author: Per Curiam. Collins, J.

text:
    The Chesapeake and Ohio Railway Company, complainant and appellant, v. Francis J. Swayze, receiver, defendant and respondent.
    [Filed November 1st, 1901.]
    1. A party who applies to this court for, and obtains the appointment of, a receiver for an insolvent corporation, and the vesting of the title of the assets thereof in such receiver, will not be permitted by this court to take proceedings in a foreign jurisdiction to obtain a prior lien on those assets for his own debt.
    2. It is no objection to the exercise by this court of its preventive remedy in such a ease that the party is not within its territorial jurisdiction. By. bringing suit in this court to subject the assets to its jurisdiction the party subjects himself to its jurisdiction, for all purposes, pending the administration of those assets.
    On petition of Francis J. Swayze, receiver, for injunction against the Chesapeake and Ohio Railway Company.
    On Januaiy 2d, 1899, upon a bill filed in this court by the Chesapeake and Ohio Railway Company, a foreign corporation, receivers were appointed for the Atlantic Transportation Company, a New Jersey corporation. Among the assets of the Atlantic Transportation Company were certain sea-going barges used in the transportation of coal between Newport News, in Virginia, and eastern ports. At the time of the appointment of the receivers, four of these vessels, including the “West Virginia” and “Woodside,” were actually at Newport News and had been attached there on December 31st, 1898, at the suit of the Knickerbocker Steam Towage Company. The “West Virginia” and “Woodside” were subject to a mortgage, given some time prior to the attachment, to the Western National Bank of New York.
    Upon the day the receivers were appointed in this court, the Atlantic Transportation Company conveyed by a bill of sale all of the vessels, including the “West Virginia” and “Woodside,” to the receivers, in pursuance of the order of this court.
    On January 5th, an ancillary bill was filed by the Chesapeake and Ohio Railway Company in the circuit court of Newport News, setting up the appointment of the receivers in New Jersey and praying that they be appointed receivers in-Virginia. On the same day the circuit court of Newport News appointed the New Jersey receivers, receivers in Virginia. The order appointing them recited that the appointment was made “in support of and ancillary to the appointment by the court of chancery of New Jersey.” The order further directed that the officer having possession of the vessels under the attachment should deliver them to the receivers upon the execution of a bond conditioned to indemnify the plaintiff in attachment from loss or damage caused by the transfer of the vessels to the receivers.
    On January 6th, the receivers gave such a bond and the vessels were released by the officer. In pursuance of an order of this court, the receivers continued the business of the insolvent corporation, using for that purpose the vessels in question.
    On May 22d, the chancellor restrained the receivers from removing certain vessels, including the “West Virginia” and “Woodside,” except to some place within the jurisdiction of the court of chancery. The “West Virginia” was then at Providence, Rhode Island, and the “Woodside” was at New York City.
    On May 25th, the circuit court of Newport News, upon the petition of the receivers, directed that they deliver possession of the vessels to the sergeant of the court, to be by him held by virtue of the attachment of December 31st, 1898, in favor of the Knickerbocker Steam Towage Company. The order directed that the transfer was to be without prejudice to the rights of the Towage Company upon the bond given by the receivers on January 6th.
    On June 12th, the chancellor vacated the injunction of May 22d, and on June 13th he directed that the Western National Bank, the mortgagees, might apply to the proper tribunal in Virginia, to take- possession of the vessels, with or without notice to the receivers, and ordered the receivers to facilitate, in every reasonable and proper manner, the granting of the application.
    On July 3d, a petition was filed by the Knickerbocker Steam Towage Company for the removal of the receivers in New Jersey. Pending this application, on August 26th, the Chesapeake and Ohio Railway Company filed a bill in equity in the circuit court of Newport News, alleging that the mortgage of the Western National Bank was invalid as to indebtedness held by the railway company, and praying that the railway company might have judgment for the indebtedness and an attachment against the vessels, including the “West Virginia” and “Wood-side,” to secure its claims. On the same day the vessels were attached in the last-mentioned suit.
    On September 2d, an amended bill was filed in the receivership suit in Virginia originally begun on January 5th by the Chesapeake and Ohio Railway Company, charging that the mortgage of the Western. National Bank on the “West Virginia” and “Woodside” had never been recorded in pursuance of law and was invalid as to all creditors of the Atlantic Transportation Company who had no actual notice of the same. The amended bill set up an indebtedness of the Atlantic Transportation Company to the Chesapeake and Ohio Coal Agency Company; the assignment of that indebtedness to the Chesapeake and Ohio Railway Company, and that the Chesapeake and Ohio Coal Agency Company had no actual notice of the mortgage until after the affairs of the Atlantic Transportation Company were put in the hands of receivers. The amended bill prayed that judgment be awarded to the complainant for its indebtedness and that the mortgage debt be declared invalid as to said indebtedness.
    On September 12th; 1889, the receivers in New Jersey resigned, and Francis J. Swayze was appointed receiver, the former receivers being directed to transfer to him all assets, which they accordingly did by bill of sale dated on that day.
    On September 23d, the former receivers resigned as receivers in Virginia, and Swayze applied to be appointed ancillary receiver there. This application was denied by the Virginia court, which refused to appoint any receiver.
    On September 28th, Swayze, as receiver, filed a petition in this court, in the receivership suit, for an injunction, setting up the proceedings in the case, and charging that the “West Virginia” and “Woodside” were in the possession of the former receivers prior to the Virginia attachments of the Chesapeake and Ohio Railway Company of August 26th; that the vessels were returned by the receivers to Virginia from northern waters solely for the purpose of enabling the former receivers to discharge themselves from liability on the bond to the Knickerbocker Steam Towage Company; that the attachments of the Chesapeake and Ohio Railway Company in Virginia were levied after the appointment of receivers and after the title to the property had vested in the receivers and were an unwarranted interference of the Chesapeake and Ohio Railway Company with the powers of the receivers, and embarrassed the petitioner in the execution of his duties. The petition charged that the vessels were depreciating and being destined; that maritime liens were accumulating and that the interest of all parties required that the receiver should have speedy possession and hold and dispose of the vessels under the order of the court of chancery. The prayer was for an injunction restraining the Chesapeake and Ohio Railway Company from proceeding with the Virginia suits; from setting up any lien by virtue of their attachments, or otherwise, and for an order requiring them to release the vessels from any lien they might have acquired, and to cause the same to be delivered up to the New Jersey receiver.
    The answer of the complainant, the Chesapeake and Ohio Railway Company, to this petition admits the facts as therein stated and admits that the vessels are deteriorating in value, but insists that they should be sold by order of the Virginia court. It expressly denies the jurisdiction of the court of chancery to make the order prayed for.
    Pitney, V. C. (orally).
    My view of this case has been very briefly and accurately stated by the receiver in his argument. The receiver has no partisan views in this case, except to get the property for the benefit of the creditors. He is a quasi judge in the matter, and the court always listens to his views, because they should be impartial; and I mention that not because I adopt his views on that ground, but because they were judicious, and struck me as such as he was stating them.
    The case stands in this wise: The Atlantic Transportation Company, on the 3d day of 'January, 1899, was possessed of a number of sea-going vessels; some of them were barges which were towed, but they were sea-going vessels as I understand it; there is no dispute about that. The business of the Atlantic Transportation Company, as shown by the papers, was that of transporting coal from the terminus of the Chesapeake and Ohio railroad, at Newport News, near Port Monroe, Virginia, to different ports to the north and east of that port; and two of the vessels happened, at the date named, to be in Virginia waters. They went there in the regular course of business. So far as appears they had no situs whatever in the State of Virginia, any more than any other vessel that was trading at one of the ports of Virginia had a situs there. On the contrary, the indications are, although there is no specific direct proof to that effect, that their situs, or home port, or place of registry, was either in New Jersey or in New York. The two vessels were, prior to January 2d, 1899, seized at Newport News by an attachment, issued at the instance of a creditor of the Atlantic Transportation Company, the Knickerbocker Steam Towage Company. It had issued an attachment for a debt against the Atlantic Transportation Company and seized those two vessels, and they were in the hands of the sergeant of Newport News, an officer of that Virginia court.
    On the 2d of Januarjr, 1899, the Chesapeake and Ohio Railway Company, a corporation of the State of Virginia, I believe, filed its bill in the court of chancery of New Jersey, praying the appointment of a receiver of the Atlantic Transportation Company, on the ground that it was insolvent. Two gentlemen, named by the Chesapeake and Ohio Railway Company, were appointed receivers — General Meaney and Mr. Ingalls, a son of the president of the Chesapeake and Ohio Railway Company. The Atlantic Transportation Company, by a proper bill of sale, immediately made a deed of those two vessels, with others, to the receivers, whereby their title, in my judgment, was perfected, and did not require the aid of any court of any other state to perfect it; precisely as if the ships had been lying at a dock here in New Jersey. But such title was subject to the attachment in Virginia, and of course the receivers could not get the possession of the vessels from the sergeant, or marshal, the officer of the court, who had possession of them, without taking some proceeding. It was thought proper, therefore, that the receivers so appointed should be appointed ancillary receivers by the Virginia court. There may have been other assets in the shape of rights and credits in Virginia — I know nothing of that — there may have been many reasons why they should have been appointed ancillary receivers in Virginia, besides the peculiar situation of these two vessels; because to reach rights and credits which had a situs in Virginia it was necessary to have ancillary receivers appointed there. The Chesapeake ancl Ohio Railway Company filed a bill in a Virginia court January 5th, 1899, of the same general character as that previously filed in this court, and upon its application the same gentlemen were appointed by that court ancillary receivers, and by the order of appointment they were declared to be mere assistants to the receivership in New Jersey where the corporation belonged.
    Subsequently the receivers obtained an order of this court to continue the business of the Atlantic Transportation Company, and to carry it on precisely as if there had been no receivership, ancl for that purpose they desired the possession of these two vessels, ancl in order to get them from the sergeant who had them in possession, and for that purpose only, they gave a bond to the plaintiff in that attachment suit, or to somebody, to answer for those vessels, and took possession of them and brought them from Virginia and had them in New Jersey waters, and used them as if they had never been attached.
    Now, in my judgment, their title to those vessels arose primarily and principally and, I may say, entirely, out of the fact that they were appointed receivers by the State of New Jersey, ancl got a bill of sale from the insolvent debtor. The only aid to their title which arose out of the ancillary receivership was simply to enable them to get the bare possession of the vessels, but did not strengthen their title a particle, for the reason— and I repeat it — -that there did not appear to have been any situs in Virginia, except the incidental one' of their being attached there, as they were lying in the public waters of the United States, in the limits of the State of Virginia.
    Now in that state of things the business of the corporation was continued, and it turned out that there was a claim advanced by the Western National Bank that it held a mortgage, registered in the city of New York, upon these and other vessels; and the United States Trust Company held some mortgages, and the chancellor, on the application of these receivers and of the creditors who held the mortgages, made an order substantially that the vessels should be delivered up to the mortgagees upon payment of some trifling sum, or no sum — I forget how that was.
    Mr. Corbin — Finally no sum.
    The Court — Finally no sum; but the difficulty was that if the receivers delivered up to the mortgagees those two vessels that had been subject to the Virginia attachment they might be liable on their bond that they had given in the attachment suit in Virginia to get possession of them. Therefore the chancellor ordered that they might and should, in ease of their bond, and to relieve them from its effect if possible, re-deliver those vessels to the sergeant in Virginia, and they did so. At the same time they got an order of the Virginia court which states distinctly on its face that they were delivered to that sergeant simply for the purpose of that attachment. It was no relinquishment of title whatever, except, it may be, between them and the mortgagees. As between them and the mortgagees, it having been done in pursuance of the order of the chancellor for that purpose, it may hereafter be claimed by the mortgagees that that delivery was for their benefit; but for present purposes I will put the mortgagees out of view. And if you put the mortgagees out of view then that delivery did not at all affect the receivers’ title. It simply helped them as a defence to any action of the bond they had given to get possession.
    Things remained in that shape until the 26th of August, when the Chesapeake and Ohio Railway Company, the complainant in this suit, filed an attachment bill in the Virginia court, on the equity side, attaching these ships, on a claim of debt that they held against the Atlantic Transportation Company.
    Now, right here, that conduct was entirely contrary to first principles, in my judgment. They had no right to do it. It was a contempt of this court. It was flying in the face of this court. They had come here and asked this court to appoint receivers to take these vessels and administer them for the equal benefit of all creditors, and they turn around in the face of that and attempt to get a lien for tlieir own individual benefit. Now I repeat, that conduct was contrary to fundamental principles on which the courts deal with such cases. So held by all the authorities. Mr. McCarter handed me up the other day a list of cases on the subject, and among them is the one in Vermont, decided by Chancellor Royce (Vermont and Canada Railroad Co. v. Vermont Central Railroad Co. et al., 46 Vt. 792), which contains a very able and complete review of all the authorities, citing some in various states and in England; and there is also the Rhode Island case (Chafee v. Quidnick, 13 R. I. 442). I shall not go into them, except to merely refer to the Vermont case, which is so exhaustive that it really leaves nothing to be desired in the way of discussion. The bringing of that action by the Chesapeake and Ohio Railway Company was a contempt of this court, in my judgment; and if this proceeding were one to adjudge the Chesapeake and Ohio Railway Company in contempt I should do it.
    Then the mortgagees, the Western National Bank, filed a petition in this court for leave to take possession, I believe, and for an injunction against the Chesapeake and Ohio Railway Company.
    Mr. McCarter — That petition was only for an injunction.
    The Court — -Oh, yes. But after you had filed a petition for leave to take possession the Chesapeake and Ohio Railway Company filed an amendment to the original insolvency bill filed on the 5th of January in the Virginia court; and in that amendment they set up that the mortgage of the Western National Bank is void, without, as I understand, stating on what ground it is void. Then by that bill they pray that it may be declared void, and in effect pray that they may have the proceeds of the sale of those vessels for their own benefit. It is now said by counsel that that amendment has been amended, so that the bill is filed for the benefit of all of the creditors. And they say they have jurisdiction of those vessels because they are in Virginia waters, as against the mortgagees, the Western National Bank; which compels the Western National Bank to go down there and litigate that question.

      Now I very much doubt whether they have any such possession as will give them such jurisdiction, and it is very desirable that that question should be raised where the court will have undoubted jurisdiction. As I understand, the Western National Bank has declined to accede to that jurisdiction; has not appeared in that court. I don’t know whether it is made a party or not, or whether process has been issued against it, or whether there has been any publication or anything of that kind.
    Mr. Swayze — I think there is an order of publication or something like that, but I am not sure; there is no process — no appearance.
    The Court — In the meantime the two receivers who had acted in this case (and the evidence before the court shows that they were acting all the time entirely in the interest of the Chesapeake and Ohio Eailway Company, I am justified in saying that), were proceeded against for their removal, and when the order to show cause why they should not be removed came on for argument they resigned, without waiting for an inquiry into the merits, and promised to resign as ancillary receivers in Virginia, and did do so, and were relieved by both courts. The court of chancery of New Jersey then appointed Mr. Swayze, the present receiver, in their place. In the meantime, however, Mr. McCarter, on behalf of the Western National Bank, had filed a petition for an injunction against the Chesapeake and Ohio Eailway Company to restrain them from proceeding with those suits in Virginia. When the new receiver was appointed he came in and took the case up himself, and filed a petition on his own account, which the Chesapeake and Ohio Eailway Company have answered under protest,' denying the jurisdiction of this court; and the matter is now before me on that petition.
    I shall not at present take any notice of, or deal with, Mr. McCarter’s petition on behalf of the Western National Bank. The question now is whether the court of chancery can permit the Chesapeake and Ohio Eailway Company to do anything whatever to [prevent the receiver it has appointed from getting-possession of these vessels; and I am decidedly of the opinion, notwithstanding the very able argument that has been made by Mr. Corbin, for which I am certainly very much obliged— I am decidedly of the opinion that this court should take prompt and thorough action as far as it can to prevent that proceeding on the part of the Chesapeake and Ohio Railway Company. The only ground on which I can see that the Virginia court can hold these vessels, with any kind of respect for propriety in judicial proceeding, is on behalf of the Knickerbocker Steam Towage Company. Now it was stated here by respectable counsel from Virginia that he, on behalf of that steam towage company, had given a consent to the sergeant or marshal to let these vessels go; that there was no reason, so far as the steam towage company went, why the marshal should not be.permitted to deliver possession of them. And that being so, the only thing in the way of the receiver getting possession is the. action of the Chesapeake and Ohio Railway Company.
    The question of jurisdiction of the Virginia court does not arise here, because, whatever jurisdiction it may have, it can exercise only at the suit of somebody. There must be somebody there asking for its exercise, and the only person asking for it, .so far as this court at this time perceives, is the Chesapeake and Ohio Railway Company; and this court will forbid the Chesapeake and Ohio Railway Company to ask the Virginia court to retain those boats.
    Of course the receiver has to deal as best he may with the steam towage company, the original plaintiffs in attachment there. That we have nothing to say about. The Chesapeake and Ohio Railway Company is not responsible for that.
    Objection is made to any action by this court against the Chesapeake and Ohio Railway Company on the ground that it has no jurisdiction of that company. I think the objection is without merit. The very point is r, ■, ^red by the Rhode Island case above cited. There a distinguished counsel from New York and a distinguished counsel from Boston united in making application, as counsel merely, in favor of a client, to the Rhode Island court to appoint a receiver of an insolvent company, and after such receiver was appointed on their application one of the gentlemen assigned to the other his claim against the insolvent company for services, and the assignee issued an attachment in New York and levied upon certain funds belonging to the insolvent company in the hands of a merchant there. The matter being brought to -the attention of the Rhode Island court it adjudged that counsel in contempt, on the ground that though not within the jurisdiction of the court, he had, by merely acting as counsel, and not as solicitor or attorney, for the plaintiff, submitted himself to the jurisdiction of the court. That case goes much farther than the present.
    But there is another line of cases in the federal courts which I think is of significance here. It is a settled rule in those courts that if a party comes from one circuit into another circuit and brings an action there, and appears only for the purpose of bringing that action, the defendant in that action may file a bill on the equity side as a defence to that action, and acquire jurisdiction of the person by service upon his solicitor, or service out of the jurisdiction, which he could not otherwise acquire. I will give you an illustration of it. One, Trotter, who lived in Brooklyn, New York, brought an action of trespass in the United States circuit court for the district of New Jersey, against the old New Jersey Zinc Company, based upon the title to a strip of land in the zinc district in Sussex county. He obtained a large verdict before Judge Nixon, sitting in the circuit court; and after the refusal of a new trial, I was brought in as counsel by the zinc company. The plaintiff’s title rested upon a mistake — as the defendants alleged — in the description of a deed; and I filed a bill in equity, on behalf of the zinc company, in the circuit court of the United States for the eastern district of New York, to reform that deed and to stay the execution on the judgment. I obtained a preliminary injunction or order, ex parie, from Judge Benedict in the United States circuit court. The judge went abroad, and the order to show cause, answer, &c., came on before Judge Blatchford. I had supposed that I must, of necessity, go into the district where Trotter lived, and that I could not get jurisdiction of him in the New Jersey district; but Judge Blatchford, without going into the merits, dismissed my hill by a short opinion that never was published, in which he pointed out the decisions in the United States circuit court to the effect that in such a case the federal court of New Jersey had jurisdiction, and that the appearance of Mr. Trotter there in his action compelled him to submit to the jurisdiction of that court by a service on his solicitor, without service on him within the jurisdiction, as to all matters arising out of or pertaining to the subject-matter of the suit brought there by him. On the same bill and affidavits I immediately applied to Judge Nixon in the New Jersey district, and obtained an injunction. In the present case the proposed action against the Chesapeake and Ohio Railway Company pertains to the subject-matter of its suit in this court.
    Another objection made is that the vessels should be kept within the jurisdiction of the Virginia court because tire receivers gave bond in that court as such, and may be liable to prosecution there in respect to their possession of the vessels. I think there is nothing in that objection. Those receivers, by the order of this court, and also by the order of the Virginia court, delivered those vessels to the marshal or sergeant, and afterwards by the order of this court conveyed them to the new receiver. They have been discharged from further duty as receivers, by both courts, and I am unable to imagine that they can be charged, as ancillary receivers, with any breach of their bonds given in the Virginia court. But if such a breach should be averred, it seems to me that this court has complete power to protect them in the premises.
    I will advise an order, made as strong and as searching as counsel can draw it, forbidding and restraining the Chesapeake and Ohio Railway Company from doing anything in any suit, or taking any measures whatever, either directly or indirectly, to prevent the receiver, Mr. Swayze, from taking possession of those vessels. I don’t see that I can go any further to-day.
    After an order made in pursuance of the foregoing opinion, Mr. Corbin, on behalf of the Chesapeake and Ohio Railway Company, asked for a stay of the order pending an appeal, which the vice-chancellor declined, saying:

      It seems to me that it comes out just where I stated before you proceeded with your argument, that the preservation of the status quo, so far as regards the rights of all parties — and that is the thing to look at — will be preserved; the status quo will be preserved by letting the. receiver have those vessels and selling them and turning them into money, to prevent them from deteriorating by the action of the water. I believe it was stated by you, or admitted by your answer yesterday, that those vessels are deteriorating in value all the time.
    Mr. Corbin — They ought to be sold, there is no doubt about that.
    The Court — If so, what better could be done to preserve the rights of everybody, the status quo — to use, I suppose, the subtance of the language of the late chief-justice in his opinion which has caused so much criticism — what could be done better than to sell those vessels and impound the proceeds? Here is the subject-matter — the proceeds of the sale of the vessels. This court gets the money proceeds here in the hands of its receiver. The court of errors and appeals decides that it ought to go to somebody down in Virginia — to a new receiver to be appointed there. This court will obey the order of the court of errors and appeals, and send the money back to Virginia. The .thing is preserved. The right of the Virginia court is also preserved. Because if it appears that the Chesapeake and Ohio Railway Company has a right to prosecute that suit in Virginia — as soon as the court of errors and appeals so decides — this receiver is ordered to return the fund and the court of errors and appeals will direct the court of chancery to restore the corpus to the Virginia courts.
    I think it eminently a case where the whole spirit of the law, which has been exemplified in New Jersey by the Hational Docks case, and which has been attempted to be — I desire to compliment the gentleman on his draft of that act — has been attempted to be put in writing, but which is beyond the power of mortal man to do, precisely as it is beyond the power of mortal man to codify the laws of any progressive country — requires that the order I have advised should be executed by bringing the property in question into this state and turning it into money. And what have we got here? The subject-matter of dispute is two vessels, two sea-going barges, and the question is who is to dispose of those barges — the courts of New Jersey or the courts of-Virginia? It is admitted on all hands that the barges should be taken care of by being sold and turned into money. This court is of the opinion that it is the business of this court to do it, and not the business of the Virginia courts. This court so decides, and in the meantime let the barges be sold, and if the money is in the hands of this court, and the court of errors and appeals shall be of opinion that this court is wrong, the money will be returned. The subject-matter will be there — saved— and preserved as thoroughly as it possibly can be. Now that is the situation. And for these reasons I decline to stay the operation of the order in any way pending the appeal.

      Mr. Charles L. Corbin, for the appellant.

      Mr. Edward M. Colie, for the respondent.
   Per Curiam.

The decree appealed from is affirmed, for the reasons given by Vice-Chancellor Pitney in the opinion below for advising it.

Collins, J.

(dissenting).

It cannot be successfully gainsaid that any Virginia creditor of the defendant, who had not voluntarily submitted to the jurisdiction of the New Jersey court of chancery in the insolvency proceeding, might properly have taken the action in the Virginia court that is reprobated by the learned vice-chancellor because taken by the complainant in that proceeding. The vessels attached were solely within the Virginia jurisdiction. They were so at the time the bill in insolvency was filed here, and for that' reason, and for that reason only, an ancillary bill and receivership became necessary there. They never left that jurisdiction except in custodia legis, and at the time of the attachment in equity their original status had been restored by procedure acquiesced in by the New Jersey court of chancery. True, the title of the defendant as mortgagor had passed to the principal receivers, but possession had not been obtained and the New Jersey court had no jurisdiction or means of compelling jurisdiction over the mortgagees. Had the ancillary receivers obtained possession of the vessels, they could not have transferred jurisdiction over them to the principal receivers. Reynolds v. Stockton, Receiver, 16 Stew. Eq. 211; 140 U. S. 254. That the same persons were both principal and ancillary receivers is an immaterial circumstance. That the receivers have resigned in both jurisdictions and that only in New Jersey has a successor as yet been appointed is unimportant. The Virginia court must, on application, make an appointment. The case shows that there are Virginia creditors. The Virginia court has the right to administer the assets in Virginia, not to give those creditors an undue share, but to give them their proper share in that state. Our court of chancery has very properly insisted on like right where the situation is reversed. Irwin v. Granite State Provident Association, 11 Dick. Ch. Rep. 244. We should accord the same respect that we exact. The New Jersey receiver, if need be, will be heard in the Virginia court. A Virginia creditor cannot be driven from the home court, and in no other court is jurisdiction to attack the mortgages possible to any creditor unless service upon the mortgagees can be secured. But the learned vice-chancellor thinks that the complainant, although a Virginia corporation, is estopped from seeking a remedy open to others because it had invoked the New Jersey jurisdiction in insolvency. It is difficult for me to see why this should be so. The scope of the bill was an adjudication of insolvency. The results of such a proceeding are entirely statutory. The complainant sought and could seek no individual relief. Its status would depend on proof of its claim before the receivers, not on the filing of the bill. But waiving this and waiving also the fact that in' the impugned proceeding in Virginia the complainant was the assignee of a stranger to the New Jersey record, I am convinced that its course was unexceptionable. It desired to attack certain mortgages claimed as liens upon the vessels in question. Its contention was that by reason of non-registry these mortgages were void as against creditors not having notice thereof, and it alleged that its assignor was such a creditor. It would have been perfectly proper to seek the relief which such conditions justified in any tribunal that could give it. There would have been nothing inconsistent in seeking it in the New Jersey suit itself or in one collateral thereto, brought for proper administration of assets. But the New Jersey court had jurisdiction neither over the vessels nor the mortgagees. Consequently the complainant followed the property, and, in the same court that was administering relief ancillary to the New Jersey jurisdiction, made its plaint. That was no contempt of the New Jersey court, but rather was it deferential to its supremacy. The course of procedure was this: first, a bill was framed against the defendant and the mortgagees, referring in terms to the original insolvency bill in New Jersey and. to the ancillary bill in the same court in which the.new bill was then exhibited, and-to the receivership, setting up the ground of alleged invalidity of the mortgages and'praying enforcement of complainant’s debt against the vessels. Upon this bill there was issued an attachment in equity the effect of which was to hold the vessels against removal, and on the next rule day the bill was duly filed according to the practice of the court. Meantime the complainant had amended the ancillary bill referred to by inserting like allegation and by bringing in the mortgagees as parties defendant and praying relief against their mortgages. It is said that in its separate bill and in the amendment the complainant asks relief for itself alone; but this criticism is captious. As to the amendment it appears that the bill amended was originally filed in behalf not only of the complainant, but of all other creditors. The independent bill was doubtless, supererogatory and in any case is not to be condemned- because of its limited prayer. Non constat that there are other creditors in the same situation as the complainant: If there are any such they can readily be heard. If there is a lack of parties to either bill by reason of the absence of a receiver to represent the general creditors, that is a defect to be remedied upon complaint to the tribunal whose jurisdiction is invoked.

Remembering that the Virginia- court is a court of equity and that all the facts have been ingenuously disclosed to it, we must assume that equity will be administered. Only by comity between the courts of general jurisdiction of the sister states can the harmonious working of our union be secured. The dissentients in this case are content to leave to the Virginia court the due administration of right and justice and therefore vote to reverse the order from which this appeal was taken. That order directs that the complainant must release its attachment and execute and deliver any papers necessary to enable the new receiver, appointed only in New Jersey, to obtain possession of the attached vessels, and must facilitate by every means in its power the acquiring possession of the vessels by such receiver. The saving clause that nothing in the order shall prevent the complainant from prosecuting its suit in the Virginia court to set aside the mortgages, provided it can do so without interfering with the New Jersey receiver’s paramount and unrestricted right ci possession and his immediate actual possession and right of removal of the vessels from the State of Virginia, is an idle form. Jurisdiction in Virginia exists only by reason of the presence of the vessels there. The mortgagees are non-resident and only through the res can they be reached.

I have put the case on a broad ground, but it should be added that there is a fact that in any view should relieve the complainant from censure even had it been seeking individual relief in an independent forum. Before the complainant took action, now reprehended, the court of chancery, under a petition on which the complainant was not heard, had, by order, directed the receivers to surrender to the mortgagees their title to these vessels. .

For affirmance — Depue, Van Syokel, Lipptncott, Gum-mere, Ludlow, Nixon, Adams — 7.

For reversal — Ti-ie Ci-iiee-Justice, Dixon, Garrison, Collins, Hendrickson, Vredenburgh — 6.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Bernard Holland, complainant and respondent, v. Augustus F. John, defendant and appellant.
    [Filed March 5th, 1900.]
    A voluntary deed and assignment made by a woman eighty years old, paralyzed and childish, to a young man of no kin to her who lived with and had complete control over her, set aside.
    On appeals from decrees advised by Vice-Chancellor Reed, who delivered the following conclusions:
    These cases involve the same question.
    The first is a suit by the complainant, as heir of Annie Burns, to set aside certain conveyances made by Annie Burns to the defendant; and the second is a suit by the complainant, as administrator of Annie Burns, to set aside an assignment of a mortgage made by Annie Burns to the same defendant.
    Annie Burns owned three pieces of real estate in Camden. She owned a three-story frame building, used as a store and dwelling, on the corner of Third and Mechanic streets; she also owned a three-story frame building, used as a store and dwelling, on Mechanic street, east of Third street; she also owned a two-story brick dwelling on Chew street.
    These properties seem to have been free from encumbrances. She also owned, with other personal property, a mortgage made to her and her husband in his lifetime, by one Davis, to secure $800.
    The husband of Annie Burns died some eight or nine years ago. She had no children living, but had one living brother, and the children of two deceased brothers. She lived alone in one or the other of her two houses and stores, at different times, in Mechanic street.
    In 1894 she became acquainted with the defendant, a young man, who was an agent of a life insurance company, who met her while collecting weekly premiums for his company.
    The result of their acquaintance was that he made his home with her.

      On August 14th, 1894, she made an agreement with him, by the terms of which he agreed to board her and pay for her washing so long as she chose to reside with him; and if she should choose to reside elsewhere, then, according to the terms of the agreement, he was to pay her $10 a month, so long as she should live. She, in consideration of this, agreed to convey to him the property secondly, above described, on Mechanic street,, with all the household goods in the said premises. This agreement was executed in the presence of and witnessed by the-counsel for complainant.
    . Annie Burns let the defendant have the store in the premises, and afterwards let him have $700 to start him in the saloon business in Gloucester City. Both businesses were failures.
    On March 29th, 1897, she conveyed to him the three properties-already mentioned; and on July 19th, 1898, she assigned to him the Davis mortgage. She died February 8th, 1898, over eighty years of age.
    The consideration mentioned in each of the hrst and second deeds was $1,000, and in the third deed $600.
    After the defendant opened his saloon in Gloucester, he married, and he took Annie Burns to live with him and his wife, at' that place, whence he returned with her to Camden, residing-there until her death, in her property, 318 Mechanic street. From-the time he went to live with her, he seems to have taken charge of her property aJIairs, obtained money from her whenever he chose, and spent the money with entire freedom.
    In respect to the deed made in pursuance of the agreement made in August, 1894, 1 am of the opinion that it should stands At that time she seems to have been competent to transact business. The agreement was to convey for a consideration, and does-not stand,upon the footing of a pure gift. It is not obviously improvident, and the proof of undue influence is not clear.
    But the subsequent conveyances in 1897 and the assignment of 1898 were pure gifts. They were made by a woman eighty years of age, afflicted with palsy, under the complete control of the defendant. She was like a child, eared for and secluded like a child, and was obedient to every word of the defendant,, who treated her exactly as a child. The defendant was a goodnatured improvident man, fond of drink — indeed boozy at the hearing — who was obviously chronically in need of money. He undoubtedly got what money the old woman had in the bank; he wanted the property and it is to my mind certain that he urged and cajoled the old woman into making these transfers, in a way, which, under the circumstances, amounted to undue influence.
    I will advise a decree setting aside the conveyances and assignment of mortgage, other than the one made in 1894.

      Mr. John H. Fort and Mr. John L. Semple, for the appellant.

      Mr. John F. Earned, for the respondent.
   Per Curiam.

The decrees appealed from must be affirmed, for the reasons given by Yice-Chaneellor Eeed for advising them.

For affirmance — -The Chiee-Justice, Depue, Yan Syckel, Gummere, Ludlow, Adams, Bogert, Hendrickson, Yredenburgh — 9.

For reversal — Dixon, Garrison, Lippincott, Collins, Hixon — 5.


text:
    Joseph Q. Williams, receiver, complainant and appellant, v. Thomas Robb et al., defendants and respondents.
    [Filed March 5th, 1900.]
    A bill was filed to restrain defendant R. from foreclosing a mortgage held by hirpLon property of complainant’s company, alleging that said R. had entered into an agreement which prevented the enforcement of the mortgage debt. — Held, that no such contract as pleaded is proved.
    On appeal from an order advised by Yice-Chancellor Eeed, who delivered the following opinion:

      On June 5th, 1896, one Warren got two judgments against the company for $506.87 and $1,106.59 respectively. On December 13th, 1897, one Tunis got a judgment against the company for $2,035. It is the sale under the execution issued upon these judgments that the bill seeks to restrain.
    In May, 1893, there existed a mortgage of $7,500 upon the property of the company, which mortgage Was held by one Hughes. The company had other debts amounting to $6,000. Mr. Logan M. Bullitt became interested in the affairs of the company, and solicited a loan from Thomas Robb, which was effected, said Robb loaning $12,500, which, with the loan of $1,000 made by Mr. Bullitt, was the consideration of the mortgage for $13,500 made to Mr. Robb, he repaying Mr. Bullitt the $1,000 advanced by him. At the same time a mortgage for the same amount upon the personalty of the company was given to Mr. Robb. The money so loaned was to pay off the debts already mentioned. Mr. Thomas Robb sold this mortgage to his brother, William Oscar Robb.
    In 1896 the Franklin Electric Light Company, through Mr. Bullitt, entered into a contract through Mr. Wilbur, representing the Fort Wayne Electric Company, by which the latter company was to install an incandescent light plant for the Franklin Electric Light Company, the price of which plant was to be $16,500; $4,000 was to be paid in cash, and the title of the plant was to remain in the Fort Wayne Electric Company until the rest of the consideration was paid.
    In June, 1896, as already remarked, the Warren judgments were obtained, and Mr. Warren applied to have a receiver appointed when the judgments were bought by Mr. Robb; and in December, 1897, the Tunis judgment was also purchased by the same party.
    In January, 1898, the Fort Wayne Electric Company recovered a judgment against the Franklin Electric Light Company for $12,588.16. It applied twice for the appointment of a receiver, and upon the second application the present complainant was appointed on September 17th, 1898.
    In April, 1898, Mr. Robb filed a bill to foreclose his two mortgages, executed in 1893, which foreclosure the bill, as already remarked, seeks to restrain.

      It is thus perceived that thus far the Messrs. Robbs’ title to the mortgages and the two judgments and their right to respectively enforce them seems to be perfect. But it is charged that Mr. Thomas Robb is the real owner of the mortgage as well as the judgment, and has lost his right to enforce the payment of these debts at this time by reason of an agreement into which, he entered with the corporation. This alleged agreement is set out in the bill as follows:
    That the stock of the company was to be deposited with Mr. Bullitt, a lot was to be secured in the city of Cape May, and a building erected thereon; that the arc light machinery was to be removed from West- Cape May into the said building and a new incandescent plant was to be purchased and installed therein; that the then outstanding indebtedness of the company was to be paid, and the money to effect this purpose was to be supplied by Robb; that the company was to create á mortgage of $50,000 upon its plant and issue $50,000 of stock; that certain number of bonds was to be given to Robb and $30,000 par value of stock; that $5,000 par value of stock was to go to each of three persons, namely, Mr. Melvin, Mr. Taylor and Mr. Hildreth, whose stock had been deposited with Mr. Bullitt; that $5,000 was to be paid to Mr. Hildreth for his purchase of the $5,000 of stock from one Needles, who had held that amount of the orig-' inal stock, and that Mr. Bullitt was to be repaid what he had paid Mr. Miller for his stock out of his own money.
    It is charged that in pursuance of this agreement the original stock was put in the hands of Logan M. Bullitt in May, 1896, Mr. Bullitt giving a receipt to Mr. James M. E., Hildreth on May 18th, 1896, for the stock containing an agreement to redeliver the same amount of stock in the reorganized company.
    It is charged that a lot was bought and a building erected for' the company, and that the title to such lot was made to William Oscar Robb; that a contract for the installation of an incandescent plant was entered into with the Fort Wayne Electric Company for $16,500; that Mr. Robb purchased the two judgments of Mr. Warren and the judgment of Mr. Tunis already mentioned.
    This is the agreement, and the alleged acts in part performance of the agreement, executed by Mr. Robb.

      The bill charges that by force of this agreement Mr. Bobb was bound to pay the judgments which he is now pressing against the company and to cancel the mortgage which he is now foreclosing, and to pay the entire cost of the incandescent plant; and that upon the performance of these conditions he is entitled to a certain number of bonds and to $30,000 of stock.
    The main witness for the complainant is Mr. James E. Taylor, who was an original holder of ten shares of the stock out of the sixty-one shares of stock issued, and the general manager of the company. He says that at the time when Mr. Bobb paid off the debts of the company in 1893, and took the two mortgages the installation of the incandescent plant was mentioned. Messrs. Bullitt and Bobb both say that it was not mentioned. I am confident that if it was mentioned at all the want of an incandescent plant was alluded to as a defect in the existing plant, which made Mr. Bobb hesitate to make the loan.
    It is apparent that Mr. Bobb was induced to make this loan by Mr. Bullitt. “It was two years after the loan of this money ,” says Mr. Taylor, “when he (Mr. Bobb) agreed in our conversations with him that if he would get all the stock and put it into an incandescent plant and give him or let him have thirty thousand dollars, or thirty-five thousand dollars of an issue of stock, he would furnish the necessary monej^, whatever it was to he, and we were to transfer all our stock to Mr. Bullitt — he to represent Mr. Bobb — and he and Bullitt were to put up the money for the $11,000 judgment; the company was to get a new contract with the city of Cape May for five years; the Fort Wayne Electric Company were to install the plant.”
    The evidence has entirely failed to convince me that the company was ever in a position to compel Mr. Bobb to install an incandescent plant, to cancel his mortgages, to pay off the debts of the company, and to take new bonds and stock for the amount of his claims against the company. That there was a great deal of talk about the installation of an incandescent plant between Mr. Bobb, Mr. Bullitt and Mr. Taylor there is no doubt. Neither have I any doubt that Mr. Bobb came to the conclusion to make an additional loan to the company upon certain conditions; but these conditions were never fully brought about. Mr. Bullitt was not his agent. Mr. Bullitt was an officer and agent of the company from 1893, when he induced Mr. Robb to make additional advances to pay off the debts which had accrued since 1893, and such advances as were necessary to enable the company to put in an incandescent plant.
    Mr. Bullitt was the only one connected with the company who had any influence with Mr. Robb; and because of this Mr. Robb made it a condition that before he would consider the proposition of making further advances, the then outstanding stock of the company should be under the control of Mr. Bullitt. On the supposition that all the conditions would come into existence, Mr. Robb undoubtedly bought the lot, and a building was erected upon it in 1896.' The hitch in the negotiations came when the contract for the installation of the plant was presented to Mr. Robb. Mr. Robb had never agreed to construct the installation plant. He was, in the language of Mr. Hildreth, to furnish a certain amount of money that he was then to advance, including the money which he had in the company, and was to receive a first mortgage upon the plant. Mr. Bullitt brought Mr. Wilbur into relations with Mr. Robb. Hp to that time it is perfectly obvious that Mr. Robb had agreed to advance only $8,000. No one testifies, excepting Mr. Taylor, that he promised to pay the full price of the incandescent plant.
    On July 24th, 1896, Mr. Bullitt wrote to Mr. Taylor about raising $5,000 in Cape May City for the purpose of putting in the plant, and spoke of an issue of bonds. The whole tone of the letter is inconsistent with the notion that Mr. Robb was then under a contract to do anything, and to its contents there seems to have been no dissent by Mr. Taylor.
    Mr. Bullitt was negotiating for the construction of the plant and trying to get Mr. Robb to enter into an agreement directly with the Fort Wayne Electric Company to pay for it. Mr. Robb refused to sign the contract because of the clause that the title to the complainant should remain in the Fort Wayne Electric Company until the full consideration was paid. This clause would have prevented the execution of a mortgage upon the property of the Franklin Electric Light Company, which would have been the first lien upon its property. After Mr. Robb’s refusal to accede to these conditions, Mr. Bullitt himself caused the contract with the Fort Wayne Electric Company, already mentioned, to be executed. -That Mr. Bullitt did not understand that Mr. Robb had already bound himself to pay for this plant is obvious; and it is equally apparent that no one connected with the -company at that time so understood the position -of Mr. Robb towards the company.
    Until this bill was filed by tire receiver, there never was a movement by the officers or stockholders of the Franklin Electric Light Company to enforce such an agreement. After the contract for the construction of the incandescent plant was executed the plant was ¿rect'ed, the Franklin Electric Light Company went on with its business, judgments were obtained against it, an action was brought by the Fort Wayne Electric Company against the Franklin Electric Light Company, which went to judgment, and an application' was made for a receiver, and yet no one stirred against Mr. Robb, asserting that he was bound' to pay all these debts on the conditions mentioned. Mr. Taylor then had the same 'knowledge of all the facts in the case that he now possesses. My conclusion is that no such c'oritract as pleaded is proved, and the bill must be dismissed.
    This makes it unnecessary to consider the interesting questions' raised as to the kind and manner of relief which could be accorded to the receiver in case such a contract had been proved.

      'Mr. Lindley M. Garrison, for the appellant.

      Mr. Robert H. McCarter and Mr. Samuel H. Grey, for the respondents.
   Per Curiam.

The order appealed from is affirmed, for the reasons contained in the opinion of Vice-Chancellor Reed who advised it.

For affirmance — The Chief-Justice, Depue, Van Syckel, Dixon, Garrison, Gummere, Lippincott, Ludlow, Bogert, Hendrickson, Adams, Fixon, Vredenburgh — 13.

For reversal — Fone.


text:
    Francis Craighead et al., complainants and respondents, v. Ellen M. Pike et al., defendants and appellants.
    [Filed March 5th, 1900.]
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in 13 Dick. Ch. Rep. 15.

      Messrs. Yredenlurgh & Garretson, for the appellants.

      Messrs. Gorlin & Gorlin, for the respondents.
   Per Curiam.

The decree appealed from is affirmed, on the grounds stated by Vice-Chancellor Pitney in bis opinion advising it.

For affirmance — The Ci-iiee-Justice, Depue, Van Syckel, Dixon, Garrison, Gummere, Lippinoott, Ludloav, Bogert, Hendrickson, Adams, Nixon, Vredenburgi-i — 13.

For reversal — None.


text:
    Henry W. Morehouse et al., complainants and respondents, v. Daniel S. Kissam, defendant and appellant.
    [Filed March 5th, 1900.]
    On appeal from a decree advised by Vice-Chancellor Stevens, whose opinion is reported in Kissam v. Morehouse, 13 Dick. Ch. Rep. 364.

      Mr. W. Bradford Smith and Mr. Frank E. Bradner, for the appellant.

      Mr. Joseph A. Beecher, for the respondents.
   Per Curiam.

The question argued upon this appeal is fully stated in the opinion of Vice-Chancellor Stevens in the court below.

We conclude that the decree made on his advice, overruling a demurrer to the bill, should be affirmed, for the reasons given by him in his opinion.

The joinder of parties complainant in such a ease as is disclosed by the bill seems convenient and not inequitable, and to be a practice long recognized in the court of chancery.

It is here urged that two of the complainants were improperly joined because the executions upon their judgments had been returned unsatisfied, but this court has lately settled that such a bill may be filed by creditors occupying that position. Hall v. Nash, 13 Dick. Ch. Rep. 554.

_ The decree appealed from must be affirmed.

For affirmance — The Ci-iiee-Justice, Depue, Van Syckel, Dixon, Garrison, Lippincott, Gummeeb, Ludlow, Bogert, Hendrickson, Nixon, Adams, Vredenburgh — 13.

For reversal — None.


text:
    Josie Downing Field, complainant and respondent, v. Hugh B. Thistle, defendant and appellant.
    [Filed June 18th, 1900.]
    On appeal from a decree advised by Vice-Chancellor Emery, whose opinion is reported in Field v. Thistle, 13 Dick. Ch. Rep. 339.

      Mr. W.- Bradford Smith, for the appellant.

      Mr. Louis A. Ziegler, for the respondent.
   Per Curiam.

The decree appealed from is affirmed, for the reasons given by Vice-Chancellor Emery.

For affirmance — The Chancellor, • Chief-Justice, Van Syckel, G-ummere, Ludlow, Bogert, Hendrickson, Adams, Vredenburgh — 9.

For reversal — Dixon, Lippincott, Collins — 3.


text:
    William T. Meredith et al., complainants and appellants, v. The New Jersey Zinc Company et al., defendants and respondents.
    [Filed March 5th, 1900.]
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in 14 Dick. Ch. Rep. 259.

      Mr. Joseph Goult, for the appellants.

      Mr. Richard V. Lindabury and Mr. 6r. W. Wiclcersham (of the New York bar), for the respondents.
   Per Curiam.

The decree appealed from is affirmed, for the reasons stated in the opinion of Vice-Chancellor Pitney, by whom it was advised.

For affirmance — -The Chief-Justice, Van Syokel, Dixon, Garrison, Gummere, Lippincott, Ludlow, Collins, Bogert, Adams, Nixon, Vredenburgh — 12.

For reversal — Hendrickson—i.


text:
    James Fee, complainant and respondent, v. Mary A. Sharkey and Malachi Sharkey, her husband, defendants and appellants.
    [Filed March 5th, 1900.]
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in 14 Dick. Ch. Rep. 284.

      Mr. Frank E. Bradner, for the appellants.
    • Mr. Newion B. Kilchell and Mr. Mahlon Pitney, for the respondent.
   Per Curiam.

The decree appealed from is affirmed, for the reasons assigned by Vice-Chancellor Pitney for advising it.

For affirmance — Ti-ie Chief-Justice, Gummere, Ludlow, Bogert, Hendrickson, Nixon, Adams, Vredenburgh — 8.

For reversal — Depue, Van Syckel, Dixon, Garrison, Collins — 5.


author: Per Curiam. Van Syckel, J.

text:
    Mary Coddington et al., complainants and respondents, v. Amelia Jenner et al., defendants and appellants.
    [Filed March 5th, 1900.]
    On appeal from a decree advised by Vice-Chancellor Emery, whose opinion is reported in 12 Dick. Ch. Rep. 528.

      Mr. Nelson Runyon and Mr. Craig A. Marsh, for the appellants.

      Mr. John A. Wreck and Mr. Richard V. Linddbury, for the respondents.
   Per Curiam.

The decree in this case is affirmed, upon the grounds stated for advising it in the opinion of Vice-Chancellor Emery.

Van Syckel, J.

(dissenting).

The execution of the will alleged to be lost in this ease was, according to the evidence on the part of the proponents, executed in the presence of the two subscribing witnesses only.

One of these witnesses did not know the testatrix.

The character of the other witness for truth and veracity is impeached.

It is debatable whether the testatrix executed a will in the presence of these witnesses, but circumstances appearing in the case may justify the conclusion that a will was executed by her a number of years ago.

The only evidence of the contents of the will now admitted to probate is the unsupported evidence of the impeached witness, who produced a memorandum of its contents, which he claims he has preserved for all those years, although he was less careful about the will itself.

The will disposes of the property of the testatrix in a manner different from that in which it would go in case of intestacy. The fact that in the opinion of the court it may be a just and proper will cannot supply the lack of proof necessary to establish it.

In the absence of the requisite proof a will cannot be probated because it is deemed to be equitable in its disposition of property.

Conceding that a will was executed by the testatrix, to admit to probate the will in controversy upon the unsupported evidence of an impeached witness seems to me to be so clearly in disregard of the safeguards provided by the statute for the due execution of wills, that I am constrained to differ with the majority of the court, and vote to reverse.

For affirmance — The Chibe-Justice, Depue, Dixon, Garrison, Gummere, Lippincott, Collins, 'Bogert, Hendrickson, Nixon, Adams, Vredenburgh — 12.

For reversal — Van Syckel — 1.


author: Magie, Chancellor.

text:
    Elizabeth M. Bracher, respondent, v. Franklin M. Olds, appellant.
    [Filed June 18th, 1900.]
    1. Whether an attorney has a lien upon a last will and testament of a client in his possession and may retain the same, and withhold it from a probate court until payment of a bill for professional services, quiere.

    2. When, after complete execution of a will a testator delivers it to his attorney, with express instruction to deposit it in testator’s safe, the possession of the will thus obtained is not the possession of an attorney, but of a mere agent or messenger, and is inconsistent with possession under a claim of lien.

      Mr. Robert II. McCarter, for the appellant.

      Mr. Ghauncey G. Parker, for the respondent.
   The opinion of the court was delivererd by

Magie, Chancellor.

The above-entitled cause embraces three different appeals taken by Olds, the appellant, from as many orders or decrees of the prerogative court. The three appeals, by our order, made on the consent of the parties, were consolidated and argued together.

The first order appealed from directed a citation to be issued to Olds, requiring him to produce and deliver to the register of the prerogative court the last will and testament of Thomas W. Bracher, deceased, which Olds, by affidavits used on the hearing, admitted was in his possession.

The second order appealed from denied the application of Olds that the said last will and testament should be put in the custody of the register and remain without probate pending the appeal taken from the first order.

The third order or decree appealed from was one admitting the will to probate.

These appeals have been deemed to call for decision of the same question, namely, whether Olds, an attorney, has a right to retain in his custody and withhold from production for probate, a last will and testament of a client, drawn by him, until payment of a bill for professional services alleged to have been rendered for such client.

That question has been elaborately argued, but in the view taken by this court, does not require decision, and no opinion is expressed thereon.

It plainly appears from the affidavits filed in the prerogative court that, after the will had been executed by the deceased, it was in his possession and that it was then delivered to Olds with express instructions to have copies of it made and then to deposit it in a safe of which deceased had the use.

Upon delivery of the paper upon such instructions, the possession of Olds was not that of an attorney or confidential adviser, but only of an agent or messenger with prescribed duties inconsistent with the possession under the claim of lien. By such possession Olds acquired no more right to retain the document and withhold it from probate than he would have if he had surreptitiously abstracted it from his client’s possession.

Upon this view the orders and decree appealed from are not open to objection on the part of Olds, and must be affirmed.

For affirmance — -The Chancellor, Chief-Justice, Van Sycicel, Dixon, Garrison, Lippincott, Gummere, Ludlow, Collins, Bogert, Hendrickson, Adams, Vredenburgil, Voorhees — 14.

For reversal — Hone.


text:
    Walter Scott, complainant and respondent, v. Isaac A. Hall, defendant and appellant.
    [Filed June 18th, 1900.]
    1. To a bill by a vendor against a vendee, seeking the rescission of a contract of sale of chattels as incomplete and withdrawn from before consummation, a plea that the vendor had replevied the chattels from persons who had possession of them; that in the action of replevin the defendants pleaded title in themselves; that on the issue raised by that plea defendants claimed title under the vendee, and a verdict has passed for the' defendants, and that judgment against the vendor had been entered thereon, shows a defence, for the judgment established the fact that the contract of sale had been completed and that title to the chattels had passed from the vendor.
    2. The vendee, although not a party to the action of replevin, may set up the adjudication therein as against the vendor, for that adjudication established the right of persons who claimed under him, and to whom, in case no title had passed, he would be liable.
    3. Although the completed sale and transfer of title thus adjudicated is charged in the bill as having been brought about by a mistake of the vendor’s agent, and although the bill charges that upon the discovery of his mistake the agent immediately sought to rescind the transaction by returning the check received for the purchase-price, no ground for equitable intervention to rescind a contract is disclosed by the bill in the absence of any charge that the vendee knew and took advantage of the agent’s mistake, or otherwise fraudulently acted in obtaining the transfer of title which took place.

      On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported' in 13 Dick. Ch. .Rep.

      Mr. Michael Dunn and Mr. William, B. Gourley, for the appellant.

      Mr. Eugene Emley, for the respondent.
   The opinion of the court was delivered by

Magie, Chancellor.

The bill in this cause was exhibited by Scott, the respondent, against Hall, the appellant, and sought a decree rescinding the contract of sale of' certain machinery made by Scott through an agent named Thomas to Hall. The sole ground for such relief disclosed in the bill, is that the contract of sale was made at a price fixed by Thomas, the agent, under a misapprehension or mistake of fact. The fact alleged to have been misapprehended and mistaken was the amount then remaining unpaid upon a previous contract for the sale of the same machinery made by Scott with a company of which Hall was president, which previous contract, upon Hall’s purchase, was to be satisfied.

To the case made by the bill, Hall interposed a defence by a plea setting up that Scott, before filing the bill in this cause, had issued a writ of replevin in the Passaic circuit court against John Tully and Thomas Murray for the same machinery; that Tully and Murray filed pleas in that action denying Scott’s title and claiming title in themselves; that the issues thus raised were tried before said court, and upon a verdict of a jury, judgment was entered in favor of Tully and Murray and against Scott; and that in making their defence on said issues, Tully and Murray made their claim of title through Hall.

The case was referred to Vice-Chancellor Pitney, and when it came on for hearing upon bill and plea, counsel, with the consent of the learned vice-chancellor, placed before him, as if in evidence upon an issue made on the plea, the record of the judgment in replevin, which had been pleaded, and the stenographer’s notes of the evidence and the judge’s charges in that action. The conclusion reached in the court below will be considered in this court upon the case as it was then presented.

Looking at the case so presented, I have found myself unable to concur in the result reached in the court below, which denies to Hall the protection of the judgment against Scott, respecting the ownership of the machinery in question, in favor of those who claimed title and right of possession under Hall.

It is unnecessary to extend this opinion by minutely describing the question submitted to the jury in that action and decided by their verdict. It is sufficient to say that the judgment thereon conclusively settled that Scott’s title to the machinery in question passed from him under a contract of sale and became vested in Hall, under whom Tully and Murray claimed. We are also of opinion that Hall, although not a party to the action, may set up the judgment therein as against Scott, because it was rendered in favor of those whose possession and right of possession under him was at issue, and Hall, upon a failure of title, would be liable to them. Gould v. Bourgeois, 22 Vr. 356.

The plea thus presents, in favor of Hall, an adjudication that the contract of sale, which the bill seeks to rescind, was executed, and the title of the property sold was transferred from Scott to Hall.

The only question remaining is, whether such a transfer of title is a bar to the relief sought by the bill. If the bill had been franker in its statement of facts such as have been found by the jury in the action at law, this question would probably have been raised by demurrer. But the bill relied upon an incomplete contract of sale, interrupted before completion, and then repudiated. It seeks relief against such a transaction. To such relief an appropriate answer is that the contract in question was not uncompleted, but wholly executed, and has been so adjudged in a litigation raising the very question.

It results that this defence may be interposed unless the bill discloses some equitable ground for avoiding the completed and executed contract. RTo ground.is therein stated, except that Scott’s agent was mistaken as to the amount remaining unpaid upon a previous contract of sale. There is no charge that Hall, the vendee, was cognizant of the mistake-or took any fraudulent or unfair advantage. When, under such circumstances, Scott’s agent accepted the purchase-price fixed by the contract, and the title to the machinery passed to Hall, as must now be conceded, then that contract cannot be disturbed by a court of equity because one of the parties was led to make it by a mistake due to his own fault, and in nowise participated in or caused by the other party.

The order overruling the plea must therefore be reversed.

For reversal — The Chancellor, Ci-iiee-Justice, Van Sycicel, Dixon, Garrison, Lippinoott, Gummbre, Ludlow, Collins, Bogert, Hendrickson, Adams, Yredenburgh, Yoori-iees — 14.

For affirmance — None.


author: Depue, Chief-Justice.

text:
    Charles S. Colton, complainant and respondent, v. Chauncey M. Depew and The West Shore and Ontario Terminal Company, defendants and appellants. Charles S. Colton, complainant and appellant. v. Chauncey M. Depew and The West Shore and Ontario Terminal Company, defendants and respondents.
    [Filed June 18th, 1900.]
    1. The statutes of limitations do not apply in terms to courts of equity, but courts of equity have always felt themselves bound by the principles of the - statute, and, except in matters of strict trust and matters purely equitable in their nature, have acted in conformity with them.

      2. A mortgagee lias a double security for the x>ayment of his debt, viz., the bond, which is a contract by the obligor to pay, and the mortgage, which is a conveyance of an estate in the mortgaged premises. Notwithstanding the mortgagee may have lost his action at law on the bond by reason of the statute of limitations, his remedy under the mortgage may still remain.
    3. To deprive the holder of a bond and mortgage of his bill in chancery, to collect the debt by the sale of the mortgaged premises, the legal right of entry on the lands mortgaged, as well as the legal right of action on the bond, must be barred. By the statute of limitations (Gen. Stat. p. 1975 % 13) an action of debt upon a sealed instrument may be barred after sixteen years from the time the cause of action accrued, unless payment shall have been made thereon within the said period of sixteen years next before suit brought. By section 10 (Gen. Stat. p. 1977) it is provided that any person having a right or title to enter on lands, &c., shall mate entry thereon within twenty years next after such right or title shall accrue, and shall be barred from any entry afterwards.
    4. In order that possession shall give title, it must be adverse to the real owner. Mere possession for twenty years will not constitute a bar. To acquire title in virtue of the statute, the possession must be adverse for the statutory period.
    5. A mortgagor who is in possession of mortgaged premises by sufferance or by the acquiescence of the mortgagee, paying interest on the mortgage, is not in under a possession which is adverse.
    6. In this case an action on the 'bond was barred by the statute of limitations, but interest was paid on the debt within twenty years of the commencement of the foreclosure suit. — Held, that the complainant’s remedy on his mortgage was not barred. Blue v. Everett, 11 Dick. Ch. Rep. 455, explained.

      7. When the mortgage was given the legal rate of interest was six per cent. In 1866 -the legal rate of interest was fixed at seven per cent., and the rate continued until 1878. On January 3d, 1871, D., who was then president of the ferry company, made an endorsement on the bond, agreeing, in consideration of the extension of the time of payment, that the rate of interest should be seven per cent. This endorsement did not appear to have been made in such a manner as would bind the company.

      —-Held, that the vice-chancellor’s allowance of interest at the rate of six per cent., disregarding this agreement, was correct.
    On appeal from, a decree advised by Vice-Chancellor Stevens, whose opinion is reported in 14 Dick. Ch. Rep. 126.

    This case was heard in the court of chancery before Frederic W. Stevens, vice-chancellor. A decree was made sustaining the mortgage, from which Chauncey M. Depew and the West Shore and Ontario Terminal Company appealed. The vice-chancellor allowed interest on the mortgage debt at the rate of six per cent. only. From this part of the decree the complainant appealed.
    The facts are these: On January 3d, 1863, Nathaniel Dole was the owner of a tract of land in Weehawken. On that day he executed a mortgage to William W. Niles to secure his bond for the sum of $17,000, payable with interest in one year after date. Niles, by a deed of assignment, dated the same day, assigned the mortgage to Jane Van Horn, whose surviving executor, on September 29th, 1882, assigned it to the complainant. The land mortgaged was conveyed by Dole, the mortgagor, to Delacroix by a deed dated August 1st, 1865. This deed contained no assumption clause and no agreement that the mortgage money should be taken as part of the consideration. Delacroix, December 31st, 1870, conveyed to. the Weehawken Ferry Company. The title to the mortgaged premises remained in the Weehawken Ferry Company until July 9th, 1884, when it was conveyed by a master to one Simpson. Simpson, May 19th, 1885, conveyed to one Sims, who, by a deed dated May 26th, 1893, conveyed the same to Chauncey M. Depew, the present owner.

      Mr. Randolph W. Parmly and Mr. Charles L. Corbin, for the complainant.

      Messrs. Vredenburgh & Garretson, for the defendants.
   The opinion of the court was delivered by

Depue, Chief-Justice.

The Weehawken Ferry Company became the owner of the mortgaged premises by deed from Delacroix and wife, dated December 31st, 1870. This deed conveyed the mortgaged premises subject to the mortgage now in question, and to the Corn-stock mortgage, with the following clause of assumption:

“The payment of which two mortgages with the interest thereon from this date is hereby assumed by the party of the second part, making together $23,500, which is part of the consideration money expressed in this conveyance.”

The estate vested in the Weehawken Ferry Company in the mortgaged premises was conveyed to Thomas B. Simpson by a master’s deed, dated July 9th, 1884. From December 31st, 1870, to July 9th, 1884, the Weehawken Ferry Company was the owner of the mortgaged premises. The mortgage is dated January 3d, 1863, and conditioned for the payment of $17,000 in one year after its date. For several years interest was paid by the Weehawken Ferry Company to the assignee of the mortgage, the last payment being made on the 22d of December, 1876. This bill was filed December 18th, 1896. The last payment of interest was within twenty years next before the commencement of this suit.

The defendants in their answer set up as the substantial defence in this case:

“That the said complainant’s alleged cause of action, being on a sealed instrument, for the payment of money only, did not accrue within sixteen years next before the commencement of this suit; and they further say that the said action was not commenced within twenty years after default on said alleged mortgage, and therefore the said complainant is barred of and from any action on his alleged bond and mortgage.”

The defence thus brought forward presents the question whether the statute of limitations applies to a suit in a court of equity to enforce a mortgage by foreclosing the equity of redemption, and the construction of the statute in a court of law where title in the mortgagor arising from his possession is set up to defeat an action of ejectment by the owner of the mortgage.

In Shields v. Lozear, 5 Vr. 496, 501, it was held that “by the common -law a mortgage in fee created an immediate estate in fee-simple in the mortgagee, subject to be defeated by the payment of the mortgage money on the day named in the condition, and the mortgagee might enter immediately on the mortgaged premises and hold the estate until the condition was performed. In this state it was held by this court that the right to enter was postponed, and the possession was in the mortgagor, until the condition was broken by default in the payment of the mortgage money. Sanderson v. Den, ex. dem. Price, 1 Zab. 646, note. With this modification of the rights of the mortgagee, as to the postponement of ability to obtain the possession of the mortgaged premises, the nature of the mortgage, as a conveyance, remains as it was at common law.” The conveyance of the mortgaged estate by the owner to the mortgagee.is a legal conveyance, on which ejectment may be brought in the same manner and subject to the same defences and governed by the same legal rules as if the deed of conveyance had been absolute.

A mortgagee has a double security for the payment of his debt, viz., the bond, which is a contract by the obligor to pay, and the mortgage, which is a conveyance of an estate in the mortgaged premises. The bond accompanying the mortgage was executed by Dole. The legal remedy against him on the bond was barred by the statute of limitations, unless saved by his residence out of the state, and he was- discharged from hid liability thereon by a discharge in bankruptcy, January 7th, 1868.

Neither the statute of limitations, which bars the obligee’s right to maintain an action on the bond, nor the discharge of the obligor in bankruptcy, is an extinguishment of the debt. In both instances the remedy is taken away, but the debt remaining would be a valid consideration for a subsequent express promise to pay. Briggs & Ely v. Sutton, Spenc. 581; Whyte v. McGovern, 22 Vr. 356. Notwithstanding the mortgagee has lost his action at law on the bond, his remedy under the mortgage still remains. Busw. Lim. § 140 p. 201; 2 Jones Mort. § 1204; Wagoner v. Watts, 15 Vr. 126, 129 (per Van Syckel, J.) It was so decided in Blue v. Everett, 11 Dick. Ch. Rep. 455. It was there held that in order to deprive the holder of a bond and mortgage of his bill in chancery to collect the debt by the sale of the mortgaged premises, the legal right of entry upon the lands mortgaged, as well as the legal right of action on the bond, must be barred.

The statutes of limitations do not apply to courts of equity, for the reason that the words of the statutes apply only to particular legal .remedies; but proceedings in equity to enforce a legal right are within the spirit and meaning of the statutes, and have always been so considered. The question has been discussed as to whether a court of equity acts in analogy with the statutes or in obedience to them. Lord Redesdale expressed the opinion that where there was a legal right which became! cognizable in a court of equity, courts of equity acted in obedience to the statute of limitations. Hoveden v. Lord Annesley, 2 Sch. & L. *667. The rule seems to be that if the matter in controversy in a court of chancery is of a purely equitable nature, not cognizable in a court of law, the statute of limitations has no application, but the court'will apply the doctrine of neglect and lapse of time according to discretion, regulated by precedents and the peculiar circumstances; but when the two courts have concurrent jurisdiction, and also when the aid of equity is invoked on account of special circumstances, such as the need of a discovery, the difficulty of proceeding at law or the like, the statute is as effectual a bar as at law, with the qualification, that in cases of fraud it commences running from the time of the discovery of the fraud. Lawrence v. Trustees, &c., 2 Den. 577, 581. Mr. Justice Story, dealing with this subject, used this language: “The statutes of limitation, where they are addressed to courts of equity, as well as to courts of law, as they seem to be in all cases of concurrent jurisdiction at law and in equity (as, for example, in matters of account) to which they directly apply, seem equally obligatory in each- court. It has been very justly observed that in such cases courts of equity do not act so much in analogy to the statutes as in obedience to them. In a great variety of other cases, courts of equity act upon the analogy of the limitations at law. Thus, for example, if a legal title would, in ejectment, be barred by twenty years’ adverse possession, courts of equity will act upon the like limitation, and apply it to all cases of relief sought upon equitable titles or claims touching real estate. Thus, for example, if the mortgagee has been in possession of the mortgaged estate for twenty years, without acknowledging the existence of the mortgage, it will be presumed that the mortgage is foreclosed, and that he holds by an absolute title. If the mortgagor has been in possession of the mortgaged estate for the like space of time without acknowledging the mortgage debt, it will be presumed to. be paid. If the judgment creditor has lain by for twenty years without any effort to enforce his judgment, and it has not been acknowledged by the debtor within that time, it will be presumed to be satisfied. And in all these cases courts of equity will act upon these facts as a positive bar to relief in equity.” 2 Story Eq. Jur. § 1520; Ang. Lim. § 26. This general principle has been authoritatively adopted by the courts of this state. In Conover v. Wright, 2 Halst. Ch. 612, Mr. Justice Carpenter, speaking for this court, said: ■ “Whether courts of equity act in obedience or in mere analogy to the statutes of limitations, • it has become a settled rule that they will apply them, in similar cases within the sphere of their jurisdiction, equally with courts of law. They have always'felt themselves bound by the spirit and meaning of these statutes, and ordinarily act in conformity to them. In cases concurrent with a remedy at law, they always allow them to be pleaded, and a party is not permitted to evade their effect by resorting to another forum.” In Executors of Wanmaker v. Van Bushkirk, Sax. 691, Chancellor Yroom said: “The statute of limitations does not apply in terms to courts of equity, but it is well known that they have always felt themselves bound by the principles of the statute, and, except in cases of strict trust and matters purely equitable in their nature, have acted in conformity with them.” These passages were quoted with approval, with a citation of a considerable number of cases, by Mr. Justice Dixon in Blue v. Everett, 11 Dick. Ch. Rep. 455, 460. It will also be observed that in that case, which was for the foreclosure of a mortgage, the complainant’s rights under his bond and mortgage were held to be purely legal in their nature, and therefore subject in the court of equity to the application of the statute of limitations.

In an action of ejectment by the mortgagee against the mortgagor or his grantee in possession, the statute of limitations would be a defence. It would be equally available in a court of equity on a bill to foreclose, and upon the same construction that the statute would receive in a court of law. Section 16 of the statute of limitations provides:

“That no person who now hath, or hereafter may have, any right or title of entry into lands, tenements or hereditaments, shall make any entry therein, but within twenty years next after such right or title shall accrue; and such person shall be barred from any entry afterwards

with a proviso not pertinent to 'this case. Gen. Stat. p. 1027. This section is substantially a re-enactment of the" statute 21 Jac. 1, c. 16. Spottiswoode v. Morris and Essex Railroad Co., 32 Vr. 322, 330. Hnder the settled construction of this statute mere possession for twenty years will not constitute a bar. In order to acquire title or to defend in ejectment in virtue of the statute, the possession must be adverse. Foulke v. Bond, 12 Vr. 528. It does not follow that because the plaintiff’s right of possession accrued more than twenty years before suit brought, his right of action is gone, for to produce this result it is necessary to introduce a second factor, to wit, that there has been an adverse possession covering the statutory period. Van Cleve v. Rook, 11 Vr. 25, 26.

In Kirk v. Smith, Chief-Justice Marshall said: “One of the rules which apply to acts of limitation generally, which has been recognized in the courts of England, and in all others where the rules established in those courts have been adopted, is that possession, to give title, must be adverse. The word is not, indeed, to be found in the statutes, but the plainest dictates of common justice require that it should be implied. It would shock the sense of right which must be felt equally by legislatures and by judges, if a possession which was permissive and entirely consistent with the title of another, should silently bar that title.” 2 Wheat. 241, 288; Wood Lim. p. 623. In Heath v. Pugh, which was an action of ejectment, and the defence was the statute of limitations (3 & 4 Wm. IV. c. 27), Lord Selborne, speaking of the statute of limitations (21 Jac. 1, c. 16), said: “The possession of the mortgaged land by the mortgagor, during the subsistence of the security, and while the mortgagee did not choose to take possession, was held, at law as well as in equity, to be ‘at the will,’ or by the ‘sufferance,’ or ‘permission’ of the mortgagee, under a ‘tacit agreement’ which the mortgagee might determine at his pleasure. It was of the nature of the transaction that the mortgagor should continue in possession. His possession was rightful and not by wrong. He was entitled to the rents and profits as long as he remained in possession; mesne profits accrued due and received prior to action or demand could not be recovered from him by the mortgagee. The former statute of limitations (21 Jac. 1, c. 16) did not, under the circumstances of such a possession by the mortgagor, run against the mortgagee." L. R. 6 Q. B. D. 345, 359. A possession that was rightful and not by wrong in its inception and continuance could not become tortious and adverse, except by some act on the part of the mortgagor which indicated a disavowal of the relation of mortgagor and mortgagee.

A tenant in possession, recognizing the title of his landlord by the payment of rent, does not acquire title by adverse possession, no matter how long his possession may continue. By a parity of reasoning, a mortgagor who is in possession of mortgaged premises by sufferance or by the acquiescence of the mortgagee, paying interest on a mortgage, is not in under a possession which is'adverse. The principle that underlies the whole of this subject is that the payment of rent by the tenant, in one case, and the payment of interest by the mortgagor in the other case, is a recognition of the rights of the landlord or mortgagee. The possession of the mortgagor by the sufferance or forbearance of the mortgagee, making payments on account of the mortgage debt, does not become adverse to the title of the mortgagee until the mortgagor has ceased to recognize the mortgagee’s title by the non-payment of interest.

In Blue v. Everett the mortgage in question was made July 19th, 1872, securing the payment of a bond of the same date for $1,500, payable in one year. As was decided in the court of chancery, the last payment of interest by the mortgagor was more than twenty years before bill Sled. A subsequent payment of interest claimed by the mortgagee was disallowed for want of proof, and the decision of the vice-chancellor on that question was not set aside in this court. There being no recognized payment of interest within twenty years, the bar of the statute arising from the lapse of time after the right of entry accrued was not removed.

The decision in that case established the doctrine that the statute of limitations was available in a suit in equity for the foreclosure of a mortgage, as well as in an action of ejectment, and that the right to a foreclosure ceased when the legal right of entry upon the lands’, mortgaged was barred. In delivering the opinion of the court the learned, justice, speaking of the payments of interest by a mortgagee, used this language: “At law the bar of the statute [of limitations] could not be obviated by payments made on account of the debt, for the mortgagor does not hold the land under the mortgagee, and the payments .could not be deemed rent or in any sense the price of possession, but would be referred solely to the personal obligation held by the mortgagee.” This language does not accurately express the legal principle which controls when such a payment is made by the owner of the mortgaged premises in its effect upon the statute of limitations. The mortgagee has two securities for the debt — the bond and the legal estate in the mortgaged premises. A payment on the debt may be made by the obligor on the bond or by the grantee of the mortgaged premises. Where the obligor has conveyed the premises his grantee has no interest in keeping alive the contract to pay contained in the bond. A payment of interest or part principal on the debt may be made by the obligor or by his grantee. If such payment be made by the owner, who was not the obligor, it would not at law remove the bar of the statute of limitations in an action against the latter. The possession upon which the statute attaches must be adverse. The mortgagee is not barred by the possession of his mortgagor paying interest. 3 Evans Stat. 2Z9, note; 4 Kent 189. The doctrine of the law with respect to title under the statute of limitations is that there has been a possession adverse to the owner of the legal title for twenty years. Whether possession is adverse within the purview of the statute is a question of fact, to be determined upon competent evidence concerning the character of the possession, whether permissive or hostile to the title of the real owner. A person may be in possession of property for a period longer than that mentioned in the statute, without paying rent or making any compensation for his occupation of the premises, and not be within the statute of limitations. Possession, to make the statute available, must be adverse for the full period prescribed by the statute..

The bond which accompanied the mortgage was made by Dole. The payments made in 1876 were made by the Weehawken Eerry Companj', which was then the owner of the mortgaged premises. At that time an action on the bond had been barred by the discharge of Dole in bankruptcy. It is inconceivable that the ferry company should have made these payments with a view to appropriate them to an obligation on which the company was not liable and that did not then exist, and not in satisfaction pro tanto of the mortgage, or in exoneration of the mortgaged premises. As was said by Vice-Chancellor Stevens in this case: “In the case in hand the payments are necessarily referable to the mortgage.” The endorsement of payments on the bond is a matter of form. Payments of interest, whether made on the bond or on the mortgage, if made by the holder of the title to the mortgaged premises, were in exoneration of the mortgaged premises from so much of the indebtedness, and were plainly a recognition of the lien of the mortgage. On a bill to foreclose such payments would be credited on account of the mortgage indebtedness, for the payment of which a sale of the mortgaged premises would be decreed. In an action of ejectment a mortgagor in possession for more than twenty years, setting up the statute of limitations, would be debarred of such defence by proof that within twenty years he had recognized the mortgaged estate by the payment of interest on the mortgage indebtedness. Dnder such circumstances his title would not be adverse. The same principle must be applied in a suit in equity for the foreclosure of a mortgage.

The payment of interest by the Weehawken Ferry Company, the grantee in possession of the mortgaged premises, made on the 22d of December, 1876, is plenary evidence that up to that date the possession of the ferry company was not adverse to the mortgagee. When this payment was made the company was not holding adversely, and the twenty years, the period of adverse'holding necessary to give title or to constitute a defence, either in an action of ejectment or in a foreclosure suit, had not elapsed when this bill was filed.

The question involved in this case is one of the utmost importance in this community. The moneyed institutions, controlling large amounts of capital, seek investments permanent as far as practicable. Such investments on mortgages are largely made in expectation that the money loaned will be neither paid nor called in while the investment is satisfactory to both parties. A decision that would invalidate such mortgages of twenty years’ standing, where the interest has been paid annually, would be disastrous.

The decree sustaining the complainant’s right to a foreclosure should be affirmed.

The appeal by Colton presents the question of the rate of interest to be allowed. When the mortgage was given the legal rate of interest was six per cent. In 1866 the legal rate of interest was fixed at seven per cent., and that rate continued until 1878. On January 3d, 1871, Dole, who was then president of the ferry company, made an endorsement on the bond as follows;

“In consideration of the extension of time of the payment of this bond it is understood and agreed that the rate of interest from this date shall be seven per cent. 1
“Nathaniel Dole. [Seal.]”

This endorsement by the president of the' company does not appear to have been made in a manner which would bind the company. The vice-chancellor allowed interest at the rate of six per cent., disregarding the above agreement.

I shall vote to affirm the decree in both cases.

For affirmance■ — -The Chancellor, ' Chiee-Justice, Van Syckel, G-ummere, Ludlow, Collins, Bogert, Hendrickson, Adams, Yredenburgh, Yoorhebs — 11.

For reversal — None.