text:
    Anna L. Morrow v. Frederick R. Hasselman et al.
    [Decided July 11th, 1905.]
    . 1. Where the owner of land lays it out in streets and lots, and there is a general plan for the improvement of a street by a uniform scheme as to the building line, and covenants in relation thereto’ are inserted in the deeds of all purchasers, the same may be enforced by one purchaser against another without proof of special damages.
    2. Immaterial violations of the restrictions, not showing an intention to abandon the plan, are no defence to such action,
    3. Where the complainant gave the defendant notice as soon as it appeared that the latter’s building would violate the restriction, but the building was completed after suit for an injunction was commenced, complainant is entitled to a mandatory injunction.
    On amended bill, supplemental bill, replication and proofs.

      Mr. Samuel A. Patterson, for the complainant.

      Messrs. PLowe & Davis, for the defendants.
   Emery, Y. C.

The bill is filed to restrain the violation of building restrictions on property located on Allen avenue, in the borough of Allenhurst. Complainant and the defendants both hold title under conveyances from the Coast Land Company, which owned a large tract of land at Allenhurst, laid out in streets and avenues for the purpose of sale and improvement. Allenhurst is a' seaside summer resort, and the land company, with a view to the general improvement of its tract for purposes of residence and of sale of its remaining lands, imposed restrictions in its conveyances, some of which related to the location of the building line, and these are the only ones now in question. The tract held by the land company comprised several streets and avenues, and the restrictions upon the different streets and avenues varied somewhat from each other. Allen avenue, one of the principal avenues, ran to the ocean, and on this avenue the restrictions, which were in the form of covenants on the part of the grantee, provided that the grantee, his (or her) heirs or assigns,

“shall not erect or suffer to be erected upon, said land a dwelling-house which shall be of. less value when erected than $3,500, nor any building, piazza, porch, bay-window or obstruction to view, within forty feet of the line of said Corlies and Allen avenues, except only a fence not more than three feet high, or an ordinary open veranda or piazza -or steps leading from the first floor of a porch, piazza, veranda or house to the ground.”

Defendant’s grantor, one Elizabeth P. Gardner, purchased two lots (Nos. 276 and 277) on the north side of Allen avenue, on April 1st, 1896, and complainant’s grantor purchased .two lots adjoining on the west (Nos. 278 and 279), on March 11th, 1901. Complainant received title to the lots on July 18th, 1901, and erected on one of the lots .(No. 279) farthest from the ocean a dwelling-house, in which she resides throughout the 3rear. At the time of her purchase and of the erection of her house, no dwelling had been erected on either of the defendant’s lots. Defendant Hasselman purchased the lots 276 and 277 on April 1st, 1904, and erected a dwelling on No. 276 in the fall and winter following. The main foundation wall of this house is forty feet from Allen avenue, but on the first story a bay-window, which is part of a room in the house, projects two and a half feet beyond the restrictive line, and is supported by girders oar the porch or piazza which extends across the whole froart of the house, and is about twelve feet in width, exclusive of the steps leading up to it. On this porch or piazza, and at its edge or side arearest the street, are three pillars, one at each end and one ioa the centre, which support the entire upper portion of the hoarse on that side. The second story extends over the entire piazza, and the roof of the house, which is two stories high, extends, on this side, over the piazza. These pillars are supported by brick columns or piers under the piazza. The two front rooms on the second story occupy the whole front of the house, and along the entire front extend about four feet beyond the building line. Beyond this front line of these rooms there is a structure about twenty-four feet wide, and extending six feet to about the front line of the piazza. This structure has a roof projecting out from the roof of the house, and includes at each end a closet connecting with each room, about four feet by six, between which closets is an open veranda or “loggia,” also connected by a door with each room. The closets are enclosed and connect only with the rooms. These projections of the second story and the closets connected with them are certainly violations, of the restrictions, as is also the bay-window on the first story, and the questions in the case are (1) whether the complainant, as the grantee of one lot, has a right to enforce them against the defendant as the grantee of another, and (2) whether, if she has such right, there are, as to her or the land company, any equities in the case which prevent the enforcement. The complainant, not being a party to the defendant’s deed, and having therefore no privity, either of legal estate or contract, with the defendant, her right to enforce the covenant is equitable only, and depends upon the existence of a general plan for the improvement of this avenue by a uniform scheme, and the insertion of covenants in the deeds of purchasers, which were intended for the benefit of each purchaser on the avenue, and to which each purchaser with notice was subject. DeGray v. Monmouth Beach Club, 50 N. J. Eq. (5 Dick.) 329 (Vice-Chancellor Green, 1892); Hayes v. Waverly and Passaic Railroad Co., 51 N. J. Eq. (6 Dick.) 345 (Chancellor McGill, 1893); Trout v. Lucas, 54 N. J. Eq. (9 Dick.) 361 (Vice-Chancellor Emery, 1896). As was said by Chief-Justice Depue, in Walker v. Renner, 60 N. J. Eq. (15 Dick.) 493, 498 (Court of Errors and Appeals, 1900), “restrictions of this character (erection of buildings) are valid and are regarded as for the benefit of the owners of the tract to be improved and made profitable by the sale of lots, and also for the advantage of persons who have become purchasers on the faith of the scheme of improvement adopted.”

The evidence shows the adoption of such general plan of improvemeht in this ease, and that all of the lands conveyed by the land company, or by the Coast Land Improvement Company, its successors in title, on Allen avenue (with one exception), have been conveyed with a restriction as to the building line of not less than forty feet. On the second block east of the block now in question, lots Ros. 82 and 83 were conveyed by the land company with a twenty-five feet restriction instead of forty feet, but this was because lot Ho. 81, next adjoining these on the east, was never owned by the land company, and upon this latter lot a house had already been built by a prior owner up to the twenty-five-feet line. This exception as to Ros. 82 and-83 cannot be considered a change of the general plan of the company. And, although different building lines were adopted for different'‘avenues, the line adopted for each street is the general plan or scheme for that street upon which purchasers upon the street or avenue have a right to rely. Defendant Hasselman’s own deed did not in terms set out the restrictions, but declared expressly that it was subject to the same restrictions imposed in the deed from the complainant to Mrs. Gardner, in which deed the covenants were fully set out. The defendant therefore, as settled in Hayes v. Waverly and Passaic Railroad Co., supra, must be held chargeable with notice, even if his statement be true that the abstract of title, upon the faith of which he bought, did not disclose the restrictions, and that he had no actual knowledge of the restriction until it was called to his attention by the complainant, or on her behalf, soon after lie began the erection of his house. -The complainant purchased her lot, relying on the general plan as to the building line of Allen avenue, erected her own building on the line, in compliance with it, and notified defendant Hasselman to observe the restrictions as soon as her attention was called to their violation. Proof of special damage is not essential for the enforcement of covenants in such cases—Kirkpatrick v. Peshine, 20 N. J. Eq. (5 C. E. Gr.) 206 (Chancellor Zabriskie, 1872); Cornish v. Wiessman, 35 Atl. Rep. 408 (Vice-Chancellor Emery, 1896) — but substantial, or at least appreciable, damage is shown in this ease, for complainant’s view to the east is specially affected by these violations, and she has a special interest and right in preventing the obstruction to her view. The case, therefore, is one where she is equitably entitled to enforce the restrictions, unless the further objections set up by defendants are valid. It is insisted, in the first place, that the covenant should not be enforced because of the previous violations of these building restrictions, which have been allowed on Allen avenue and on the other avenues and streets. As to alleged violations on other streets and avenues, nay view is that, even if proved, they are iaot material in this case, as the restrictions oia each avenue, in a general plan of this kind, must be considered as adopted with special refereaace to each avenue aaad its improvemeiat, aaad the rights of purchasers- on one aveaaue, wlao have iia good faith bought and built according to its restrictions, are not impaired or affected by acts of the veaador or other purchasers relating to the theia existing restrictions on other avenues. As to the alleged violations of the restrictioias on Allen avenue, they must be material and such as to prevent the geiaeral plan relating to that avemae from being carried out. The materiality of the violations is to be determined by the circumstances of each case, and the questioaa seems to be whether they are such as -to indicate an abandoiament of the original general plan and make its enforcemeaat iiaequitable because of the changed coiadition of the property under restriction. Jackson v. Stevenson, 156 Mass. 496 (1891); Trustees of Columbia College v. Thacher, 87 N. Y. 311 (1882); Amerman v. Deane, 132 N. Y. 355 (1892); German v. Chapman, L. R. 7 Ch. Div. 271 (1877). These are cases where the use of the property was restricted. Where the restriction relates to the character or location of the building itself, the passive acquiesceaace of a purchaser in breaches of the covenaiat, by which he sustains no particular injuiy, has beeia held iaot to deprive him of his equity to protection, where the breach immediately affects his enjoyment of his own house. Western v. McDermott, L. R. 2 Ch. App. 75 (1867); Payson v. Burnham, 141 Mass. 547 (1886). In the latter case the erectioia of a bay-window next plaintiff’s house, in violation of a covenaiat, 'was enjoined, and it was held that the fact that owners of other houses had similar bays was immaterial, where they did not interfere with plaintiff’s prospect or the use of his house. The violations set up by defendant are principally encroachments, or alleged encroachments, upon the building line, by the piazzas on the second story of some of the houses on Allen avenue, and the projection of the gables of the houses over the line. In some of the houses there are round towers, bays or projections on the second story, two or three feet beyond the line. Hone of these violations are of such a character as to indicate an abandonment of the building line or the restrictions by the land company, even if it be assumed that a second story piazza is within the covenant. And, as against the present complainant, they have no force as indicating a waiver or abandonment on her part of the entire benefit of the covenants, when necessary to protect her own house. The houses in question were not in complainant’s immediate neighborhood; the3r did not interfere at all with her prospect or her enjoyment of the benefit of the general plan, and the projection of any of these second story piazzas and ba}rs beyond the line could probably not have been ascertained without a measurement. Complainant, until the filing of the answer, did not know of any encroachments on the building line. She knew of the second story piazzas of the houses, but these structures do not seem to have been considered either by the land company or by any of the builders as within the restrictions, and I am inclined to think that they are not. But even if they were erected under an erroneous construction of the covenant as to piazzas, this would be no ground for considering the covenant relating to the building line of the houses as not in force, or the general scheme of the building line as wholly abandoned, although it might be ground for refusing to enforce the covenant against this practical construction put on it by all parties. I considered this question in Righter v. Winters, 68 N. J. Eq. 252 (1905), where I refused an injunction for this reason, and if defendant here had erected only a second story piazza, instead of extending the second story of the house over the line, its removal would not have been enforced by injunction. But none of these violations reacli to the point now insisted on by defendant, viz., the right to extend what is practically the second story of the house itself beyond the building line and to the front line of the piazza. This objection, therefore, cannot prevail. The next objection, and the one principally relied on, is that complainant has herself violated the restrictions, and is therefore not equitably entitled to an injunction. The alleged violation consists in the structure of the second story piazza on her own house. This is at the centre of the second story, extends in front to near the edge of the roof of the first story piazza, and is about twelve feet in width. It is built as an open piazza, with slender columns at the front' corners, but for a space of about three feet from the bottom is enclosed. During the last winter season the complainant enclosed the open space above with glass sashes, which are removable. This piazza has a roof, upon which the dormer windows in the third story open or look out. This piazza, so far as its structure goes, may fairly be considered “an ordinary open veranda or piazza” within the restriction, and if a second story piazza is allowed under the covenant, as I think it is, there is no violation at all of the covenant. But, in my view of the covenant, the violation is so slight and immaterial, for present purposes, as to be no bar to relief.

One other point remains to be noticed. The Coast Land Company, by deed dated October 1st, 1898, conveyed to the Coast Land Improvement Company portions of the lands in the original tract still owned by it, but the deed did not include either complainant’s or defendant’s land. This deed described the lots, but in the clause containing the restrictions, which was a single clause applicable to all the property, blank spaces were left for the distances fixed as the building line of the several streets. It is claimed that this conveyance had the effect of removing the restrictions from all the lands conveyed to the Improvement Company, and destroyed entirely the general plan, so far at least as it affected subsequent grantees. The effect of the deed was to substitute the Improvement Company for the Coast Land Company as owners of the lands conveyed, which comprised most of the lands owned, and the intention was to continue the sale and improvement of the lands under the previous general plan adopted by the original vendors. The Improvement Company have since continued to carry out the original plan, and its conveyances to purchasers of lands on Allen avenue are made with restrictions as to the building line of not less than forty feet. The equitable rights of complainant and other purchasers from the Coast Land Company to enforce the covenants relating to Allen avenue against purchasers from that company, have not been affected or impaired by this conveyance, either as an abandonment of the plan or otherwise. Complainant in this case promptly notified the defendant Hasselman of the infringement of the covenant, and of her intention to compel the observance of it by suit, if necessary. This notice was given as soon as it was apparent that the second story of his house would project beyond the line. Notwithstanding the notice, Hasselman proceeded with the erection, and it was completed after the suit was commenced. The excavation for the foundation walls of his house was begun about November 35th, 1903, and was entirely within the line. On December 5th, Hasselman began the erection of the frame of the house. Complainant discovered, about December 10th, that the building would project beyond the line, and on the 11th of December gave the notice in writing. The bill was filed on December 36th, 1903, and the building completed after the suit. The allegations in the bill being defective, it was amended after demurrer, and the amended bill was filed June 4th, 1904. The completion of the building under these circumstances must be considered to have been at the defendant’s risk, and complainant is entitled to a mandatory injunction to enforce the covenant. Pending the suit, and after -the completion of the building, the -defendant Hasselman conveyed the premises to the defendants Bowers and Fairchild, subject to the restrictions in the Gardner deed, and a supplemental bill was filed making them also defendants. They have answered the bill, and subsequently reconveyed the premises to the defendant Hasselman. He afterwards made still another conveyance of the premises (with warranty) to a Mr. Moore, who was the owner of the legal title at the time of the hearing (January, 1905). Moore had knowledge of the suit but does not personally defend it, and Hasselman undertook to defend the suit for him. Complainant is entitled to a decree enforcing the -injunction against all of the defendants, and on the settlement of the decree I will hear counsel as to the right to a decree in such form as to enforce it against Moore, without a supplemental bill to carry it into effect.


source: Caselaw Access Project

author: Emery, Y. C.

license: Public Domain

text:
    Merritt Leach v. Harriet G. Leach.
    [Decided July 11th, 1905.]
    Under the Chancery act providing that when money is paid into court on foreclosure proceedings, the owner of any estate for life may apply for payment of a gross sum in lieu of the estate, consent of the remainderman is not required, but only that of the owner of the estate for life.
    On bill, answer and cross-bill, replication and proofs.

      Mr. James Steen, for the complainant.

      Mr. Arthur Lovellfor the defendant.
   Emery, Y. C.

On the bill and cross-bill in this ease, husband and wife contested the ownership of lands to which the wife held the legal title by deed subsequent to the marriage. At the hearing I decided that the lands belonged to the wife. The lands comprised two .lots, and pending the suit one of the lots was sold in foreclosure proceedings on a mortgage given by both husband and-wife, and the surplus after paying the .mortgage, being about $550, has been paid into court. The husband now contests the immediate payment of any portion of this money to the wife. The marriage took place in 1878, and issue was born, a daughter, who is still living. Under the decisions declaring the effect-of our statutes relating to the real estate of married women, the respective interests of the husband and wife in the land sold, and its proceeds, are as follows: The wife has an estate for hex-life in the lands, with remainder to the husband for his life, if he survive the wife, and with remainder over to the wife in fee. Ross v. Adams, 28 N. J. Law (4 Dutch.) 160, 179 (Supreme Court, 1859); Doremus v. City of Paterson, supra, p. 188 (Vice-Chancellor Stevens, 1904). The latter case reviews all the previous cases and shows the present status very clearly. Under the Chancery act (P. L. 1902 p. 531 § 60), when money is jxaid into court on foreclosure proceedings, the owner of aixy estate for life may apply for the payment of a gross sum iix lieu of the estate, and the court “shall direct the payment of such gross sum as shall be deemed a just and reasoxxable satisfaction for such estate for life, and which-the person exxtitled shall consent in writing to accept in lieu thereof.” The section further provides that if xxo consexxt be given, the court is to determine the proper sum to be invested for the benefit of the person exxtitled to the life estate, and direct its investment. . In this case the wife applies for the immediate payxxxent to her of all the money to which she is entitled, but the husband does not consent to the payment of any of the money to the wife, or to take any gross sum in lieu of his interest. As to the payment to the wife of a gross sum in lieu of her life estate, the statute does not require the consent of the persons interested in remainder, and this amount may be calculated according to the usual rules and paid to the wife. The balance must be invested during the lives of the husband axxd wife, for the benefit of the wife during their joint lives, axxd for the further benefit of the husband during his life, if he survive the wife. On the death of the husband during the wife’s life, she will be entitled to the principal sum invested. The wife’s formal consent in writing required by the statute must be filed.


text:
    Frederick H. Smith, Jr., v. Joseph H. Cunningham et al.
    [Decided July 24th, 1905.]
    At foreclosure sale the written conditions signed by the purchaser provided that he should pay twenty per cent, of the purchase-money at the close' of the sale, and sign an acknowledgment of purchase in- accordance with such conditions, and in case of his failure to comply with the conditions the property should be resold, he to reap no benefit therefrom, but to be held answerable for loss and expenses occasioned thereby. The purchaser having failed to comply with 'the conditions and complete the purchase, and the sheriff having resold it at a loss—Held, that the de-' posit of the first purchaser is to be retained and applied on the loss.
    On petition by complainant for payment of money in hands of sheriff.. Heard on petition and affidavits, answer and affidavits.

      Mr. Louis A. Ziegler, for the complainant.

      Mr. Thomas Anderson, for the respondent.
   Emery, Y. C.

This is a foreclosure suit, and on the execution the sheriff of Essex, on December 13th, 1904, sold the mortgaged property for $2,650 to the respondent, Zwetschkenbaum, who paid to the sheriff $540, the twenty per cent, of the purchase-money required by the written conditions of sale, which were signed by the purchaser. These contained the following conditions:

“Second. The purchaser will be required to pay twenty per cent, of the purchase-money at the close of the sale, and sign an acknowledgment of purchase in accordance with these conditions.
“Fourth.'Any person or persons'purchasing at this vendue and not complying with the foregoing articles and conditions, the property so struck off and sold to him or them will be offered for sale a second time, and the first purchaser or purchasers to reap no benefit therefrom,, but be held answerable for all loss and expenses occasioned thereby.”

The purchaser failed to comply with the conditions and complete the purchase, and the property was resold by the sheriff on February 28th, 1905, to the complainant, for $1,850. This sale has 'been confirmed and a deed to complainant delivered. The amount of complainant’s decree is over $2,800, and he now applies for payment to him on account of the decree of the money paid on account which is still in the hands of the sheriff. The purchaser opposes the application and claims repayment of the money to himself. There was no express provision for forfeiture of the deposit-money, and had the second sale resulted in a price sufficient to cover the bid on the first sale and the costs of both sales, with interest, there would have been no claim against the purchaser under the fourth condition, and in the absence of any provision for forfeiture, he would have been entitled to recover the deposit. Chancellor v. Gummere, 39 N. J. Eq. (12 Stew.) 582 (Vice-Chancellor Van Fleet); affirmed on appeal, 40 N. J. Eq. (13 Stew.) 279 (1885). The conditions of sale in this case were similar, and Mr. Justice Reed, delivering the opinion of the court, says (at p. 281.) that in case of sale for a less sum, the first purchaser must make good the deficit. “ Where the conditions of sale contain a provision for a resale and the determination of the amount of liability by this method, the sheriff is obliged to resell, and could not have brought an action for damages without such resale. Webster v. Hoban, 7 Cranch 399 (1813), cited with approval by Mr. Justice Depue, in Townshend v. Simon, 38 N. J. Law (9 Vr.) 239, 242 (Supreme Court, 1876). The purchaser claims that, as the sheriff elected to rescind the first sale and made a second sale, the first sale is altogether abandoned and the deposit-money which had been paid on the first sale becomes, by this rescission and resale, the money of the purchaser, as there is no sale on which it can be applied. This contention ignores, as I think, the obvious intention of the conditions. The deposit when received was received under the second condition, as part payment of the purchase-money of the first sale, but it was also received under the fourth condition, providing the method for ascertaining the damages which would result if the purchaser defaulted, and one object of the resale was to ascertain this amount. A stipulation for resale of the character contained in condition 4 is considered as a security for the fulfillment of the agreement to purchase, and after a resale in pursuance of it an action at law may be maintained by the sheriff. In such action the measure of damages is the difference between the defendant’s bid at the first sale and the sum realized at the resale, together with the costs and expenses of the resale, and the money recovered is held by the sheriff for the benefit of the parties interested. Townshend v. Simon, 38 N. J. Law (9 Vr.) 239, 242, 246 (Supreme Court, 1876). For the purpose of ascertaining under this condition the damages by reason of the purchaser’s failure, the amount of the deposit must be accounted for and credited. In such action for damages a credit of the deposit must be made in order to ascertain the deficiency, even if there is an express provision for forfeiture of the deposit, so that it could not be recovered back. The deficiency or loss for which the defaulting purchaser is considered liable is in such cases held to be the difference between the balance of the purchase-money on the first sale (after giving this credit) and the amount of purchase-money obtained by the second sale. Ockenden v. Henly, El., B. & E. (96 Eng. Com. L.) 485, 493 (1858); Bailey v. Dalrymple, 47 N. J. Eq. (2 Dick.) 81 (Vice-Chancellor Pitney, 1890). A fortiori must credit be given for the deposit in an actioai for daonages where there is no provision for its forfeiture but there is a provision for resale.

Harder conditioaa 4, the resale, in case of a deficiency, is, by agreement of the parties, made on account of the defaulting purchaser, and is not to be considered as if it were merely an act of the officer or vendor rescinding the first sale for all purposes. The right under this stipulation to retain the deposit for credit on the purchaser’s account, in case of loss on resale, differs from that of a vendor of real estate who resells after receiviaag a deposit under a contract not expressly providing for forfeiture of the deposit or resale for purchaser’s account, and the vendor’s situatioaa, with such stipulation for resale, is similar, as it seems to me, to the familiar' one of a seller of personal property who has received a pa3rment on account, when the buyer subsequently defaults and refuses to receive the property. The seller here is entitled, without any express stipulation, to sell for the purchaser’s account, and recover the loss resulting after crediting the payment on account, and this is an ordinary method of fixing the damages or loss for the default on agreement to purchase personal property. The reason the deposit cannot be always so applied on a resale of real estate' is because of the equitable doctrine that the vendor of real estate, to the extent of the purchase-money paid, is, under ordinary contracts, a trustee of the lands for the vendee, and in the absence of any provision for forfeiture of the deposit, or resale on the purchaser’s account, has the right to retain the purchase-money paid only on the condition of retaining' the property to carry out the sale. Hoagland ads. Hall, 38 N. J. Law (9 Vr.) 350, 355 (Supreme Court, 1876). By This express contract of the purchaser for resale and liability for loss thereon, and the absence of any provision for a return of the deposit-money in case of a loss, the sheriff is entitled and bound to hold it as a credit or allowance in making up the loss.

In Shann v. Jones, 19 N. J. Eq. (4 C. E. Gr.) 251 (Chancellor Zabriskie, 1868), a deposit made under similar conditions of sale was directed to be credited on account of the complainant’s decree, but the case was argued mainly on the special circumstances relating to tire receipt of this sum, and the point now raised was not debated. In Winants v. Traphagen, 66 N. J. Eq. (21 Dick.) 455 (Court of Errors and Appeals, 1904), upon the purchaser’s default the deposit was impounded by order of the court for tire benefit of complainant, to meet any deficiency on resale, and the correctness of this practice was assumed (at p. 456), although the question now raised was not expressly decided.

As the conditions of sale now involved are those which have long been used in many counties on sales by sheriffs and other officers, I have considered the question as if it might not be concluded by the decision in Shann v. Jones or Winants v. Traphagen. An order will be advised directing payment by the sheriff to the complainant. There is no substance in the respondent’s claim that he is entitled to be relieved from the contract and to recover the deposit, on the ground of alleged mistake in reference to the character of the property. If any mistake occurred, neither the complainant nor his solicitor were at all responsible for it.


author: Stevens, V. C.

text:
    Aaron Van Houten
      v. Mary V. H. Stevenson et al.
    [Decided July 19th, 1904.]
    1. The objection that another suit is depending for the same matter is, .in general, taken by plea and not by motion.
    2. The complainant and defendant are tenants in common of a piece of land, and the complainant holds a mortgage on the undivided interest of the defendant. The complainant filed a bill to foreclose his mortgage, and the defendant made application to stay proceedings on the ground that there is a partition suit pending brought by the defendant against the complainant affecting the said premises and other lands, but not making the complainant, as mortgagee, a party.'—-Eeld, that the record does not show another suit pending for the same matter, and therefore the motion must be denied.

      Mr. Preston Stevenson, for the motion.

      Mr. Frederic W. Van Blarcom, contra.

       This opinion was omitted from its proper place.—Rep.

   Stevens, V. C.

This is an application to stay proceedings in a foreclosure suit on the ground that there is a partition suit now pending which will bring about the same result and to which the complainant and defendants are parties.

The objection that another suit is depending- for the same matter is, in general, taken by plea and not by motion. ’ Dan. Ch. Pr. (6th Am. ed.) 634; Way v. Bragaw, 16 N. J. Eq. (1 C. E. Gr.) 213; Fulton v. Golden, 25 N. J. Eq. (10 C. E. Gr.) 353; Larter v. Canfield, 59 N. J. Eq. (14 Dick.) 461; Griffing v. Griffing Iron Co., 61 N. J. Eq. (16 Dick.) 269. In the ease of such a pica, if it is not expressly averred that the suits are for the same subject-matter, facts must be stated which clearly indicate that they are. Griffing v. Griffing Iron Co., supra.

The primary object of a partition bill is partition. If the land cannot be partitioned without great prejudice, then, by statute, it may be sold and the proceeds divided. The' act of 1884 (Rev. Sup. p. 783), embodied, with slight changes, in the present Partition act (P. L. 1898 p. 644), authorizes the complainant to make creditors, having liens upon undivided interests, parties. § 15% et seq. It does not compel him to do so, but it says he'may. § 56. If he does not, “the court, on motion of either party, may admit any creditor having a lien on the undivided interest * * * a party to the proceeding.” Where, and only where, a sale is decreed instead of a partition, the scheme embodied in these provisions is to require the share of the proceeds of sale, charged with the lien, to be brought into court and disposed of after notice to encumbrancers and other persons interested.

In the ease in hand, Mrs. Stevenson, being the owner of an undivided sixth part of certain lots in Pátérson, mortgaged her interest to Aaron Van Houten, the owner of another undivided sixth. Yearly six jrears ago she commenced the partition suit. It has not yet gone to a decree. The master has reported, as to part of the real estate) in favor of partition, and as to another part (including the part mortgaged) in favor of a sale. Exceptions taken by Mrs. Stevenson to certain portions of this report are now pending.

On April 12th, 1904, Aaron Yan Houten filed his bill to foreclose against Mrs. Stevenson. He has a mortgage upon her undivided interest in the land, or a part of .the land, which the master has reported should be sold.' It is this foreclosure suit which Mrs. Stevenson is seeking, by her present motion, to have stayed. Her insistment is, necessarily, that the partition suit relates to the same subject-matter. It is obvious that as now constituted it does not. The object of the partition suit, as disclosed by the amended bill, is division of the land among the owners; or, if that cannot be effected without great prejudice, division of the money into which the land may be converted. The object of the foreclosure suit is the collection of a debt out of the proceeds of the sale of the undivided interest of Mrs. Stevenson. These two objects are dissimilar. Sebring v. Mersereau, Hopk. Ch. 502; Harwood v. Kirby, 1 Paige 469.

But, as I have said, the statute ingrafts upon the partition suit something quite distinct. For the purpose of enabling the land to be disposed of to advantage, and so that encumbered interests shall not hurt unencumbered ones, the statute allows the land to be sold, free from liens on undivided shares. Freem. Coten. & Par. § 479. The purchase-money applicable to the encumbered shares it directs to be paid into court, and it authorizes any party in interest, either owner or encumbrancer, to apply for an order directing such part of the money as he shall claim, to be paid to him. It further provides for a service of notice upon the persons interested, to be followed by a hearing. It is obvious that this is a proceeding distinct in its object from partition. Like all other judicial proceedings, it begins when proper parties are brought into court for the purpose of litigating the very matter. A decree without notice to persons interested, and without a record to support it, is a nullity everywhere. Reynolds v. Stockton, 43 N. J. Eq. (16 Stew.) 211; 140 U. S. 254.

In the case in hand the bill of partition did not, as under section 06 it might have done, make creditors having liens on undivided interests parties. After stating the existence of the $3,000 mortgage, the amended bill alleges that

“your orators are not advised at this time as td who the present owner of said mortgage is (it having been assigned by said Van Iiouten, as they are informed and believe), but beg leave to join the owner thereof hereafter by proper amendments when he is ascertained,” &e.

No such amendment has been made and no application has been made by anybody to admit the mortgagee in his character of mortgagee. No petition has been presented setting up 'the liens and asking for an adjudication in respect of them, and no notice has been given, such as section 59 authorizes. There is nothing in the record, therefore, which discloses another suit pending for the same matter as that for which the foreclosure suit is brought. It is not even certain, as yet, whether the statutory proceeding is available; there is no decree adjudging that the land shall be sold; nothing but the master’s report recommending that course. If the land be not sold, if the court be of opinion that it may be partitioned, then there will be no foundation for the proceeding in question, for the express statutory direction is that in that event the liens shall attach upon the shares set off to the debtors.

It is obvious, therefore, that even if the question may be raised on motion, the motion cannot prevail.


author: Stevens, Y. 0.

text:
    Eliza C. Aubry et al. v. Henry M. Schneider et al., executors.
    [Decided May 17th, 1905.]
    Husband and wife ordinarily hold a chose in action, made to them jointly during coverture, as tenants in common and not as joint tenants.

      Messrs. McEwcm ■& McEwcm, for the complainants.

      Mr. Augustus A. Rich, for the defendants.
   Stevens, Y. 0.

On May 17th, 1880, Eliza C. Aubry and three other persons executed a bond and mortgage for $16,000 to Louis Battais and Michelle Battais. The mortgagees were husband and wife. In 1897 Louis Battais died. By his last will he gave to his wife the úse and income of his personal property during her life, and he made her one of his executors. In 1904 Michelle Battais died. This interpleader bill is filed by the mortgagors, who allege that since the death of Michelle they have been unable to determine to whom of right the interest on the mortgage belongs; that on the one hand the surviving executor of Louis Battais claims one-half of it, and on the other the executors of Michelle claim the whole. The representatives of the respective interests make no objection to the form of the proceeding, and have each answered. The question is one of equitable cognizance, for, conceding that the right to sue upon the bond survived to the wife at law, the question still is, was she, in her lifetime, entitled, in her own right, and without reference to her husband’s will, to the whole of the money, or would she have held one-half of it, when recovered, in trust for the personal representatives of her husband?

Counsel for the representatives of the wife argued that husband and wife were tenants by the entirety of the bond and mortgage, and thus took by survivorship. He relied upon the case of Buttlar v. Rosenblath, 42 N. J. Eq. (15 Stew.) 652, in which it was held that that species of tenancy still exists, notwithstanding the provisions of the Married Woman’s act. The case'was one of title to real estate. The case in hand is one of title to a chose in action, viz., a bond. The mortgage merely stands as a security for it.

Tenancy by the entirety arises where an estate in land- is devised to the husband and wife, or where a joint purchase is made by them during coverture, there being no words in the-devise or conveyance showing that the grantor intended them to take either as joint tenants or as tenants in common. Fulper v. Fulper, 54 N. J. Eq. (9 Dick.) 431. They are each seized of the entirety, and neither can sell without the consent of the other, and the survivor takes the whole. The characteristic features of this tenancy are survivorship and the equal interest of both in the fee or freehold—an interest indestructible by the husband. A conveyance of the fee by either without the other is inoperative. McDermott v. French, 15 N. J. Eq. (2 McCart.) 78.

If we contrast this estate with the imperfect right which the wife, at common law, had in a bond or other chose in action made payable to herself and her husband, the radical difference between them will at once appear.

Says Addison, in his excellent work on contracts (Add. Cont. (6th ed.) p. 753):

“Upon bonds and other personal contracts under seal, which have been entered into, during the coverture, with the wife separately or with the husband and wife jointly, the husband may sue alone, treating them as his own contracts, or he may elect to give the wife an interest therein and join her as co-plaintiff in the action.”

And further on (at p. 772) he says:

“She is also entitled, by survivorship, to0 the benefit of all contracts under seal, entered into, during the coverture, with herself alone or with her husband or herself jointly.”

The wife’s interest in an obligation of this sort differed, then, from her interest as tenant by the entirety of land in the particular that during the joint lives the obligation was regarded as so completely the property of the husband that in an action at law, although the contract was joint in form, he might sue for it in his own name without joining his wife. If it survived to his wife, it did so by his permission. To denominate such a right teuancy by the entirety is only misleading. It is not so called in any case of authority.

But the Married Woman’s act has entirely changed the old law. Section 3 reads as follows:

“The real and personal property and the rents, issues and profits thereof,' which any married woman has received or obtained since the 4th day of July, 1852, or which she shall hereafter receive or obtain by purchase, gift, grant, devise, descent, bequest or in any manner whatever, shall be her sole and separate property as though she were a single woman.”

The operation of this statute upon tenancy by the entirety has been somewhat peculiar. At common law, while husband and wife were both seized of the entirety, so far as the corpus (if I may be permitted to use that expression) of the estate was concerned, the husband alone was entitled to the rents, issues and profits during the joint lives of himself and his wife. After that act had begun to operate, while they remained seized of the entirety of the fee so that neither could alien without the assent of the other, they became entitled in common each to one-half the rents, issues and profits. This must have been upon the theory that the right to them grew out of the right to the freehold estate; that the wife, being the owner of the entirety of that, was also, as a necessary consequence, jointly with her husband entitled to the rents, issues' and profits, but that the moment her title to these vested in possession it had been, instanter, divested, under the operation of the common iawrule which gave the wife’s personalty to her husband, but that the effect of the Married Woman’s act was to prevent this consequence;— to give to the wife that which, because of her ownership of the freehold, properly belonged to her. But how does she take these rents, issues and profits during the joint lives? As joint tenant or as tenant in common? As I read Buttlar v. Rosenblath, 42 N. J. Eq. (15 Stew.) 652, she takes as tenant in common. The question there was, could a creditor sell the interest of tire husband ? The court below held that the -estate by the entirety had been altogether abolished by the indirect operation of the Married Woman’s act, and that husband and wife held the land as tenants in common. This the court of errors and appeals denied. They said that the fee was still held as before, but that the rents, issues and profits were, during the joint lives, held (to use Mr. Justice Van Syckel’s expression) “in common,” and so they decided that a creditor could sell the husband’s undivided interest in them. This decision was necessarily based upon the idea that the statute declaring that the wife shall take what she takes as “her separate property,” the legislative intention was best effectuated by declaring that they held by distinct moieties—that is, as tenants in common.

Now it seems to me that, viewed in this aspect, the case cited has an important bearing upon the case under consideration. It is certain that the right of the married woman to an obligation taken in the joint names of herself and husband has undergone an important change. Whereas, before the passage of the act, her right, if so slender a thing may be called a right, depended upon the will or caprice of her husband, it has now become a stable right. The'right, as it stood at common law, scarcely rose to the dignity of a joint obligation. If the husband chose, he Could, as has been shown, sue in his own'name, and -have judgment and execution in his own name. It must, therefore, during their joint lives, have been, in the eye of the law, although in formi a joint obligation, in reality and in legal contemplation a several one, if the husband elected so to regard it. The fact that the husband might join his wife in the suit, if he thought fit, only emphasized his power to deal with it as he willed. The Married Woman’s act changed all this, and the question is, how did it change it? Did it make her a joint tenant, or did it make her a tenant in common? I think that it is more in accord with tire purpose of the legislation and with the rationale of the decision in Buttlar v. Rosenblath to hold that in cases of this kind, in the absence of any decisive indication to the contrary, she will take as tenant in common. In the first place, this tenancy has been favored by the courts for at least two centuries. In a note to Blackstone’s commentaries (2 Bl. Com. *193) it is said that in ancient times joint tenancy was favored by the courts of law because it was more convenient to the feudal lord and more consistent with feudal principles, but that these reasons have long ceased, and that a joint tenancy is, in the words of Lord Cowper (York v. Stone, 1 Salk. 158), regarded as an odious thing.

By the act, the wife, as against her husband, is to hold what she holds as her separate property. If husband and wife are deemed to hold choses in action, given to them jointly, by distinct moieties, each can, upon payment, receipt for one-half and hold the part receipted for in his or her own right. Suppose they should be deemed to hold as joint tenants, and the chose in action should be paid ofE, would they hold the fund realized and any investment of it as joint tenants, and -would it, too, be subject to the incident of survivorship? Would a-formal act, for example, a formal transfer, be needed to sever the tenancy ?

As the law favors tenancies in common; as the Buttlar Case decides that rents are held in common; as the statute makes all the property of the wife her “separate property/’ a technical phrase, to which most complete effect will be given if her husband and she be hpld to take by distinct moieties, and as this species of holding will, in the great majority of cases, best effectuate the intentions and convenience of the parties, it would seem to follow that it must have been tire legislative design, where there is no indication to the contrary, to give to the wife a tenancy in common rather than a joint tenancy in choses in action made to both of them. The reasons which induced the court of errors and appeals to hold, and as it seems to me to rightly hold, that the legislature did not intend to abolish tenancy by the entirety do not exist in the case of personal property. The act was designed to protect the wife. She did not need protection so far as the fee of the land was concerned, for her estate was as indestructible as was her husband’s. As to the rents, she did need protection, and so she was held to have obtained a distinct moiety of them. By analogy she should be held to have a distinct moiety in that personal property which was hers only in name, and for so long a time merely as her husband suffered her to enjoy it.

But the same result will follow, so far as the case in hand is concerned, from the application of another rule, much more limited in its application. Certainly there is nothing in the Married Woman’s act to indicate that it was the intention to create a joint tenancy in the case of a married woman where it would not have been held to exist in the case of other persons. If she should be regarded as standing in the same attitude to her husband as to any stranger, she would be entitled to only one-half of the principal and interest, for where the limitation or contract is, in point of form, such as, in ordinary cases, to create a joint tenancy at law, there are. several exceptions to the rule that survivorship will be permitted in equity. Obligations held by traders furnish a familiar instance. And among the other exceptions, an enumeration of which may be found in ElphinsLone on the Interpretations of Deeds (Rule 105, p. *282), is the case of persons advancing money on mortgage. Such persons are, in equity, held to he tenants in common. Note to Lake v. Gibson, 1 Lead. Cas. Eq. *185. Pomeroy (Pom. Eq. Jur. § 408) thus states the rule:

“This equitable doctrine (that equity leans strongly against joint ownership) is always applied to mortgagees. Where money is advanced by two or more persons, no matter whether in equal or unequal portions, and they take a mortgage to themselves jointly, in law their estate is joint and on the death of one the debt and the security would-belong wholly to the survivor. In equity, however, the interest of the mortgagees is in common, and on the death of one the survivor is held a trustee for the personal representatives of the deceased mortgagee.”

The case In the matter of Albrecht, 136 N. Y. 91, is very much ia point, and it is all the stronger because Buttlar v. Rosenblath followed Bertles v. Nunan, 92 N. Y. 152, where it had been decided that a statute very similar to ours had not abolished tenancy by the entirety. In the matter of Albrecht, it was held that where a husband and wife each furnished half the amount of a loan and took as security a bond and mortgage, payable to them jointly, upon the death of one of them the interest of the deceased vested, not in the survivor, but in the personal representatives of the deceased. It was said, “the just inference is that each regarded it as a loan of individual property upon the strength of the security taken, and they became tenants in common of the 'bond and mortgage, with all the rights and incidents of such a relationship,” and see Wait v. Bovee, 35 Mich. 425.

In the case in hand there is not the least evidence that the husband intended to make a gift to the wife. They are both dead. The transaction occurred twenty-five years ago. The evidence is meagre and inconclusive, but it would seem probable, from what is proved, that both advanced some money, and I think the presumption is that they did it in equal shares.

I am of the opinion, therefore, that one-half of the interest due belongs to the representatives of the husband and the other half to those of the wife.


author: Stevens, Y. C.

text:
    William T. Clark v. The Rahway Cemetery Company et al.
    [Decided July 10th, 1905.]
    The object of a cemetery company, as declared in its certificate of incorporation, was to “maintain and use ‘its property’ for cemetery and burial purposes only.” The bill of a lot owner in the cemetery alleged that its property was being uncared for; that its drives and roads were at times impassable for carriages and that it was without funds to pay its debts.—Held, that the company would be enjoined from making a gift of money to a church organization whose members or some of them were also members of the company.'—Held, further, that although the lot owner was not a member of the company, he had a standing to complain of the misappropriation.

      Mr. Charles L. Corbin, for the application.

      Mr. Corra N. Williams, contra.

   Stevens, Y. C.

This is an application to strike out a bill under rule 213. The application is equivalent to a demurrer, and every pertinent fact alleged must be taken as true.

The case is this: The complainant is a lot owner in the cemetery of the Rahway Cemetery Company, and as such seeks to enjoin the company from making a gift of $200 in cash to the First Presbyterian Church of Rahway. The allegation is that the company owes, for notes outstanding, $1,443.54; for unpaid bills, $50.63, and on mortgage, $700; that the notes will soon become clue; that the company has in its treasury $247.31, and that it has not nor will it have sufficient funds to meet these obligations as they mature. It is also alleged that the care and maintenance pf the cemetery has, for some time past, been neglected; that the principal drives and roads are in extremely poor condition and at times impassable to carriages, and that the church has already received $600 from the cemetery company without consideration.

Two. points are taken by the defendants—first, that complainant has no interest in the affairs of the cemetery; second, that the constituent members of the cemetery corporation are members of the church corporation, and that the proceeds of the lands may lawfully be appropriated to the church for its charitable uses.

The first point, viz., want of interest to complain, rests upon the premise that the cemetery company has given a deed conveying the fee-simple of the lot, the conclusion drawn being that complainant, having this separate interest, stands as a stranger to the company and its remaining lands, and is not in a position to' complain of its acts. This contention will require an examination of the status of the company and of the terms of the conveyance, which are not those of the ordinary bargain and sale deed.

The cemetery is not incorporated under the act relating to rural cemetery associations, but under the act to incorporate associations not for pecuniary profit (P. L. 1898 p. 422), an act not very well adapted to the object in view. This act, in its first section, provides that “any five or more persons who shall desire to associate themselves for any lawful purposes, oilier tfian for pecuniary profit" may make and file a certificate pursuant to its provisions.

In its second section it provides that this certificate may contain provisions prescribing the qualification of officers and members, and any other provision for the regulation of the business of the association, and any limitation or regulation of the powers -of the corporation not inconsistent with law. By section 3 the company is authorized to take and hold, by gift or purchase, real and personal property.

The certificate of the Rahway Cemetery Company declares that the object of the incorporation is to acquire by grant the property held by the First Presbyterian Church of Rahway, used by it for cemetery and burial purposes, and to maintain and use such property and any property it might thereafter acquire. The business is to be conducted by a board of trustees, elected at the annual parish meeting of the church. These trustees are to be chosen from such persons as may be eligible as trustees of the church, and they are to be voted for, not by the lot owners, but by such persons as may be qualified to vote at parish meetings.

As under the act of 1898 the trustees are required to be elected by the members of the association, it would seem as if it had been intended that the members should be those persons only who are qualified to vote at the parish meetings of the church. Possibly this may have been the very reason why the association was not incorporated under the Eural Cemeteries act, for that act gives to the lot owners the privilege of electing the trustees (Gen. Stat. p. 352), and this the church may not have wished.

The situation would seem to be this: The trustees elected by the parish voters were, under the certificate of incorporation, a board entrusted with the duty, first, of acquiring the cemetery property from the church, and then, of maintaining and using it “for cemetery and burial purposes only.” They were prohibited, by the act of 1898—the law of their, being—from conducting the company^ affairs “for pecuniary profit.” Talcing these two fundamental provisions together, it would seem inevitably to follow that, as the members could not make for themselves a profit out of the sales of lots or other revenue of the cemetery, neither could they make a gift of their revenue to another and independent corporation.

The allegation of the bill is that the trustees propose to make a gift of money to the church while without funds to pay even that which they owe and while permitting the cemetery drives and roads to go uncared for. This is such a manifest breach of duty that the only question is whether the complainant is in a position to complain.

Now, what is the object of this cemetery company? That is stated in its certificate:

“The object ana purpose of the corporation is to maintain and use (‘the property acquired from the church’) and any property it may hereafter acquire * * * for cemetery and burial purposes only.”

What are these purposes? Manifestly the decent care of tile departed. The company itself is not only to use the property for burial purposes, but also to maintain, it for those purposes. The by-laws make it the duty of the committee on grounds to examine the condition of the grounds, buildings and property, and to report what work and improvements are necessary to be done. There is to be a superintendent elected, who shall have control of the cemetery under the instructions of the president and trustees. He is not only to arrange for the sale of lots, but to collect charges for their care and for interments and for the use of the receiving tomb. All this indicates in the clearest possible way what, in fact, its name alone would imply, that the association is not a company for the sale of lots for pecuniary profit—a thing forbidden by the law of its incorporation—but for the proper care of the resting places of the dead. But who has so much interest in this as the lot owners? The question, then, would seem to be, is the lot owner debarred from asserting that interest' by the terms of his deed ? The deed conveys

“that certain plot of land in the cemetery of the said, corporation * * * laid down and designated on the map of said cemetery as lot No. 408 of burial plots * * * bounded north by Linden circle drive, east by Holly drive, south by lot No. 409, west by Rose walk, to have and to hold * * * for the interment of the dead and for the only and sole purpose and use of a burial ground forever.”

It is then provided that “the lots in said cemetery shall be indivisible” without the written consent of the board of managers, “nor shall any person sell the privilege of making interment to any other person whatever in any lot without the consent of the managers.” And the conveyance is “subject to such rules and regulations as the trustees thereof have or may adopt respecting the said cemetery and its management.” It will thus be perceived that the deed operates to restrict not merely the use of the lot sold, but of all the other lots remaining unsold. The remarks of Justice Blackburn, in Queen v. Abney Park Cemetery Co., L. R. & Q. B. 519, seem precisely applicable. “The real state of the case appears to be that the company has granted the legal estate upon certain trusts and the purchasers have the use of the plots for the purpose of making graves, subject to the company’s regulations. The effect is that the legal estate is outstanding, for it is vested in the purchaser; but, nevertheless, by the terms of the grant, the company are in occupation of the plots of ground which they have sold.” New York Bay Cemetery Co. v. Buckmaster, 49 N. J. Law (20 Vr.) 449. It would seem plain that under the joint operation of the certificate of incorporation, of the by-laws and of the deed itself, the purchaser is not the isolated owner oí a fee-simple absolute of a lot over which he has entire control as such, but a person who has acquired a limited interest in a plot which is part of one connected whole, that whole being conducted, maintained and managed by trustees for the benefit of himself and of those similarly situated. His interest is, in some degree, that of a beneficiary of a trust, and I cannot imagine why he should not have the right to complain if that is being violated to his prejudice. Here the direct tendency of the acts complained of is to imperil the lots remaining undisposed of; to depreciate the value of the cemetery lots as a whole; to prevent needed improvements, and to render access to complainant’s lot more difficult. The allegation is that at times the drives and roads are impassable to carriages. In an analogous class of cases a much smaller interest is held to give a standing to complain. Beecher v. Newark, 65 N. J. Law (36 Vr.) 309; Morris & Cummings Dredging Co. v. Jersey City, 64 N. J. Law (35 Vr.) 147, 588.

I may add that I have examined the cases cited by counsel and such others as I .could find. They lend but little assistance, as each was decided on a state of facts differing materially from the facts of this case. I may, however, say that the reasoning in Close v. Glenwood Cemetery, 107 U. S. 466, and New York Bay Cemetery Co. v. Buckmaster, 49 N. J. Eq. (4 Dick.) 440, goes to support the conclusion reached.

The other point made by counsel is substantially covered by what has been said. The proposition that, inasmuch as the members of the cemetery company are members of the church, the proceeds of the sale of lots may bo appropriated to the church, is untenable. While the membership of each organization may be to some extent identical, the organizations themselves are in legal contemplation distinct. Their objects are different. Bach must pursue its own object as it finds it in the instrument or charter to which it owes its being. The declared object of the cemetery company is “to maintain and use fits property’ for cemetery and burial purposes only.”


author: Stevens, V. 0.

text:
    John C. Howell v. Emma Westbrook.
    [Filed July 21st, 1905.]
    1. Testator bequeathed to his wife the interest arising from forty-six shares of bank stock and empowered his executors to pay the said interest to her “as the same shall be declared by said bank.”—Held, that the wife was entitled only to dividends declared, not to dividends earned.
    2. Testator devised and bequeathed as follows: “I do give and devise unto all my brothers and sisters and their representatives, after the decease of my wife, the house and lot left in trust to her and also the bank stock left in trust to her, to be equally divided, share and share alike.” The sisters died leaving issue.—Held, that the word “representatives” was substitutionary and meant, having reference to the context, “next of kin under the statute of distributions.”

      Mr. John L. Swayze, for the complainant.

      Mr. Allen R. Shay, Messrs. Yreeiland, King, Wilson & Yreeland and Mr. Theodore Simonson, for the defendant.
   Stevens, V. 0.

Two questions arising under the will of Henry Dildine, who died in 1874, have been propounded to me.

First. Testator bequeathed (inter alia) to his wife the interest arising from forty-six shares of the capital stock of the Merchants National Bank of Newton, and empowered his executors “to pay the said interest to my wife Lydia as the same shall be declared by said bank.” The widow died in February, 190Ó. It appears to me that what the testator intended was that the wife should have such dividends as were declared. It is said in Thompson on Corporations, § 22.1&, that the enhanced price for which stocks may sell by reason of dividends earned, but not declared, enures, under the modern rule, to the benefit of the remainderman. How far, if at all, this rule is modified by what has been decided in Van Doren v. Olden, 19 N. J. Eq. (4 C. E. Gr.) 176; Ashurst v. Field, 26 N. J. Eq. (11 C. E. Gr.) 1; Van Blarcom v. Dager, 31 N. J. Eq. (4 Stew.) 783; Lang v. Lang, 157 N. J. Eq. (12 Dick.) 325, I need not consider, for, as I understand the language of the will in question, the gift to the wife is expressly limited to dividends declared. Everything else goes to the remaindermen.

Second. Testator devised and bequeathed as follows:

“I do give and devise unto all my brothers and sisters and their representatives, after the decease of my wife, the house and lot left in trust to her, and also the bank stock left in trust to her, to be equally divided, share and share alike.”

The sisters, three in number, all died in testator’s lifetime, leaving issue, and the question is, who takes under the words “or their representatives ?” I have so recently considered this question in Howell v. Gifford, 64 N. J. Eq. (19 Dick.) 180, that I shall not attempt to repeat here what I said there. Among the cases cited in the opinion is King v. Cleaveland, 4 De G. & J. 477, which seems to be on all fours with the case at bar. I think the word “representatives” is substitutionary, and means, having reference to the context, “next of kin under the statute of distributions.”


author: Gkey, Y. C.

text:
    Mahlon F. Ivins, administrator, &c., v. C. Albert Jacob, trading, &c.
    [Decided May 16th, 1905.]
    Where the demurrant, by a misstatement of the allegations of the bill demurred to, introduces a new statement of facts into the record, and, on the facts thus brought in by himself, demurs to the bill, his pleading is a speaking demurrer, and cannot be sustained.
    On bill and demurrer to part thereof.
    The bill of complaint in this cause is filed by the administrator of the estate of Eichard Mason, deceased. Mason, in his lifetime, was engaged in Camden, in this state, in the business of selling and renting pianos with the privilege of purchase.
    The bill alleges that the defendant, trading in the name of Jacob Brothers, a piano firm in the city of Yew York, claims to have a debt against the estate of Mason for pianos sold to Mason in his lifetime, which the complainant has been led to 'believe from Mason’s books is as follows: Money due for pianos which were delivered to Mason and by him sold on leases, about $17,192.18, and for moneys loaned by Jacob Brothers to Mason in his lifetime, about $4,200.
    The bill proceeds as follows to state the mode in which the business between Mason and the defendant was conducted:
    “And your orator further shows that, from time to time, as the said Mason bought pianos of the said O. Albert Jacob trading as Jacob Brothers, and as soon as the said Mason had put the same out on leases, he assigned each lease so made by him with the purchaser of each piano to the said Jacob Brothers, to be held by the said Jacob Brothers as collateral security for the payment of the amount due the said Jacob Brothers for said piano; that said Mason was accustomed to make weekly or monthly remittances to the said Jacob Brothers as the moneys for each piano leased should be paid to him, the said Mason, and that the said Jacob Brothers were accustomed to and did surrender each lease to the said Mason as fast as the amount due thereon was paid by the said Mason, and that said Mason was accustomed to and did collect the balance of the moneys due upon said leases from the persons who had purchased the same from the said Mason, and retained for his own benefit the profit over and above what was paid by him-to the said Jacob Brothers for the wholesale price charged by them.
    “And your orator further shows that,. for a short time prior to the said Mason’s death, the said Jacob Brothers failed to return leases covering pianos, the full wholesale price of which had been paid by the said Mason, claiming to hold the same as collateral security for the payment of the loan so claimed to have been made by the said Jacob Brothers to the said Mason.”
    The bill further alleges that the complainant, upon undertaking the administration of Mason’s estate, attempted to make collections upon the leases made by Mason and “assigned as collateral to Jacob Brothers as aforesaid;” that the lease accounts appear on Mason’s book as an asset of his estate; that the defendant, instead of permitting the complainant to make the collections upon the leases, and to make remittances “in accordance with the agreement and practice prevailing during the lifetime of Mason,” forbade the complainant to touch those funds, and proceeded to make the collections himself upon the leases, and gave notice to the lessees that if they paid the lease money to the complainant he, the defendant, would hold them liable therefor.
    The bill further alleges that the defendant has filed no claim against Mason’s estate; has not accounted for the leases in his possession, or for the moneys by him collected thereon; has refused to disclose the number and names of the leases in his possession, and has stated that he would hold the leases and make all collections thereon until he had paid all the indebtedness owing to him by Mason’s estate.
    The bill further charges that
    “notwithstanding the fact that the said leases may have been surrendered to the said Jacob Brothers, by the said Mason in his lifetime, yet the said Mason himself made collections and made remittances to the said Jacob Brothers, retaining all sums over and above what was due the said Jacob Brothers for the wholesale price of each piano; that said Jacob Brothers never claimed or assumed the right to control the collections upon the said leases or to retain from said collections the profits due the said Mason upon the sale by him of said pianos; but, on the contrary, assumed such arbitrary power without legal right or authority immediately upon the death of the said Mason, without giving your orator the opportunity to make collections and remittances as had been done in the lifetime of the said Mason.”
    •The complainant prays that the defendant may discover.the amount due him from the estate of Mason, what leases are in his possession, when delivered, and on what terms; that he may produce the leases; that he may be restrained from collecting on any leases assigned to him by Mason, and from disposing of them, and from interfering with the complainant in his collections of moneys due on said leases, &c.;
    “that the defendant may account for all moneys collected on said leases since Mason’s decease; that a receiver may be appointed to assume the collection of the moneys due under said leases, and to distribute the same under order of this honorable court to those rightfully entitled thereto, and for further relief.”
    The defendant demurs to part of complainant’s bill and answers the residue, and hies also a cross-bill for affirmative relief against-the complainant.
    The only matter now under consideration is the demurrer, which has upon notice come on for argument. The demurrer is addressed to so much of the bill, as prays that the defendant- may be restrained from collecting on any leases held by defendant under assignment from Mason in his lifetime, and from disposing of them, and from interfering with the complainant as administrator of Mason’s estate in his collection of the moneys due on said leases, and that a receiver may be appointed to assume the collection of the moneys due under said leases, &c., and to distribute the same to the persons rightfully entitled- thereto, &c.
    The cause of demurrer assigned is that the complainant has not stated such a case as entitles him to the relief prayed for, or to any part thereof, because it appears by the bill that the leases therein referred to were assigned to the defendant as collateral security for a certain debt; that at the time of Mason’s death his books showed that he was indebted to-the complainant for

      “money due for pidnos delivered to Mason and by him sold on leases as aforesaid about $17,192.18; 'for money loaned by defendant to Mason in his lifetime about $4,200
    that the bill alleges the leases were assigned to defendant as collateral security for the above-stated indebtedness, and the bill does not allege that any part of said indebtedness has been paid by complainant, or anyone for him, to defendant; that the bill does not charge defendant with insolvency or fraud, and discloses no basis whatever for the appointment of a receiver and the taking from defendant the control of his collateral security, when the bill shows an unpaid indebtedness of Mason’s estate to defendant exceeding $21,000, to secure which indebtedness said collateral security was assigned to defendant; on this part of the bill of complaint the defendant, by his demurrer, &c., prays judgment.
    On this demurrer the cause has been set down for argument.

      Messrs. Wilson, Garr é Siachhouse, for the demurrant.

      Mr. Henry F. Stoclcwell and Mr. J. Willard Morgan, for the complainant.
   Gkey, Y. C.

This demurrer is framed and has been argued upon the assumption that the bill of complaint alleges that the Mason estate presently owes to the defendant an unpaid indebtedness exceeding $21,000, and that to secure this indebtedness, the piano leases and the moneys payable thereon were by Mason, in his lifetime, assigned to the defendant.

For the purpose of this hearing, the facts narrated in the bill of complaint are by the demurrant admitted to be true in the manner .and form in which the complainant there states them. Facts not stated in the bill of complaint, or variances of those which are stated, cannot be presented by the defendant as the basis of a demurrer.

The averments of the bill of complaint do not set forth the complainant’s case with definite precision. Nevertheless, a careful reading of the portion of the bill of complaint demurred to will show that the defendant, in stating his grounds of demurrer, has misrecited the averments of the bill in order to challenge its legal sufficiency.

It is not alleged by the bill that the leases were assigned as collateral security to secure all the several items of indebtedness of Mason to the defendant, amounting in their total to $21,000. What the bill alleges is that the defendant claims that Mason, in his lifetime, was indebted to the defendant in several sums of money, to wit, for moneys' due the defendant for pianos delivered to Mason, and by him sold on leases, $17,192.18, and for moneys loaned by the defendant to Mason in his lifetime, $4,200. The bill proceeds to show that by the arrangement between Mason and the defendant, Mason bought each piano from the defendant on credit; he then leased it to the purchaser for a term, reserving monthly rentals, agreeing at its expiration to give to the purchaser a bill of sale for the instrument. Each lease, when thus obtained, was by Mason assigned to the defendant as collateral security for the payment of the wholesale purchase price which Mason owed the defendant for that particular piano; that Mason then collected the rentals, (which were really partial payments of the price to be paid by the lessee-purchaser) as they came due on each piano, remitted to the defendant the wholesale price he had agreed to pay the defendant for that piano, and received from the defendant a surrender or return to him (Mason) of the lease for the piano thus paid for to the defendant. That Mason then proceeded to collect from these purchasers and retain for himself the residue of the rental^ which constituted the purchase price agreed to be paid by the lessee-purchaser. The complainant charges that the defendant has failed to return to Mason leases of pianos for which the wholesale price has been fully paid to the defendant; that the defendant now asserts the right to hold these retained leases as collateral security for the payment of the loan (i. e., the $4,200) which the defendant claims to have made to Mason.

It will be observed that the gravamen of the complaint in the bill is that the defendant, having leases severally assigned as collateral security for the payment of the definitely separate sums respectively due liim on each piano, has misapplied those pledges and wrongfully holds them as collateral security for the payment of another debt, the claimed loan of $4,200. On these premises the bill of complaint prays discovery, an accounting, an injunction to restrain the collection of rentals on the leases, and a receiver to make those collections, &c.

The grounds of demurrer misconceive and misstate the allegations of the bill, for they assume that the bill admits that all the leases have been assigned as collateral security for the payment of the whole indebtedness claimed to be owed by Mason to the defendant, whether for pianos sold or for moneys loaned, exceeding in its total the sum of $21,000, and on this misstatement of the allegations of the bill the defendant demurs to the prayers for injunction and receiver, insisting that upon the bilks own showing he cannot be restrained in the exercise of his right to collect the lease moneys pledged to him to secure the debt owing to him, and that a receiver cannot equitably be appointed for that purpose.

The demurrant, by this misstatement of the allegations of the bill of complaint, has introduced a new statement of facts into the record, and upon the facts thus brought in by himself he demurs to the bill of complaint. Such a pleading is a speaking demurrer and cannot be sustained. Story Eq. Pl. § 448; Edsell v. Buchanan, 2 Ves. Jr. *83; Black v. Shreve, 7 N. J. Eq. (3 Halst.) 440; Teeter v. Veitch, 57 Atl. Rep. 164.

A decree will be advised overruling the demurrer, with costs, with leave, to answer, &e.


author: Grey, V. C.

text:
    Charles T. McMullin et al. v. Sarah N. Doughty et al.
    [Decided July 1st, 1905.]
    Where, in partition, defendant presented claims which were overruled and rejected, such conduct on her part causing substantially all the expenses, it was proper to charge the costs against her, instead of charging the complainants with a proportionate share of the expenses.
    In partition, &c. On motion to tax costs before the master against the defendant Sarah H. Doughty.

      Mr. John D. McMullin> for the complainant, for the motion.

      Mr. Herbert A. Drake, for the defendant Sarah H. Doughty, contra.

   Grey, V. C.

In this partition suit, as collateral to the equal division of the property between the owners according to their several shares, an order of reference was made to a master to take and state an account between the parties to ascertain what was due from either party to the other. This covered claims for cutting, hauling and sawing timber, and other incidents of like nature.'

The master has taken testimony and has stated his account in accordance with the directions of the order of reference. Ho exceptions have been filed thereto.

Dpon the coming in of the master’s report and account, the complainant moved that the costs of the proceedings before the master should be taxed against the defendant Sarah H.' Doughty.

The counsel for that defendant insists that it is a fixed and unalterable rule in actions for partition that all the .costs and expenses must be charged upon the parties or their several shares in proportion to their respective interests, and upon this point cites the case of Coles v. Coles, 13 N. J. Eq. (2 Beas.) 366. A careful reading of that case will, I think, show thkt the chancellor’s declaration that the costs of the partition should be charged upon the several shares in proportion to their respective values referred to cases in which the defendant concurs in the partition proceedings. It is based upon the idea that all parties to the suit are in that case presumed to be proportionately benefited by all the steps in which costs are incurred.

On page 368 of that case the chancellor declares in substance that if the complainant’s rightful claims are opposed on any ground unsuccessfully, the defendants will be compelled to pay the costs.

To hold that in every case costs must be divided proportionately would enable a defendant to gratify a hostile spirit by raising useless questions and insisting upon unjust claims and persistently litigating them. Although the adverse party might successfully and rightfully resist the unjust claims, he would yet be compelled to pay a ratable share of the expenses of the effort to wrong him.

The declaration^ of Chancellor Green in the case of Coles v. Coles, in my view, were not statements of a hard and fast rule, binding upon the court, but rather of the course of practice which in a given ease the court would follow in the exercise of a discretion vested in it' to award costs or not, according to the equity of the particular matter which happened to be before it.

In this case the litigation has been conducted in a hostile and persistent manner by the defendant Sarah E. Doughty. An examination of the proceedings before the master in this case will show that substantially all of the testimony, time and incidental expenses of the hearings before him were occasioned by the presentation of claims on the part of the defendant Sarah E. Doughty which were overruled and rejected. Under such circumstances it would be highly inequitable to charge the complainants with a proportionate share of the expenses of a litigation unnecessarily forced upon them, in which they were successful.

The motion of the complainant that the costs of the suit' before the master should be charged against the defendant Sarah 1ST. Doughty should be sustained.