such ruling as the law of that case and between the parties, on the question of its admissibility at law, and that the plaintiff could not afterwards, in a court of equity, successfully insist that the defence was admissible at law.

The defendants, therefore, appear to have had on this trial their trial by jury on the legal rights set up in their answer, and the protection of this constitutional right does not require another trial in another action.

Second. Inasmuch as the equitable jurisdiction in this case is based on the necessity of protecting a legal right by injunction because all legal remedies are ineffectual, complainant has the right to an iujunetion when the legal right is sufficiently established. For this purpose the opinion delivered in the court of errors and appeals, by direction of the court, upon the construction of Stewart’s deed to complainant, both as to the nature of the title conveyed to the company and as to the nature of the crossing rights, settle the question of the construction and legal effect of this deed. The decision settles these questions as questions of law, and this decision is not only binding on this court but must be considered as so settling the construction and operation of the deed as to relieve the complainant from further settling at law the rights of defendants under the deeds which have been set up in their answer.

Upon the whole case, I conclude, therefore, that the defendants are entitled to an injunction as prayed against the use of the pipes for the transportation of oil across the lands in question or any other purpose. Complainant, at the hearing, applied for a mandatory injunction compelling the removal of the pipes by defendants, but this application was subsequently withdrawn. The form of decree will be settled on notice, if necessary.


text:
    Sallie Warmoth v. Wickliffe B. Durand et al.
    [Filed January 6th, 1899.]
    1. A bill was filed by one of the beneficiaries, under a voluntary settlement, for the sole purpose of establishing a trust in personal property alleged to have been originally created by a deed conveying the property and declaring the trust. Upon the facts established in the case — Held, that the deed was an absolute transfer.
    2. A complainant seeking to establish a parol trust collateral to a deed conveying personal property absolutely, must formally allege the claim. It cannot be shown under a bill to establish a trust declared by the deed itself.
    On bill, &C.

      Mr. James E. Hoioell, for the complainant.

      Mr. Henry Young, for the defendants.
   Emery, V. C.

The bill in this cause is filed by one of the beneficiaries under a voluntary settlement, for the sole purpose of establishing a trust in personal property alleged to have been originally created by a deed conveying the property and declaring the trust. This paper was subsequently destroyed by the joint act and consent of the donor, complainant’s father, and the trustee, one of his sons, and the object of the bill is to establish trusts which are alleged to have been declared in favor of the four surviving children of the donor, and which entitled them to equal distribution of the property after the decease of the donor and his then wife, who died before the death of the donor. Subsequent to the destruction of the deed, the donor married again, and, by his will made after his second marriage, gave to his widow the interest of the fund now in question, with remainder to his four children and their heirs equally, per stirpes.

The bill sets out the details of the alleged trusts declared in the deed, upon information derived from the donor and the trustee, but says (paragraph 8) that complainant may not have set out the full and complete particulars of the trust deed or the trusts declared therein, and asks an answer from the defendant trustee, setting out fully and particularly all the terms of the deed and all the trusts therein declared. • The trustee, in his answer, admits the conveyance to him by writing of the donor’s-personal property, and says that this conveyance was upon the-trusts alleged in the bill (repeating them), but that he does not. know and cannot state whether the terms of the trust were embodied in the transfer or whether he executed a distinct and* separate declaration of trust, or whether the declaration of trust; was merely oral. He admits that the terms were correctly sefc out in the bill. This answer is signed by the trustee personally as well as by his solicitor.

The other answering defendants, the executor and widow of the donor, admit the execution by donor of an instrument in writing, transferring to his son, the trustee, the interest of the donor in the firm of Durand & Company, which constituted substantially his entire personal estate at the time of the transfer. The donor’s interest in that firm was an indebtedness, due from the firm to him of about $88,000, which he. left with the firm on retiring from its membership about two years previously. This indebtedness appeared on the books of the firm as a credit to James M. Durand, the donor. These defendants allege that the instrument to transfer was an absolute sale and transfer of this indebtedness, and that it contained no trust provisions.

After the answer of the trustees, setting up.that the trust might have been by parol, no application to amend the bill was made, for the purpose of either sole or alternative relief, by establishing a-parol trust, as controlling the terms of an absolute sale, and the cause came on for final hearing between complainant and the executor defendant, upon the issues as made up in their pleadings, so far as relates to the question of the manner of the creation of the trust. The paper was drawn in January, 1882, and destroyed in June, 1886, and in relation to the form of the paper, two witnesses, who had actually seen the paper, and the only witnesses now living who had seen it, were called, the answering trustee for the complainant and the defendant executor. This executor is the solicitor who drew the paper and subsequently destroyed it in the presence of donor and the trustee. This destruction, he says, was made on his advice, and after reading over the paper for the special purpose of advising both donor and trustee as to whether there was any objection to destroying it. He advised them both that there was no objection to destroying the paper and putting the credit back in the donor’s name, and that the easiest ’ipay was to tear up the paper and to put the credit back again. The paper was then destroyed in the presence of these three persons. The solicitor says that, according to his recollection, the deed was an absolute transfer and assignment to the donor’s son and contained no trust provisions. This witness’ recollection as to reading over the paper for the special purpose of considering the question of any objection to a retransfer to donor is positive and clear, and on this point the grantee’s evidence is similar. It is urged that the solicitor’s statement' as to the contents of the paper is not positive, but only to his recollection. But the solicitor was a careful, intelligent lawyer of experience, and if the trust provisions alleged in the bill, or any similar provision, were in fact contained in the paper, he must have known, on reading it, that these cestuis que trust were interested in the preservation of the paper, and with this knowledge once impressed on his mind, he could never forget, as it seems to me, that he had advised the destruction of the evidence of their interests.

If the trust provisions were in fact there at the time he advised its destruction, his present statement that he has no recollection of the provisions must be, as it seems to me, intentionally false. I see no reason for thus impeaching his credibility. The grantee, on the other hand, now swears that the deed itself contained the terms of the trust, and he gives them substantially as alleged in the bill. Reliance on his testimony is, however, much shaken by his previous signed answer on this point, and also by his present evidence as to the creation of a trust in the donor’s real estate by the same paper.

Upon the whole evidence in the cause in relation to the form of the conveyance of the personal property by the donor to his son, and upon the question whether the deed, upon its face, was absolute or contained a declaration of trust, I reach the conclusion that the deed of conveyance was, upon its face, an absolute transfer. The complainant’s effort to establish a trust created originally by a writing which has been destroyed must therefore fail, and her case, if she has one, must rest upon the establishment of a trust by parol, which was superadded to an absolute conveyance by deed. This trust so arising cannot be established under the present bill.

While it has been declared by our courts that parol trusts collateral to deeds conveying personal property absolutely may be enforced, it seems also to be settled that some principles of evidence, to be applied in establishing trusts which contradict the terms of the writings executed between the parties, are special to these cases (Danser v. Warwicke, 6 Stew. Eq. 133; affirmed, 7. Stew. Eq. 578); and in some instances the omission of the parties to commit the terms of the trust to writing is a circumstance to be considered on the question whether the final and irrevocable form of the trust has been in fact decided upon. Dipple v. Corles, 11 Hare 183, 187 (1853). The objection made by the defendants at the hearing, that on this bill the complainant cannot establish a parol trust controlling an absolute conveyance, is therefore not merely formal but affects, or may affect, defendants’ substantial rights, and they are entitled to have a claim of this character formally alleged and tried.

On the pleadings and proofs as they now stand, I am constrained, therefore, to hold that the complainant’s bill must be dismissed without prejudice, because she had failed to establish the existence of the written trust alleged in the bill. Before advising decree, however, I will allow complainant to apply for an amendment of the bill, if counsel desire, and will hear counsel as to the terms if the amendment should be allowed. At the argument complainant’s counsel claimed that the eighth paragraph of the bill was sufficient to cover a claim of parol trust dehors the deed, but I cannot so extend the plain words of this paragraph or the general scope of- the bill.


author: Reed, V. C.

text:
    The Ocean City Railroad Company v. Thomas Bray et al. Thomas Bray et al. v. The Ocean City Railroad Company.
    [Filed May 3d, 1897.]
    A railroad company will not be enjoined from constructing its line across-complainant’s land, before condemning his interest in same, where the value of the land was nominal, and defendant had made every effort to get title thereto, and complainant had purchased it at the instance of a rival road of defendant, and with its money, and for the sole purpose of baffling defendant in the completion .of its line, since an injunction does not issue as of right, and the rule that courts take no notice of the purpose in the mind of the parties-in asserting or defending their rights had no application.

      Mr. Robert H. McCarter, for the Ocean City Railroad Company.

      Mr. Henry M. Snyder, Jr., and Mr. Samuel H. Grey, for Thomas Bray et al.
   Reed, V. C.

These are two suits instituted practically simultaneously, one by Thomas Bray and others for the purpose of enjoining the Ocean City Railroad Company from crossing his land, before condemning his interest in the same, for the proposed route of the defendants across his premises, and the other suit by the Ocíean City Railroad Company for the purpose of enjoining Mr. Bray from resisting the company’s agents from constructing its road along the located route across Mr. Bray’s land.

By an order made at the hearing the two suits were consolidated, and evidence taken and arguments heard at the same time in both.

Mr. Logan Bullitt and Mr. Henry Lay projected a railroad to run from a point' on the South Jersey railroad, a little east of Petersburgh, to Ocean City. On June 8th, 1896, the company was incorporated by filing a certificate under the General Railroad act. As I understand, most of the right of way had already been bargained for, and about three miles of the road liad been built when the articles of incorporation had been filed. The agents of the promoters of the Ocean City Railroad Company were under the impression that the land now the subject of contention belonged to one Mr. Bridgewater, and they procured fróm him a contract to convey said land to the railroad company. Acting under their supposed rights, the agents of the railroad company entered upon the ground, placed some stakes therein and drove pilings across the thoroughfare (for the land was partly submerged), and, as Mr. Day says, placed coal and oil, for construction purposes, upon the premises.

This work began about the 1st of May, and continued until the bill in the suit by Mr. Bray was filed and the company Was enjoined. The history of the title to this land now claimed by Mr. Bray seems to be this :

Mr! Fowler is the engineer who, with Mr. Loomis, located the route of the Ocean City railroad, and he is also a deputy-surveyor of the board of proprietors of West Jersey. He had negotiated the contract with Mr. Bridgewater for the purchase of the locus in quo. Mr. Fowler became doubtful as to Bridge-water’s title to the land, and concluded that the land had never been located. He says he put in a stake on June 25th, and supposed that by that act he had, by the rules of the board of proprietors, three months to finish a survey.

When he got ready to make the survey, he started from Philadelphia for that purpose. On the same train was Mr. Haines, the surveyor-general of the board of proprietors of West Jersey, who had been employed in the interests of the West Jersey and Seashore Railroad Company to make a survey of the same land for them.

Mr. Haines went upon the ground the same night, came back the next morning, leaving others to complete the work which he had initiated.

The results of the labor of those whom he had left behind were communicated to Mr. Haines by telegraph, and from these dispatches Mr. Haines prepared a return and map, and filed the same about seven o’clock in the evening of that day.

Later in the same evening Mr. Fowler filed his return.

The survey of Mr. Haines was adopted by the board because of the priority of its filing. The return was made to one Mr. Wright, and Mr. Wright’s title was conveyed to Mr. Bray. It is not denied that the return was made at the instance of the West Jersey and Seashore Railroad Company, which company had already a railroad running from Ocean City, with which the Ocean City Railroad Company would be a competing line.

Indeed it is not denied that Mr. Bray holds the title to the loous in quo solely as a means for baffling the Ocean City Railroad Company in completing its road. It also appears that the value of the land (about five acres) included within the right of way over the tract is merely nominal.

Counsel for Mr. Bray insist that it does not matter what his motive was in getting title to this land; that he, as owner, is entitled to the same protection against the occupation of the same by the railroad company, as any other owner would be against similar aggression.

As regards the enforcement of legal and equitable rights by an ordinary action or suit, this proposition is undoubtedly true. In respect to those actions at law wherein malice is not an essential element in the plaintiff’s case, or in those suits in equity where intent does not lie at the bottom of the right to relief, the courts will .take no notice of the purpose in the mind of the parties in asserting or defending such legal or equitable rights.

The right of a party to redress in such instances is ex debito justicia, and a court has no discretionary power to determine whether it will or will not award to a party his legal or equitable remedy, according to whether the party may or may not be actuated by a malicious or impolitic motive. But an injunction is an extraordinary proceeding, the propriety of the allowance of which depends upon a variety of circumstances aside from the strictly defined right of the complainant. In this respect writs of injunction are akin to those other extraordinary remedies, namely, certiorari and quo warranto. Neither of these writs is allowed as a matter of strict right. Whenever public interest may suffer, a writ of certiorari may be refused. Stew. Dig. p. 119 § 16.

The same rule applies to writs of quo warranto, where the motive of the defendant or the effect upon public or private interests will be considered in granting or refusing the writ. State, ex rel. Mitchell, v. Tolan, 4 Vr. 195.

The allowance of an injunction is a matter of discretion, and an injunction will not be granted if it will cause great injury to the defendants, without corresponding advantage to the complainant. Stew. Dig. p. 620 §§ 7, 8, 9, 10.

So it is perceived that whether writs of this class will be allowed depends not upon the strict right of the parties to some redress, nor upon the question whether .the defendants have violated some legal right, but it depends upon whether, under the circumstances, this extraordinary process should go in the particular instance.

In the case before me the writ of injunction is asked for, to aid the complainant in protecting his lands against invasion or until an award of damage may be made and tendered.

That he has a remedy at law for such trespass is entirely clear. He can bring his action for damages, and I have no doubt he ■can compel the railroad, by mandamus, to condemn. Under ordinary circumstances, these remedies would be regarded as entirely adequate. It is upon the ground that the defendant is a corporation, and as such threatens • a trespass by an extra vires act, that such an injury is regarded as irreparable. Under ordinary conditions it may be admitted that the fact that the defendants have made every effort to get title to the land, but have been baffled, would not be an answer to the bill. When, however, the position of the complainant is regarded in connection with those efforts, it seems to me that it would be perverting the use of the injunction power to award to- him the use of this writ.

In the first place, the ground ■ upon which the writ is sought is illusory. The real purpose is not to protect the complainant’s land against an illegal trespass nor to compel compensation as a condition precedent to the taking. The land is, in reality, without intrinsic value. The placing of the railroad track upon it would produce no appreciable injury to it. The complainant is not concerned about the injury which the placing of the road and roadbed upon-the soil to which he has title would occasion. The writ is not asked for the purpose of protecting that land against such a construction. The real purpose is to protect another railroad against- the -building of this road as a rival. The bill is as manifestly filed for that purpose as if it had been filed by the West Jersey and Seashore railroad to restrain the building of defendant’s road.

Further than this, it is not denied, as I have already observed, that the property which stands in the name of the complainant was bought by Mr. Bray with the money of the West Jersey and Seashore Railroad Company. If this company was empowered to take title to this property it would now be the equitable owner of the land. For the purposes of this suit it is the owner of the land, for Bray is a mere figure, whose movements are directed by the West Jersey and Seashore Railroad Company.

The granting of this writ would concede to this company all the rights of an ownership which it has no power to acquire. This court would lend itself to a scheme condemned by public policy and inequitable in every phase in' which it can be regarded.

The facts in this case, in view of the questions here presented, are identical'with those in the case of Piedmont and Cumberland Railroad Co. v. Speelman, 67 Md. 260. In'that case a lease of lands had been assigned to a president of a railroad company, to be used by him for the purpose of throwing obstacles in the way of the completion of a rival railroad. On a bill filed by the assignee of the lease, the court refused to enjoin the new road from entering upon the land to lay its track, but left him to his remedy at law. The refusal of the court was put upon the ground that the president had no other motive or purpose in obtaining the assignment of the lease than that of defeating the construction of defendant’s road and that a court of equity would give no aid to such a transaction.

The opinion of Chief-Justice Alvey contains a full and satisfactory discussion of the grounds for this judicial action.

But the question now mooted is settled in this court.

Upon a motion to dissolve the preliminary injunction in this suit Vice-Chancellor Pitney decreed such dissolution on the-grounds — first, that the value of the land was so insignificant that a court of equity would not take cognizance of the suit, and second, that Mr. Bray had bought the land at the instance of the competing road ; that his object in asking for an injunction was merely to obstruct the construction of defendant’s road for the benefit of the existing road.

Now, the facts appearing upon final hearing in these respects are substantially the same as those appearing upon the bill and affidavits upon which the decision of Vice-Chancellor Pitney was made. His decision is, therefore, in my judgment, a direct precedent, by which I am guided in the decision of this case upon final hearing, for it is impossible to distinguish between the posture of the parties in the application for a preliminary injunction and their present posture, so far as the construction then placed upon these two phases of the case is involved.

I will advise a decree dismissing the bill of Bray.

In respect to the bill of the Ocean City Railroad Co. v. Bray Vice-Chancellor Pitney refused a preliminary injunction upon facts which were in no substantial respect variant from the facts appearing upon final hearing. The grounds upon which the injunction was then refused are, in my judgment, obstacles in the way of advising an injunction upon final hearing. In- addition to the facts then appearing, it was stated upon the argument in this case, and not denied, although not strictly within the case, that the proceedings taken by the Ocean City Railroad Company for the condemnation of its right of way across this land have, since the hearing, been vacated upon certiorari by the supreme court.

The conclusion thus reached is also in accordance with the opinion in Piedmont and Cumberland Railroad Co. v. Speelman, supra.

A word in conclusion in regard to the insistence on the part of the West Jersey and Seashore Railroad Company that the route filed by the Ocean City Railroad Company is so indefinite as not to conform to the statutory requirements. Any indefiniteness which originally inhered in the route and map as filed has been cured by an amended route. But, even conceding that the filed map, delineating the route, was in other respects indefinite, it must be assumed that it was sufficiently definite for all the purposes of the case of Bray v. Ocean City Railroad Co. In that case the bill charges that the Ocean City Railroad Company filed a map of its route or location of its road, passing through the lands of complainant and crossing the Crookhorn thoroughfare, and that certain contractors were engaged in driving piles in the meadow opposite complainant’s land and within the lines of said surveyed route for the purpose of making a roadbed and building thereon the said railroad ; that the said work of piling is being done within about three hundred feet of Crookhorn thoroughfare, and will shortly be completed, and that the said work is within the lines of the railroad as surveyed and intended to be laid out and built upon.

In this case it is perceived, therefore, that the definiteness of the filed route, so far as respects its location in the locus in quo, is not merely admitted but charged as part of the complainants’ case.

In the other ease, that of the West Jersey and Seashore Railroad Co. v. Bray, the alleged defect is set up in the answer of Bray, but inasmuch as the injunction is refused upon other grounds this point becomes of no importance.


text:
    William N. Scudder v. William Kilfoil.
    [Filed June 8th, 1898.]
    1. Where an injunction has been allowed to restrain violation of a contract not to engage in the same business as that sold in competition with the purchaser, and, by virtue of a subsequent contract between the same parties, it is claimed that such restraint of trade is waived, an application to vacate such injunction, not being designed to change the original decree, may be presented by petition rather than by bill of review.
    2. One who purchases the good will of a business with a contract by the seller not to re-enter the same business in competition with the buyer in the same place, does not, by subsequently entering into a general copartnership with the seller, inferentially waive such contractual restraint; nor does a dissolution of the partnership invest the seller with the right to re-enter business as a competitor, as an incident to his moiety in the good will of the firm.
    On motion to dismiss a petition.

      Mr. Aaron V. Dawes, for the motion.

      Mr. Linton Satterthwait, for the petitioner.
   Reed, V. C.

The petition is filed to vacate a writ of injunction. The petition sets out that on June 20th, 1894, the petitioner, the defendant in this cause, and William N. Scudder, the complainant therein, entered into a contract, by the terms of which Kilfoil agreed not to engage in the same business (butcher and deáler in meats, game and poultry) in Princeton, Mercer county, New'Jersey, so long as Mr. Seudder should carry on. the same business in Princeton. On September 5th, 1895, Mr. Seudder filed a bill in this court for an injunction against Kilfoil, in which suit a decree was entered on October 29th, 1895, restraining Kilfoil, his servants and agents, from carrying on the business of butcher and dealer in meats, game and poultry, either directly or indirectly, within the borough of Princeton, so long as Seudder should continue in said business, and from soliciting orders for meats, game or poultry, and from supplying the citizens of Princeton with meats, game or poultry, &c.

The petition then sets out that in August, 1896, the parties entered into copartnership, for the carrying on of the business of buying and selling meats, and the general butcher business, in Princeton, each contributing fixtures and cash to said partnership ; that they continued the joint butcher business in said borough (which business had been sold by the petitioner to said Seudder at the time of making the said contract and had been continued by said Seudder until they entered into the contract of copartnership) until October 30th, 1896, when the petitioner sold his interest in said copartnership to Seudder, without restriction or condition as to the good will of said business, or as to the right of the petitioner to engage again in business in said borough of Princeton.

The claim of petitioner is that by the agreement of partnership, Seudder abandoned all claims and right to enforce the first contract, and therefore the injunction which restrained the petitioner should be vacated.

It is perceived that the petition sets up a matter occurring since the original decree as a reason for vacating the decree or restraining the writ of injunction.

I had some doubt whether this matter could be called to the attention of the court except by a bill in the nature of a bill of review, but am inclined to think that it' may be presented by petition; It is not an application to change the decree originally entered, but is analogous to an application to stay process issued to enforce a decree or judgment where a judgment has been paid or performance of a decree has been waived, or any other ground has arisen by which the enforcement of it would ,be inequitable and oppressive.

In the case of Spann v. Spann, 2 Hill Ch. (S. C.) 152, upon a motion to set aside an attachment issued to enforce a decree, which motion the chancellor had granted, the judge who wrote the opinion for the court of appeals, said: “ It is clear that the courts, both at law and equity, have the power and duly exercise it of suspending the execution of even final process, on account of subsequent matter, which would render the execution of it oppressive or inequitable.” i

I will therefore express my views of the rights of the parties under the facts set forth in the petition.

The contention of counsel for the petitioner is that subsequent to the making of the decree, the complainant, by taking the defendant into partnership, and so permitting him to carry on the enjoined business, abandoned his right under the original agree.ment. It is not stated that the complainant, upon entering into the partnership relation with the petitioner, expressly agreed that the former covenant should be rescinded. Nor at the termination of their relation was there any agreement to that effect. The wáiver or abandonment of the previous agreement, it is insisted, arose from the fact that they entered into a partnership to transact the same kind of business, and then dissolved their partnership relation.

The line of reasoning by which this result is put forward is that the covenant by which the petitioner bound himself not to transact business in Princeton, was equivalent to a sale to complainant of the good will of the business, which petitioner then sold to complainant; that when they entered into partnership this good will became a part of the property or assets of the firm in which the petitioner acquired an equal interest'; that upon .dissolution of the firm, a moiety of this interest remained his property, and entitles him personally to engage in the same business.

It seems to me that this line of argumentation is defective. The negative covenant entered into by the petitioner, by which he bound himself not to engage in the same business within the borough, was of much more consequence than a mere sale of the good will of the business to Mr. Scudder. The sale of the good will would have only precluded the vendor from soliciting trade from the old customers of the firm, but would not have prevented him from setting up a rival business in Princeton or anywhere else. Labuchere v. Dawson, L. R. 13 Eq. 322; Newark Coal Co. v. Spangler, 9 Dick. Ch. Rep. 354; Althen v. Vreeland, 36 Atl. Rep. 479.

By virtue of the contract, Scudder therefore got much more than the “ good will,” namely, the right to prevent Kilfoil from soliciting the old customers of the business; he got a right to exclude Kilfoil from doing any business at. all in the same line in the same place. If Scudder had entered into partnership with a third person, no right to enforce Kilfoil’s covenant would have passed to the partnership, but would have remained the sole right of Scudder, the covenantee. So, when Kilfoil became a partner, he obtained no interest in the covenant as such partner, Which could annul his obligation as covenantor. The question, then, is reduced to this, did the consent by Scudder, that Kilfoil should engage in the same business in Princeton, as his partner, imply a waiver of his rights under the contract? I am clear that it did not. The two contracts were not incongruous or inconsistent. The covenant in the original contract provided against Kilfoil entering upon the same business in rivalry with Scudder. The permission implied by the partnership arrangement was that he might engage in the same business in copartnership with Scudder. If Scudder had hired Kilfoil to assist him in his business, I do not see how this could be tortured into a consent that the latter could work for himself. Now, their relation as partners, both interested in the business of the firm, made the consent of Scudder that Kilfoil should so work as partner of much the same quality as would have been his assumed consent that- Kilfoil should work as his servant. His consent in the latter ease would have been that he could work for Scudder; in the former, that he could work in the interest of Scudder. To this extent only was there a consent that Kilfoil should engage in business while Scudder was still in business. When Kilfoil ceased to be a partner, and even that consent was withdrawn by the cessation of the firm relationship, he had acquired no right to engage in business on his own account, in contravention of the terms of his original contract.


text:
    John H. Thompson v. Frederick W. Bird et ux. et al.
    [Filed July 20th, 1898.]
    1. When a mortgagor successively sells portions of mortgaged premises by general warranty deeds, upon a foreclosure of the mortgage any of the mortgaged premises still owned by the mortgagor will be sold first, and if the mortgage debt still remains unpaid the parcels last sold by him will be sold next, and so on, in the inverse order of the deeds, until the mortgage debt is satisfied.
    2. Where a purchaser- of a part of mortgaged premises assumes the payment of all or a portion of the mortgage on the whole of such premises, the land so purchased is liable for the mortgage debt, or such portion of it assumed by the purchaser, before the remaining portion of the mortgaged premises held by the mortgagor or by subsequent purchasers from the mortgagor can be sold in satisfaction of the mortgage debt.
    3. Where there was a mortgage for §1,200 on a certain tract of land, and two parcels of said land were sold by the mortgagor under conveyance wherein each grantee assumed the payment of a certain mortgage for §600 on the parcels conveyed, although there was no mortgage for §600 on either of said parcels, the assumption of the grantees is equivalent to an assumption to pay §600 of the mortgage on the whole tract.
    On exceptions to master’s report.
    The bill was filed to foreclose a mortgage upon a tract of land in the city of Plainfield given by F. W. Bird and wife to one Charles Gr. Ross on May 3d, 1893, and assigned by Ross to the complainant on December 18th, 1895. The mortgage was for $1,200, and there is now due for principal and interest the sum of $1,315.05. Portions of the mortgaged premises have been .sold by the mortgagor since the execution of the mortgage. It is to that part of the master’s report which establishes the order in which the portions shall be sold that the exceptions are interposed. The sales by the mortgagor were made in the following order: of the first lot to Mary Newell on January 30th, 1894; of the second lot to Sarah Brady on September 1st, 1896, who, on the same day, conveyed the said lot to Benjamin W. Ellicott-. Two smaller lots, one in the rear of the lots sold, remain the property of the mortgagor.
    The master reports that these two smaller lots should be first sold, and then the lot owned by Ellicott and finally the lot owned by Mrs. Newell. This direction follows the ordinary rule of selling in the inverse order in which the lots were conveyed. But it appears that in the deed to Mary Newell it was stated that the land conveyed was subject to a $600 mortgage, which the, grantee assumed and agreed to pay, and in the deed to Sarah Brady it was stated that the plot sold was subject to a mortgage of $600, which the grantee agreed to assume and pay. In the deed from Brady to Mr. Ellicott there is this clause: “ Conveyed subject to a certain mortgage thereon for $600, made by Frederick W. Bird and wife to C. Ross.” In addition to this, which appears upon the face of the deeds submitted to the master, there is the testimony of Mr. Ellicott, the substance of which is that Sarah Brady is the mother-in-law of Mr. Bird, the mortgagor; that Ellicott negotiated the purchase of his lot with Mr. Bird and that Mr. Bird said that he would convey said lot to Sarah Brady and have her make a deed to him (Ellicott); that during said negotiations Bird stated that the lot conveyed was encumbered with a certain mortgage for $600 made by Bird to C. Ross, and by no other encumbrances of any kind whatsoever.

      Mr. Nelson Runyon, for the complainant.

      Mr. Benjamin W. Ellicott, pro se.

   Reed, V. C.

It is entirely settled in this state that where a mortgagor successively sells portions of mortgaged premises by general warranty deeds, upon foreclosure of the mortgage, the portions will be ordered sold in the inverse order of the several conveyances. Any of the mortgaged land still owned by the mortgagor will be first sold, and if the mortgage debt still remains in part unpaid, the parcels last sold next and so on in the inverse order of the deeds, until the mortgage debt is satisfied. This rule is so entirely settled that citations of the eases in this state from Shannon v. Marselis, Saxt. 413, down to the present time, in which this rule has been repeatedly recognized, would be useless.

The equity which throws the burden of the mortgage debt primarily upon the remaining portion owned by the mortgagor is apparent. Having conveyed a part of the mortgaged land with full covenants, without reference to any lien or encumbrances, if thereafter the part so conveyed is called upon to pay any part of the mortgage debt, the mortgagor is liable to the grantee upon his covenant. To avoid, if possible, circuity of action, the remaining property of the mortgagor is sold first. If sucn remaining part ts insufficient to pay all of the secured debt, yet it is equitable that as little as possible be left for the grantee to pay.

As between successive grantees, each takes his title knowing that the land still held by the mortgagor is primarily liable for the whole debt, and if he chooses to buy a portion of said lands he will take it subject to this liability. This liability is, of course, modified if he huys only a part of the mortgagor’s remaining land, and the part so sold being secondarily liable to that of the still unsold portion. This is the reason of the equity underlying the ordinary method of sale of portions of mortgaged premises by deeds professing to confer a title without reference to encumbrances. But if any purchaser of a part of mortgaged premises, instead of bargaining for a clear title, chooses to assume the payment of all or a part of an encumbrance upon the whole of such premises, such purchaser cannot equitably ask that the remaining portion shall be first sold to answer the mortgage debt, for it is apparent that, after such person gets the land from a mortgagor at a less price on account of the encumbrances, the payment of which he assumes, he cannot ask that the land of the mortgagor shall be sold to relieve his own land of the debt which he has promised to pay as a part of the consideration for his purchase. For these obvious reasons the land of such purchaser, who has assumed to pay a mortgage, or a part of a mortgage, is liable for all or such part of the mortgage debt before the land of the mortgagor or the land of a subsequent purchaser from the mortgagor. Wikoff v. Davis, 3 Gr. Ch. 224; Engle v. Haines et al., 1 Halst. Ch. 186; Black v. Morse, 3 Halst. Ch. 509; Hill’s Administrator v. McCarter, 12 C. E. Gr. 41; Warwick v. Ely, 2 Stew. Eq. 82, 85.

In the present ease, when the two conveyances were made respectively to Mrs. Newell and Mrs. Brady there was a mortgage upon the entire property amounting to $1,200. Each deed contained an assumption to pay a mortgage of $600. The master found as a fact that there was no $600 mortgage upon the property and therefore he found that there was nothing upon which the assumption could operate. For this reason he puts the primary liability for the payment of the $1,200 mortgage upon the remaining property of the mortgagor.

I am of the opinion that this method of dealing with the defendants is erroneous. In my judgment the mention of the $600 mortgages is with respect to a division of the $1,200 mortgage into two parts. What the mortgagor meant was that each of the lots sold by him should be liable for the payment of the mortgage upon the premises to the extent of $600.

This seems to me to be the equitable conclusion from the facts without extrinsic explanation.

It is probable, however, that the explanation of the way in which the clauses appear in the respective deeds is found in the statement in the bill, charged to be made upon information received by the complainant from the mortgagor. This statement is that the mortgagor had intended to make two $600 mortgages, one upon each of the two tracts conveyed to Mrs. Newell and Mrs. Brady respectively, which mortgages were to take the place of the $1,200 mortgage upon the whole tract. These $600 mortgages were never made and the $1,200 was never divided. But the assumption of the payment of a $600 mortgage by Mrs. Newell was the equivalent of an assumption to pay $600 of the mortgage upon the whole tract, and when Mr. Ellicott bought his lot he took it subject to the remaining portion of the $1,200 mortgage, i. e., $600.

The consideration paid for the two tracts was undoubtedly fixed with the understanding that the title to each lot was taken subject to this lien. I can perceive no reason for relieving the land of either of the grantees from its liability to pay the amount of the lien so fixed, nor for fixing upon Mr. Ellicott’s tract a liability to pay a greater sum before Mrs. Newell’s traot is called upon to pay anything.

I think the exceptions to the master’s report are valid. The lot sold to Mrs. Newell should be first sold to raise $600, with unpaid interest from the time she purchased, and the lot conveyed to Mrs. Brady should be sold to raise $600, with unpaid interest from the time of the conveyance, and that the mortgagor’s remaining land be sold last to raise any balance due after the sales of the above-mentioned tracts.


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    William H. Skirm et al. v. The Eastern Rubber Manufacturing Company.
    [Filed July 20th, 1898.]
    1. A corporation, being involved and in the hands of a receiver, arranged, through its officers, with a majority of its creditors for an extension by giving four time-notes to each creditor to cover his claim, and the receiver was thereupon discharged. Two of the creditors did not receive notes under such arrangement. Payment on the first of the series of notes was defaulted, and it was then proposed to take up the notes by an issue of bonds in lieu of them, secured by mortgage on the corporation property, which proposition was accepted by a majority of the creditors, and the bonds were issued to them, some, however, retaining their notes and others being paid cash. — Held, that at the time of executing the bonds and mortgage the corporation was insolvent, within Corporation act \ 64, which prohibits transfers by insolvent corporations.
    2. Creditors who took deferred-payment notes to cover their claims against an insolvent corporation, and, on default of payment, surrendered them for corporate bonds issued to take up such indebtedness, are not bona fide purchasers-of the bonds.
    3. Where creditors took deferred-payment notes to cover their claims against an insolvent corporation, and, on default of payment, surrendered them for corporate bonds issued to take up such indebtedness, some of which notes bore the personal endorsement of the president and principal stockholder, the agreement, being in the nature of a composition, invalidated the endorsement, because it was given to only part of the creditors, and hence it was not a matter of value so as to constitute the takers of the bonds purchasers for value.

      Mr. Alvah A. Clark and Mr. Henry W. Calhoun, for the Central Trust Company.

      Mr. John T. Bird and Mr. Woodbury D. Holt, for the Eastern Rubber Manufacturing Company.

      Mr. Chauncey G. Parker, for a judgment creditor.
   Reed, V. C.

This is an appeal from a decision of the receiver of the Eastern Rubber Manufacturing Company rejecting a claim made by the Central Trust Company as a preferred claim. The Central Trust Company is trustee for certain bondholders, secured by a mortgage. The mortgage was executed by the Eastern Rubber Manufacturing Company to the trustee on May 1st, 1896, and covers all the real estate and machinery. It was made to secure-an issue of proposed bonds amounting to $110,000, of which bonds $106,000 were afterwards issued to creditors of the Eastern Rubber Manufacturing Company.

The receiver, on November 13th, 1897, rejected the claim made by the Central Trust Company, that this mortgage, to the amount of the bonds issued, was a preferred claim. The rejection was put upon the ground that the Eastern Rubber Manufacturing Company, at the time of the execution of this mortgage, was an insolvent corporation, and that the mortgage was not made to secure all, but only some of its creditors. From this decision of the receiver this appeal is taken.

All the property of the insolvent company was ordered, on October 1st, 1897, to be sold free of all encumbrances. It was sold on November 11th, bringing $32,500, subject to taxes only amounting to $4,793.85. This fund is now in court.

It was proven in the cause that, of the creditors existing at the time of the execution of this mortgage, some refused to receive the bonds, and to others, among which was the Trenton Rubber Company, no bonds at all were tendered.

If, in fact, therefore, the mortgagor was at the time of the execution of the mortgage insolvent, that instrument was a nullity under the provision of the Corporation act. The sixty-fourth section of this act provides that whenever any corporation shall become insolvent, or shall suspend its ordinary business for want of funds to carry on the same, neither the directors nor any officers or agents of the corporation shall sell, convey, assign or transfer any of its estate, effects, choses in action, goods, chattels, rights or credits, lands or tenements, nor shall they or either of them make any such sale, conveyance, assignment or transfer in contemplation of insolvency, and every such sale, conveyance, assignment or transfer shall be utterly null and void as against creditors; provided, that a bona fide purchase for a valuable consideration, before the corporation shall have actually suspended its ordinary business, by any person without notice of such insolvency or of the sale being made in contemplation of insolvency, shall not be invalidated or im.peached.

Upon the argument, the question of the insolvency of the defendant was, by the counsel for the trust company, made to turn upon whether an unpaid subscription of about $90,000 due from Frank A. Magowan, the president and principal subscriber of the Eastern Rubber Manufacturing Company, was or was not an asset of value. The way in which this item assumes importance is that in several statements and estimates of the property and the debts of the company, this item of $90,000, if allowed as a valuable asset, makes the amount of debts less than the value of the property, while, if eliminated as an uncollectible asset, it reduces the property of the company below the amount of the debts. This condition of affairs existed on May 1st, 1896, when the mortgage was made.

The exact insistence is that there is nothing in the case to show that at this time this sum of money was not collectible from Magowan, and that if such part of it was collectible as would make the assets of a value equal to the value of the property, then the company could not be regarded as insolvent.

To understand the condition of this company and the relation of Magowan to it, it is necessary to recall that the present receiver is the second officer that has been appointed for this corporation.

On August 3d, 1895, it was put in the hands of a receiver as an insolvent corporation. Subsequently the consent of the great body of its creditors was obtained to an extension. Under an arrangement entered into between the officers of the corporation, or, I may say, the officer of the corporation (for Magowan was the only one who figured in it) and its creditors, four extension notes were to be given to each of the several creditors of the company, with the exception of the Trenton Rubber Company and a few creditors who were paid in cash, and one other who received neither notes nor cash. Four notes were given to each of the creditors, each note for one-quarter of his debts. The notes were dated September 26th, 1895, payable at six, twelve, eighteen and twenty-four months respectively. Under this arrangement the consent of the creditors was obtained for the discharge of the receiver and the resumption of the property by the corporation.

The first installment of these notes matured on March 29th, 1896, and the company was unable to pay. It then, through Magowan, proposed to secure the creditors by issuing bonds, to be taken by the creditors instead of the notes, the bonds to be secured by a mortgage. A large majority of the creditors accepted the proposal and bonds were issued to them. Some of the creditors refused to accept them, and of those, some were paid and others retained their old notes. The mortgage executed to secure these bonds is the one now in question.

The company, therefore, had been taken out of the hands of the receiver by giving extension notes to the great body of its creditors, amounting to $141,000. This volume of debt was not extinguished at the time, but its payment was spread over a period of two years. The affairs of the company, it is apparent to my mind, were in such straits that if they had been then-wound up the creditors- could not have hoped to realize the amount of their debts. They therefore preferred to give an extension, in the hope that the future business of the company might enable it to pay all, or if not all still a greater part, of the debts than could be realized by a sale of the plant at that time.

The company continued its business for some months longer, until the first installment of notes matured. As already remarked, it could not pay them. Magowan owed $90,000 for stock and had owed it at the time the first receiver was appointed. None of this was paid in at either of the company’s critical financial periods. It has, in fact, remained unpaid from the time of the organization of the corporation. Mr. Servis says that it was impossible to get Magowan to pay any money into the concern. Then came the proposition to secure the extension-note creditors by the mortgage. The extension of the mortgage staved off the collapse of the corporation until April, 1897, when it went into the hands of the present receiver.

It is to my mind entirely obvious that in May, 1896, the company was insolvent. The valuation of the property of this corporation, taken at different times, coupled with the fact that the sum realized from its subsequent sale was less than one-half its valuation, displays, clearly, that it was not possible to realize enough to pay its debts.

But if, upon winding up, there had been a surplus, nevertheless a condition of insolvency existed at the time of the execution of this mortgage. The company was so conditioned that it could not pay its debts, and it was only by the forbearance of its creditors, who hoped to realize more by the mortgage than by pressing their claims at once, that it was permitted to drag on for some months longer.

What is meant by insolvency is well settled (11 Encycl. L. 168), and when employed in this statute its ordinary significance is presumed to have been in the mind of the legislature.

Chief-Justice Shaw, in Thompson v. Thompson et al., 4 Cush. 127, said: “By the term ‘insolvency,' however, as used in this statute, I do not understand an absolute inability to pay one’s debts at some future time upon the settlement or winding up of all a trader’s concern, and a trader may be said to be in insolvent circumstances when he is not in a condition to pay his debts in the ordinary course,'as persons carrying on trade usually do.” Bayley v. Schofield, 1 Mau. & Sel. 338; Shone v. Lucas, 3 Dowl. & R. 218.

The same definition of insolvency under the federal Bankruptcy law was given in Buchanan v. Smith, 16 Wall. 277, 308.

Mr. Justice ’Van Syckel, in his opinion in National Bank of the Metropolis v. Sprague, 6 C. E. Gr. 530, 538, said: “ It is abundantly proved that when this mortgage was executed Sprague & Stokes were pressed by their creditors for payment or security for their claims, and unable to meet their pecuniary obligations, and involved in debt to an amount beyond their ability to pay, and that their creditors were informed of their condition. Under this state of facts Sprague & Stokes, in contemplation of law, were insolvent. Insolvency means a general inability of a debtor to answer pecuniary engagements, and it does not follow that he is not insolvent because he may ultimately have a surplus after winding up his affairs. Sugd. Vend. & P. 668; Bayley v. Schofield, 1 Mau. & Sel. 338; Hall v. Swift, 4 Bing. N. C. 381.”

In Brouwer v. Harbeck, 9 N. Y. 589, Mr. Justice Allen said: “A corporation, like an individual, is insolvent when it is not able to pay its debts. Insolvency means a general inability to answer, in the course of business, the liabilities existing inoapable of being enforced. Cutten v. Sanger, 2 Younge & J. 459; Bouv. Inst. 187. This term had a well-known significance at the time of the enactment of the law in question. It was used by the legislature with reference to such known significance.”

This case involved a construction of the New York act preventing preference by insolvent corporations.

To the same purport is the case of Sewell v. Cape May and Sewell Point Railroad Co., 30 Am. & Eng. Ry. Cas. 155.

Entirely ignoring all the testimony in regard to Magowan’s pecuniary condition, which was admitted upon another point in the case, in my judgment it is proved that the corporation was actually insolvent on May 1st, 1896.

Nor do I see any substance in the insistence that the creditors who took these bonds were bona fide purchasers for valuable consideration.

It is contended that some of these notes were endorsed by Magowan personally, and that those creditors who surrendered the notes when they accepted the bonds surrendered his personal endorsement, which was a matter of value, and so put them in the posture of purchasers for value. In respect to this contention, it may be remarked that the arrangement by which the extension notes were given was in the nature of a composition agreement and invalidated the personal endorsement of Magowan given to some to the exclusion of other holders of these extension notes. Greenh. Pub. Pol. 141.

In the second place, the evidence taken upon this point seems to show that the endorsement of Magowan could with difficulty be regarded as possessing any value. But the conclusive answer, in my judgment, is that when this mortgage was taken these creditors had knowledge of the previous career of this company and of its financial embarrassments, and cannot be regarded as purchasers without notice.

I will advise that the decision of the receiver, rejecting this claim as a preferred claim, be affirmed.