author: Leaming, Y. C.

text:
    Carrie. O. Cessna v. Lillian Adams.
    [Submitted November 4th, 1921.
    Determined December 20th, 1921.]
    1. A voluntary trust, as distinguished from one supported by a consideration, is essentially a gift, and must be fully executed to render it effective, and a mere intent to establish such a trust will not be aided by a court of equity.
    2. In a suit to enforce a trust evidence held not to show that a soldier had executed a voluntary trust as to part of his war risk insurance, which was made payable to his mother, in behalf of complainant, his fiancee, as she could not be designated as beneficiary of such insurance, even if a trust to that effect! fully executed would be enforced in view of its purpose to evade the provisions of the statute.
    3. The execution of a voluntary trust should be clearly and satisfactorily established to enable a court of equity to recognize and enforce it.
    On final hearing on bill to enforce trust.

      Mr. Martin V. Bergen, for the complainant.

      Mr. Joseph C. Raines, for the defendant.
   Leaming, Y. C.

Defendant is the beneficiary named in a policy of insurance issued to her son by the bureau of war risk insurance of the treasury department of the United States. Since the death of the insured the insurer has been mailing payment, to defendant of the monthly installments due b]r the terms of the insurance contract. The bill filed herein seeks to compel defendant to pay to complainant all moneys heretofore received and to be hereafter received pursuant to a trust alleged to exist in favor of complainant.

By the terms of the act under which the insurance was issued (Fed. St. Ann. (2d ed.) p. 1326 § 402) the insurance is required to be payable only to a spouse, child, grandchild, parent, brother or sister of the insured, and, subject to regulations, the insured shall at all times have the right to change the beneficiary, without the consent of the beneficiary, but only within the class above named; if no beneficiary within the permitted class be designated by the insured, either in his lifetime or by will, or if tire designated beneficiary does not survive the insured, tire insurance shall be payable to such person or persons within the permitted class of beneficiaries as would under the laws of the state of the residence of the insured be entitled to his personal property in case of intestacy.

Complainant was the fiancée of the insured. Complainant’s testimony, and the testimony of complainant’s mother, is to the effect that a few days before the insured left this country with his regiment for France, he stated to complainant and her mother that he already had taken out a war risk policy for $5,000 with his mother, defendant herein, named as beneficiary, and desired to take out $5,000 more insurance in complainant’s favor, but was informed by his lieutenant that he could not name her as beneficiary; that he would for that reason take out the additional insurance with his mother named as beneficiary and Ms mother would pay the insurance money to complainant in the event of his death. The second '$5,000 policy was subsequently issued with the mother of insured, defendant herein, named as beneficiary. Subsequently (June 30th, 1918), the insured wrote to complainant from Fiance as follows:

“I now carry $10,000 in Mother’s name, but am unable to make a will. Wrote to Mother that if anything happens half this amount goes to you. She will be perfectly willing that you have half which you have all the right in the world to claim, but let’s not dwell too long on this subject as I am coming home to my little girl and the insurance, go hang.”

It is these circumstances, in connection with a claim that the insured wrote to his mother a similar letter, upon which the claim of a trust in favor of complainant is based.

There is no evidence which justifies a finding of fact that at any time prior to the issuance of the policy here in question the -mother of the insured agreed to act as beneficiary in a policy in the interest of complainant or even knew of any such contemplated plan. She also denies ever having received a letter of the nature of the one referred to- in the letter above quoted and produces a letter from her son bearing date the preceding day (June 29th, 1918), as follows: “Have you seen Carrie [complainant] lately ? I took out $10,000 insurance. You will get the papers before long.”-

Complainant and her mother testify to- admissions of defendant, to the effect that she had received from her son a letter of the nature of the one referred to in the letter first above quoted; this is also denied by defendant.

It is an established principle that a mere intent to establish a voluntary trust cannot be aided by a court of equity; a voluntary trust — as distinguished from one supported by a consideration — is essentially a gift and must be fully executed to render it effective as such. See cases cited in Austin v. Young, 90 N. J. Eq. 47. The utmost here claimed by complainant to establish an executed trust is a letter of insured stating that he had mitten ta his mother, as beneficiary, to- pay the- insurance money to complainant in the event of his death, and admissions of the beneficiary that such a letter had been received by her. The letter referred to by the insured may have been written to his mother or it may not have been, since she denies having received such a letter; nor was the certificate or policy of insurance delivered to complainant. See Harden v. Harden (Ky.), 230 S. W. Rep. 307. Obviously, the execution of a trust of this nature should be clearly and satisfactorily established to enable this court to recognize and enforce it. I am unable to- reach the conclusion that complainant has adequately established the existence of an executed trust in her favor.

I also incline to the view, which it is unnecessary here to adopt, that the federal statute is so- clear in its purpose to confine the benefits of this insurance to the class of persons named in the act that any attempt upon the part of the insured to thus accomplish, by indirection what the statute forbids -must be held to be illegal and unenforceable.

The general rule is, as stated in Sharp v. Tees, 9 N. J. Law 352, 354, that “the attempt to contravene the policy of a public statute is illegal. Nor is it necessary to render it so1 that the statute should! contain an express prohibition of such attempts. It always contains an implied prohibition.” See, also, Gregory v. Jersey City, 34 N. J. Law 390, 397. This rule obtains alike in courts of law and equity. Church v. Muir, 33 N. J. Law 318, 323. This rule has not been uniformly enforced in cases in which policies of insurance have been assigned to persons without insurable interests and in trusts created by the insured in beneficial associations in favor of persons outside the class allowed as beneficiaries, it being at times held that the defence was one purely personal to the insurer; in other cases the opposite view is adopted. A recent case of the latter class is O’Brien v. Massachusetts Catholic Order of Foresters, 220 Mass. 79. In this state there are two cases of. the former class — Meyers v. Schumann, 54 N. J. Eq. 414, and Stellar v. Sell, 55 N. J. Eq. 530. In the former case, a policy of insurance had been assigned to a person without an insurable interest; that illegal element was held to afford a defence only to the insurer; in the latter case, a beneficial association had paid the insurance to the beneficiary and a trust was sustained in favor of another as against the beneficiary. See, also, Britton v. Supreme Council, 46 N. J. Eq. 102; affirmed, 47 N. J. Eq. 325. No similar case appears to have arisen under the War Insurance act. That act so clearly defines a broad national policy to make provision for the restricted class of relatives named in the act in the event of the death of the insured that it may well -be doubted whether Meyers v. Schumann, supra, or Stellar v. Sell, supra, can be regarded as giving sanction to a claim- of one -outside the statutory class against funds in tire hands of a beneficiary within'the class -in a case in which the rights of the one outside the class are wholly dependent upon an admitted attempt of the insured, concurred in by the claimant, to evade the provisions of the federal statute and accomplish by indirection what the claimant and. the insured knew could not be accomplished directly and thus defeat the broad and beneficial purpose of the federal statute referred to. It is immaterial whether the attempt to evade the statute renders the appointment of the beneficiary void, since in that view defendant takes as next of kin. But, as already suggested, it is unnecessary here to definitely pass upon this phase of the case.

1 will advise a decree dismissing the bill.


source: Caselaw Access Project

author: Lewis, V'. C.

license: Public Domain

text:
    Dora Walz et al. v. Elizabeth Oser et al.
    [Decided January 4th, 1922.]
    1. An assignee of a mortgage takes it subject to existing equities between the parties, and it is the duty of the assignee to inquire of the mortgagor as to his liability thereon.
    2. It is clear that under 8 Comp. Stat. p. 1630 § J/S nothing but money shall be considered as payment of any part of the capital stock of a corporation organized under the Corporation act of New Jersey, except property necessary for its business for which under section 49 (now repealed) capital stock might be issued.
    3. Where an undertaker and his stock salesman, a preacher, formerly the woman’s pastor, together with a lawyer, took undue advantage of a woman seventy-three years old, and procured from her a mortgage of $10,000 on her farm in exchange for stock of doubtful value in the undertaker’s company, she being at the time in the early stages of senile dementia, equity will not aid in foreclosing the mortgage in behalf of the parties who gained this unfair advantage.
    On pleadings and proofs.

      Mr. Merritt Lane, for tire complainants.

      Mr. Randolph Perkins, for the defendants.
   Lewis, V'. C.

This is a bill to foreclose a mortgage given by Elizabeth Oser to William Necker, Inc., a corporation of the State of New Jersey', dated August 1st, 1914, given to secure a bond of even date therewith, conditioned for the payment of $10,000 on August 1st, 1919, or sooner, at the option of the obligor, with interest thereon at five per cent, per annum. The mortgage covered a farm near JBergenfield, Bergen county', New Jersey. At the time of the execution and delivery of the bond and mortgage, the mortgagor, a widow, was over seventy-three years of age. She was German, bom and could not read or mite the English language. The ostensible Consideration for the mortgage was capita] stock of the ¡Dar value of $10,000 of the mortgagee, William Necker, Inc., a corporation engaged in the business of “undertaker,” at Union Hill, Hudson county, and vicinity. William Necker was the dominating factor in the corporation, and appears to have been aggressive both in financing it and in conducting' its ordinary activities. As a part of the business organization, the Necker corporation had in its employ' the Reverend Mr. Groenert, who had previously' been the pastor of the church which Mrs. Oser attended, and who was on the most close and confidential relations with her. He called her “Mother,” and she regarded him as-a son, and he testified that sire had “every confidence” in him.

As an employe of the Necker corporation Groenert was engaged in selling its capital stock, and also in. the preaching of funeral sermons in connection with the company’s business of conducting funerals. He was designated as the “Chaplain.”

At the time of the execution of the bond and mortgage Groenert was no longer the pastor of the church which Mrs. Oser attended, but his influence over her still remained.

The bond and mortgage were witnessed by Edward Hollander, an attorney-at-law of this state, who also, took the acknowledgment of Mrs. Oser to the mortgage, as a master in chancery. Hollander was also the attorney for the Necker company' at the time it was incorporated, and actually conducted its corporation. He continued to act as its attorney thereafter; was employed and paid by the company to act in its behalf in the securing of the bond and mortgage from' Mrs. Oser, and continued to act in the capacity of attorney for the company for a long time after the bond and mortgage were obtained.

Prior to the time when the bond and mortgage were obtained from Mrs. Oser, sire was importuned by both Necker and Groenert to mortgage the farm on which she and her adult children lived, and from which they gained their livelihood, for the stock in the Necker corporation, which was then in financial straits, heavily encumbered, and with some of its paper having gone to protest. Notwithstanding that condition, it was represented to Mrs. Oser that the company’s property was free of encumbrance, and that it was not in debt. The Osers were very poor and had worked for years to acquire the farm on which they lived. Mrs. Oser had no independent advice, not even from her children, who were kept in ignorance of the persuasions brought to bear upon her.

Furthermore, I am satisfied from the evidence that at this time Mrs. Oser was at least in the early stages of senile dementia and utterly incapable of understanding the nature and effect of the transaction, which she was thus persuaded to enter into. Within a comparatively short time thereafter she became entirely irresponsible and helpless. Hollander, the attorney for the company, remonstrated because of the persistent persuasion which had been brought to bear upon the old lady, although he did not interfere when the transaction was being consummated; he was evidently being paid by the company to take part in a transaction that he finally concluded he did not approve of. On that occasion Mrs. Oser did not seem to be able to comprehend what was going on, and they had to keep repeating to her what they wanted done. She seemed to forget it as soon as it was stated; and a short time later on it became necessary to revisit Mrs. Oser with the papers to rectify a clerical defect; and at that time she had no recollection whatever of either Hollander or the mortgage; and Hollander had to be reintroduced to her. All of this clearly shows the condition into' which her mental faculties had lapsed.

The mortgage was recorded on August 14th, 1914, and on September 25th, 1914, the Neeker company assigned it to Lawrence Fagan for “one dollar and other valuable considerations.” The testimony shows that Fagan held the mortgage for the Hoboken Printing and Publishing Company, to which the Neeker company was heavily indebted. Contemporaneously therewith, hoAvever, the Neeker company gave to the printing company its note to cover this amount, with several individual endorsers, who are still liable on their endorsements, irrespective of the assignment of the bond and mortgage.

On June 8th, 1915, Fagan assigned the bond and mortgage to Frederick A. Seide, as trustee, in. consideration of “oné dollar;” and on July 22d, 1918, Seide assigned them to Dora Walz, the present complainant, for “one dollar and other valuable consideration.” These latter holders were successive trustees for the printing company, and the testimony fails to show that any valuable consideration actually passed on the respective transfers of the bond and mortgage. It also fails to show that the assignees took the precaution to obtain from the mortgagor the usual declaration of no set-off, or to' satisfy themselves that there were no equities existing in her favor as against toe mortgagee.

On December 31st, 1914, toe Neeker company paid to Mrs. Oser dividends on toe stock amounting to $291.67; and on July 1st, 1915, and January 3d, 1916, like dividends were paid, amounting to $350 at each payment, malting; a total of $991.67. At the time the dividends were paid there was deducted from the amount thereof the interest due upon Mrs. Oser’s mortgage, and she was paid toe .difference, although just why this should have been done is difficult to explain, for the Neeker company had transferred the .mortgage toi Fagan several months before the first dividend check was given; and Fagan had transferred to Seide before the second and third diviclend checks were paid.

In October, 1916, the Hnited States district court for the district of New Jersey appointed a receiver for the Neeker company, andl toe company was adjudicated insolvent by that court. The bill to foreclose in the present suit was filed in August, 1918. Mrs. Oser died in April, 1919, and the defendants now substituted in the suit are her heirs-at-law, her daughter and sons, who claim, in fact, to have been co-owners of the mortgaged premises with Mrs. Oser, title thereto, however, having been taken in her name alone. William Necker is also now deceased.

It is the well-settled rule in this state that the assignee of a mortgage takes it subject, to existing equities between the parties to it; and it is tire duty of the assignee to inquire of the mortgagor as to his liability thereon. 3 Comp. Stat. p. 3418 § 31; Magie v. Reynolds, 51 N. J. Eq. 140; Cartun v. Meyers, 82 Atl. Rep. 14; Gierth. v. Fidelity Trust Co. et al. (New Jersey Court of Errors and Appeals).

It is also clear that under section 48 of the Corporation act (2 Comp. Stat. p. 1630) nothing but money shall be considered as payment of any part of the capital stock of any corporation organized under that act, except property necessary for its business, for which, under section 49 (which was in effect at the time the Oser mortgage was given, but since repealed), capital stock of the corporation might be issued. I do not see how it can be said that this mortgage was necessary for the business of the Necker corporation.

But aside from this, I think that at the time the bond and mortgage were obtained from Mrs. Oser she was afflicted with bodily and mental infirmities, and so disabled that she was wholly incapable of doing business or of making any contract, bargain or disposition of her property with discretion or understanding; and that undue advantage was taken of her by the combined force of the undertaker, the preacher and the lawyer, who surrounded her to the complete annihilation of her own will.

It is a fundamental principle of a court of equity that in bargaining with an illiterate -jand ignorant person, without full knowledge of the situation involved, and having no independent advice thereon, strict good faith should be observed by the party so bargaining not to deceive such party by any act or representation; or to allow him to deceive himself by any mistake as to the facts; and that this tribunal will never lend its active aid in behalf of a party who, by a superior knowledge and artful silence, lias gained an unfair advantage over another. Hyer v. Little, 20 N. J. Eq. 443; Erie Railroad Co. v. Delaware, Lackawanna and Western Railroad Co., 21 N. J. Eq. 283.

As was said by Chief-Justice Beaslejq sitting for the chancellor, in the case last cited (at p. 298 of the report) : “Such triumphs are deemed unconscionable and are opposed to the general principles of the law.”

If Mrs. Oser at the time of the execution of the bond and mortgage was in the condition of irresponsibility which I have attributed to her, then, a, fortiori, was she less able as time went on to assert her equities against the mortgagee and its assignees.

In the light of the testimony as to her mental condition, the whole transaction had doubtless passed entirely out of her mind shortly after it was consummated and not revived until the suit to foreclose the mortgage was commenced; and her children did not come in as parties in interest until after her death, when they' were substituted as the defendants in the foreclosure suit.

G'roenert cashed the dividend checks for her, and she doubtless never knew just what thejr meant.

I am satisfied, therefore, that byr the clear- misrepresentations made as to the financial condition of the Necker corporation; from the disability under which Mrs. Oser suffered, and the ultra vires nature of the transaction, that the defences set up in this action should prevail, and that laches are not imputable to the defendants, under the circumstances. The bill, therefore, will be dismissed.

I will advise a decree in accordance with these views.


author: Lewis, V. C.

text:
    Thomas F. McCran, attorney-general of the State of New Jersey, informant, v. Erie Railroad Company et al., defendants.
    [Decided January 7th, 1922.]
    . 1. A railroad company which under its charter had n right to riparian lands occupied by a bridge without compensation therefor, is not required, in changing the location of the bridge, to compensate the state for the talcing of riparian lands for the new bridge, since the riparian lands occupied by the old structure revert to the state for future disposition, so that it loses nothing by the change in location.
    2. The Railroad act (P. L. 1903 p. 6%5) does not supersede or repeal a special charter authorizing a railroad to erect and maintain bridges over certain rivers in the state. A statute conferring special privileges is not superseded or repealed by a general statute, unless the language thereof clearly expresses such intent.
    3. Where a railroad company under its charter was authorized to erect and maintain bridges over certain rivers without payment of compensation, this court will not require it, on erecting a new bridge at a different location to compensate a town for land taken for such purpose either because the preliminary steps in condemnation had not been taken, or because the town’s consent even if required under P. L. 1917 p. 319, was not obtained, especially where there is no evidence determinative of the value of such lands.
    4. An easement cannot be acquired by the public longitudinally along a railroad right of way by user, particularly where such user, except along a public highway, is unlawful, and the company plainly indicates by signs that it is not a public thoroughfare, such use being permissive only, and mere user without objection being insufficient to constitute an invitation.
    5. A prescriptive right of the public to use a footpath across a railroad bridge cannot be transferred to a new bridge erected at an entirely different location.
    On information, pleadings and proofs.

      Mr. Thomas F. McCran, attorney-general, and Mr. I-Iarrison P. Lindabury, special counsel, for the informant.

      Ifessrs. Collins & Corbin, by Mr. Robert J. Bain, for the defendants Erie Railroad Company and Newark and Hudson Railroad Company.

      Mr. Clyde D. Sotder, for the defendant town of Kearny.
   Lewis, V. C.

This ease comes before the court upon an information filed by the attorney-general of the State of New Jersey to enjoin the Newark and Hudson Railroad Company and the Erie Railroad Company, its lessee, and the director general of railroads (the railroads then being operated by the United States railroad administration) from building a bridge for their tracks across the Passaic river, between the city of Newark and the town of: Kearny, a short distance north of the railroad bridge theretofore in use for that purpose. The injunction was sought upon the ground that the bridge, as planned, would occupy certain of the riparian lands belonging to the state, without that right having been granted by the appropriate state officers, and without compensation to the state having been made therefor. An order to show cause with ad interim, restraint was allowed, but upon the preliminary hearing the temporary restraint was vacated, and the l’ailroads were permitted to proceed with the construction of the bridge upon their paying into court the sum of $11,372.42, which was the amount fixed by the board of commerce and navigation as the price that should be paid for the riparian lands occupied by the new structure, and for the permission to build the bridge. The deposit thus exacted was paid into court and the building of the bridge was proceeded with, the necessary approval by the secretary of war having been obtained, as provided by the act of congress pertaining thereto.

The railroad companies answered, setting up their right to build the bridge and use such riparian lands as were necessary therefor, without compensation to the state, by virtue of their charter and of the General Railroad act of 1903. ■ They also set up that some part of the riparian lands for which the state demanded compensation were claimed' by the town' of Kearny, and that, therefore, they could not safely pay compensation to the state. The Newark and Hudson Railroad Company also filed with its answer a counter-claim against the town of Kearny, specifying the lands claimed' by both the state and the town, so that the respective claims might be determined and the compensation, if any, fixed.

The town answered the railroad company’s counter-claim and set up its claim to the lands involved. It also, in turn, counterclaimed against tire railroad companies for the purpose of enjoining the building of the new bridge, unless it was so constructed as to provide a passageway for pedestrians over it, claiming that the public had acquired a prescriptive right to such a passageway over the old bridge, which should -be transferred to the new bridge. It also asserted that the consent of the town to the construction of the new bridge, pursuant to chapter 152, laws of 1917, Home Rule act, had not been obtained.

A preliminary order, with temporary restraint, was made on this counter-claim of the town of Kearny, but upon the hearing the restraint was discharged, except as to interference with a sewer of tire town on certain of tire lands to be occupied by the bridge, and the town was enjoined from interfering with the building of the new structure.

The railroads denied the prescriptive right to the passageway over the bridge and the necessity for tire consent of lire town under tire Home Rule act or otherwise.

The proofs show that there will be no interference with the sewer of the town of Kearny bye the new bridge. A very small part of tire town’s land immediately adjoining the right of way of the railroad on the north will be taken for the new structure. The town; concedes that" it does not own the riparian lands, but contends that it should be compensated for the small portion of its own land which has been actually taken. The town also concedes that should the legislature direct-the removal of the old bridge, its alleged prescriptive right to the passageway over it would terminate with tb.e,rights of the railroad, but insists that so long as the bridge' remains the alleged prescriptive right in the bridge continues.

- The state concedes that the railroads have the right to occupy the riparian lands without compensation, so far as the original biidge is concerned, under the charter of the Newark and Hudson Railroad Company, which provides:

“It. shall be lawful for the said company to lay out and construct a railroad * * * and for that purpose the said company may erect and maintain bridges over the Passaic and Hackensack rivers.”

And that such has been the construction of similar grants where the question has arisen by the courts. Pennsylvania Railroad Co. v. New York and Long Branch Railroad Co., 23 N. J. Eq. 157; Attorney-General v. East Jersey Water Co., 78 N. J. Eq. 329; Allen v. Jersey City, 53 N. J. Law 522; American Dock, &c., Co. v. Trustees, &c., 39 N. J. Eq. 409 (at p. 425).

It is the state’s contention, however, that the railroad’s right to thus occupy riparian lands without compensation was. exhausted with the location of its right of way and construction of its original bridge; and that compensation must- now he made to the state for whatever riparian lands are acquired for the purpose of the new structure; that, the railroad cannot claim the implied right to the gratuitous acquisition of riparian lands for bridges to such extent and at such locations as may suit its pleasure or1 desire; that it must pay the state for whatever riparian lands it now takes and occupies for the new structure.

Tn support of this contention it relies upon the provisions of the General Railroad acts of 1873 and of 1903, both of which, however, were enacted subsequent to the charter of the Newark and Hudson Railroad Company, which became effective March 17th, 1870.

It is true that this charter is subject to alteration, amendment or repeal, by virtue of section 20 thereof; but the railroads urge that the general provisions of the railroad acts of 1873 and 1903 do' not have the effect of altering, amending or modifying the provisions of the special charter of' 1870.

Section 16 of the act of 1903 (P. L. 1903 p. 655) contains this proviso:

‘Provided that such company shall not take any land under water belonging to this state until the consent of the riparian commissioners shall first be had and obtained [unless the said land is at least twenty-five feet under the bed of the water], who are hereby authorized to convey same on receiving such compensation as they may fix.”

By section 88 of the act of 1903, the act is made to apply to all railroad companies, however formed, created or organized under any law of this state, and by section 89, all acts and parts of acts, general and special, inconsistent with this act, are repealed.

The theory, therefore, upon which the state bases its present claim to compensation for tire riparian lands occupied by the new structure is, that the General Bailroad act of 1903, requiring compensation, has intervened to abrogate the implied gratuitous grant in the charter of 1870; and that even though this effect has not resulted, the railroad companies are no better off under the charter, because they have exhausted the gratuitous right on the first location, and must now make compensation on the taking of the riparian lands for the new structure.

The fallacy in the second phase of the state’s theory, it seems to me, is this: That by the change of location of the new bridge, and the consequent shifting of the position of the line of the railroad, the old structure will pass away, leaving the riparian lands heretofore occupied by it to the state for future disposition. The railroad takes in the new location simply the equivalent of what it abandons in the old; and the state receives in the old location the equivalent of what is taken in the new. If the railroads must now pay the state for what they take in the new location, the state, upon ultimately disposing of what is left in the old, will receive double compensation. T feel, therefore, that the state is made whole and loses nothing by the change in location.

But, aside from this, it seems to me that the general provisions of the act of 1903 are not to be taken as. abrogative of the special grants of the charter of 1870. P. L. 1870 p. 1274, North Hudson County Railway Co. v. Hoboken, 41 N. J. Law 71, where the court said that—

“No canon of construction is more firmly established than that a general statute will not supersede or repeal a statute conferring special privileges unless there be clear language expressive of such an intent.” See, also, West Jersey Traction Co. v. Camden Horse Railroad Co., 52 N. J. Eq. 452, where Vice-Chancellor Pitney said: - “The act of March 14th, 1893, does not attempt to resume an}' previously granted franchise, to repeal any charter, or in anywise to interfere with, the chartered rights of any corporation already existing. There is not in it a word indicating an intention to- interfere with any vested rights, or to stop any enterprise in course of execution. Such intent will not be inferred unless plainly declared.”

The state, therefore, is not entitled to receive the $11,372.42 paid into court by the railroads upon the preliminary hearing.

There is no evidence determinative of the value of tire small paid of the small tract of land of the town of Kearny occupied by the new structure; and it seems to me, in any event, that whatever compensation the town should receive for the land so taken, and for damages, is'a matter to be disposed of by condemnation, pursuánt to the provisions of the charter of 1870 of the Newark and Hudson Railroad Company. This -court will not now interfere with, the structure that has been erected upon those lands, either because the preliminary steps in the condemnation have not been taken or because the consent of the town, even if required, as contended, was not obtained.

So far as the alleged prescriptive right to the use of the bridge by pedestrians is concerned, I feel that the right to cross the bridge has not been established, although it has been in use by the public for many years. There were signs on the bridge forbidding them to cross.

. Furthermore, the use referred to was unlawful. Section 55 of the Railroad act (Comp. Stat. p. 4245) provides that —

“It shall not be lawful for any person other than those connected with, or employed upon, the railroad, to walk along the tracks of any railroad except when the same shall be laid upon a public highway.”

At most, the use of the footpath, primarily provided for the convenience of the railroad employes, was permissive only as to others. If originally permissive it could not ripen into- a prescriptive right. Pennsylvania Railroad Co. v. Hulse, 59 N. J. Law 54.

A mere passive acquiescence bv an owner in a certain use of his land by others involves no liability. Dieckman v. Delaware, Lackawanna and Western Railroad Co., 81 N. J. Law (at p 463).

Roth the unlawfulness of the use under section 55 of the Railroad act, and the signs forbidding the use placed on the bridge, repel the presumption 'of an intention on the part of the railroad to subject its fee to the public use. Wood v. Hurd, 34 N. J. Law 87. “There is nothing in mere user without objection to- constitute an invitation.” Drelich v. Erie Railroad Co., 91 N. J. Law 600, and cases cited.

As to whether a railroad right of way, which is a public highway for the purposes to- which it is devoted, is subject to the burden of a, grant to a dominant user longitudinally or the prescriptive right based upon such a presumed grant, seems not to have been specifically adjudicated in this state, although it was considered by the supreme court in Pennsylvania Railroad Co. v. Hulse, supra; and by the court of errors and appeals in Dickinson v. Delaware, Lackawanna and Western Railroad, Co., 87 N. J. Law 264.

Rut it seelns plain, however, that an easement cannot be acquired, by the public longitudinally along the railroad right of way by user, particularly in cases where such user, except aL the point indicated by the statute, is unlawful, and where the 'railroad company plainly indicates by signs that the passageway is not a public thoroughfare. A railroad company ought not to be obliged to patrol its tracks-from one end to the other to keep- off trespassers, and to prevent those who use it longitudinally from claiming a prescriptive right or license, on the ground of acquiescence. 3 Ell. Rail. (2d ed.), § 1250 p. 589.

In Brooks v. Pennsylvania Railroad Co., 92 N. J. Law 394, it was contended that a user by prescription had been established across certain railroad tracks. The testimony upon this point was summed up by the statement of a certain witness who testified that “you would come down the street or go up the street and walk right across the railroad tracks you found there.” The court of errors and appeals, in holding that no prescriptive right was thereby acquired to- cross the tracks, so as to impose a duty upon the railr-oad to warn persons thus proceeding when trains approached, said: “The testimony goes no further than to show such crossing of a railroad track as is common. Probably, as strong a ease could be made to establish a highway by user at every rod of the railroad — certainly every rod in populous communities where the tracks are anywhere near grade. Such user, if known to the railroad companjr, is permissive, not under claim of right, and, therefore, not adverse; * * *

“ ‘Relying for right of way on use, the right could not extend beyond the use, or, as it has been expressed, “if the right of way depends solely upon user then the width of the way, and the extent of the servitude is measured by the character of the user; the easement cannot be broader than the user.” District of Columbia v. Robinson, 180 U. S. 92, 100.'”

Even assuming, arguendo, that a prescriptive right to the footpath across the bridge had been established over the old bridge, I do not see h.ow that could be transferred to the new structure at an entirely different location, and to say that the railroad company should be put to the burden of maintaining the old bridge after it had ceased to use it for its railroad purposes simply for the use of pedestrians who had assumed to use the footpath across it, contrary to law and to the express prohibition of the railroad, would seem to me to he absurd.

I will advise a decree in accordance with, these views.


author: Backus, V. C.

text:
    Marcus Robbins et al. v. Ideal Wheel and Tire Company.
    [Decided June 2d, 1921.]
    1. That instruments of assignment of patents to a corpoi’ation, which subsequently became insolvent, were lost is no reason for disallowing the claim of the assignor, to whom stock was issued for such patents, to share in the distribution of the surplus assets..

      2. That patents, in consideration of the assignment of which stock in a corporation was issued, were never used by such corporation, is no reason for disallowing the assignor’s claim to share in the distribution of surplus assets on insolvency.

      3. In the absence of fraud or bad faith, the fact that, by reason of the failure of a corporation to develop patents .assigned to it, the -stockholders’ .expectation of profits were blasted, is no ground for rescission of their resolution adopted and confirmed by the board of directors to issue stock in payment for the patents, and, the rights of creditors not being involved, the fact that the patents were not worth as much as the stock, is no ground for rejecting or reducing the assignor’s claim to share in the distribution of the surplus assets of the corporation after it became insolvent, the transaction being one of bargain and sale between the assignor and the company.
    On appeal from receiver’s adjudgment.

      Mr. Benjamin Newman, for the appellant.

      Messrs. Stein, Stein & Hannech, for the respondents.
   Backus, V. C.

The receiver of this insolvent corporation has paid all the debts and the cost of administration, and there is a surplus of assets to be divided among the stockholders. The corporation is a $50,000 concern, of which J-oeeph H. Dwork, or his assigns, holds one-half the shares. Dwork was the inventor of an automobile tire and obtained letters patent from the United States government for his invention. The company was organized to manufacture and market the tire, Dwork was the promoter and he sold his invention and assigned his patents to the company for his shares- — two- thousand five hundred. The other stockholders paid cash for their shares. The invention was never utilized by the corporation because, as it is said, of the war embargo- upon rubber. The company during its short existence engaged in repairing tire5. The stockholders, other than Dwork, protest against his participating in the dividend of the surplus on the giounds that (1) the patents had not in fact been assigned; (21 the patented article was never used by the defendant company; (3) there was no proof of the value of1 the patents produced before the board of directors, and, consequently, their judgment of the value was arbitrary, and the issuing of the stock in payment was in violation of the statute and fraudulent. The receiver sustained the protest on the grounds stated and rejected Dw-ork’s claim; hence this appeal.

The proofs show that the patents were assigned. The receiver’s findings to the contrary are based upon his assumption that they were not assigned because the instruments of assignment cannot now be found. They are lost. That circumstance manifestly is not a just reason for the disallowance. Nor are his findings that the patented article was never used by the defendant company. That was the company’s misfortune.

That, at the time the corporation agreed to issue to Dwork two thousand five hundred shares of its stock in payment for his invention and patents, there was no proof before the board of directors that they were worth that much, and that the board acted arbitrarily, and not in good faith, and that the patents were not in fact of the value of tire shares of stock at par, would be good grounds for rejecting the claim1 or reducing it to the true value of the patents if in the present litigation the rights of creditors were involved, as in Holcombe et al. v. Trenton While City Co.; 80 N. J. Eq. 122. Here the contest is between the' corporation and its stockholders,- or, more closely speaking, between the stockholders and the rigid requirements of the statute, for the protection of creditors, are not applicable; and for this reason: At the first meeting of the stockholders they resolved to purchase the patents and to issue in payment thereof fully-paid-up certificates of stock of the company to the amount of two thousand five hundred shares. The board of directors adopted and confirmed the resolution of the stockholders. The transaction was one of bargain and sale between Dwork and the company. There was no fraud, actual or constructive. Dwork believed he had an invention of great value, which could be profitably exploited by the company, and the stockholders thought so, too. That their hopes- and expectations were blasted by the failure to develop the patents and to- reap handsome profits in nowise affects- the contract of purchase and promise. There is no ground for a rescission, and a rescission could he the only escape from the promise. In dis-po-sing of. a. somewhat similar question Vice-Chancellor Bergen, in Goodnow v. American Writing Paper Co., 72 N. J. Eq. 645, quoted the language of Judge Showalter in Northern Trust Co. v. Columbia Straw Paper Co., 75 Fed. Rep. 936, and it fits the present ease: “Whatever may have been in fact the value of the property turned ever to the company for its stock, the company agreed to take it for the stock. The persons interested were the stockholders, and there was no dissent on the part of any person concerned from what was then done. Neither any person then holding stock, nor any person who afterwards became a stockholder by assignment from one who then held stock, can now make complaint, on behalf of the corporation, as against the fairness of that transaction. This I take to be the settled law on that subject.”

The appeal is sustained and the receiver will take into account the Dwork stock in the distribution.


author: JBackes, Y. C.

text:
    Myrtle Hahn, petitioner, v. William Hahn, defendant.
    [Decided October 27th, 1921.]
    1. The gravamen of the desertion contemplated by the third section of the Divorce act is not the mere physical absence of one of the married couple from the other, but such absence in a prescribed condition of mind — a willful and obstinate desertion.
    2. A wife was entitled to a decree of divorce on the ground of desertion where the defendant husband refused to provide for her, and took her into his parents’ home, from which place they were ordered out by the parents for failure to pay for their keep, and the wife left, but the husband remained, although the wife did not let the defendant know that she was willing to live with him; there being noi rule requiring a deserted wife to approach her husband to have her marital rights restored, such duty being imposed by law on the husband.

      On exception? to master’s report.

      Mr. John P. Manning, for the exceptant.
   JBackes, Y. C.

The master, to whom this uncontested divorce case was referred, reported adversely, and it is before me on exceptions. The evidence shows that the parties were married July 18th, 1915. They lived together in a single room for seventeen months. During that time the petitioner was maintained by her mother and the defendant by his parents. In February, 1917, they went to live with the defendant’s parents, and after a month’s stay were ordered out by tire defendant’s mother for his failure to pay for their keep'. The petitioner went, but her husband continued, and has remained ever since. The defendant is a shiftless, worthless fellow, who refused to set up> housekeeping, never in any manner supported his wife, and since the separation has utterly ignored her and their child. He refused support for the child until compelled by the police court. He declared he would not live with his wife. Upon this state of facts, satisfactorily established, the master reported that he was unable to find that there was a willful and obstinate desertion. Upon the point of willfulness he reports: “The willfulness of the desertion on the part of the defendant is the subject of much of the testimony and the facts so proved would indeed establish willfulness if the defendant had in fact left the petitioner. I cannot, however, find therefrom a willful desertion on his part, when he did not in fact desert the petitioner.” I am unable to agree with the master. The view that there was no willful desertion on the part of the husband because the wife and not he left is unsupportable. Departure is not the test of desertion. The gravamen of the desertion contemplated by the third section of our Divorce act is not the mere physical absence of one of the married couple from the other, but such absence in a prescribed condition of mind — a willful and obstinate desertion. Hyland v. Hyland, 55 N. J. Eq. 35. Here the wife was compelled to leave the roof that sheltered both by the command of the defendant’s mother. He sullenly heard and saw her driven away without a word of reproach to his mother or one of sympathy or comfort to his wife. He furnished the motive for the separation and was responsible for its execution. Iiis mother’s orders became his orders. He deserted his wife by staying where she was not permitted to be, and his abandonment 'of her and their child ever since reflects his mental attitude towards her.

The master, not satisfied that the desertion was obstinate, reports on this phase of the case that “the obstinacy of the desertion might be found from the petitioner’s testimony that she was read}'' and willing to live with her husband and would have lived any place with him. This testimony was corroborated by the. testimony of her mother, who states that her daughter has talked with her about living with her husband and that she was willing to go with him in just one room. She never, however, so far as I can find, let the defendant know that this was her state of mind, although she saw him every week, .until he went into military service, these weekly meetings being'for the purpose óf receiving the defendant’s contribution to the support of his child.”

I' know of nioi rule requiring a deserted wife to approach her husband to have her marital rights restored- — in this case to inaugurate them. The shoe is on the other foot. That is a duty imposed by law upon' the husband. Bowlby v. Bowlby, 25 N. J. Eq. 406. The testimony shows clearly that the petitioner was at all times receptive and ready to rejoin her husband had he made reasonable overtures. That this deserted wife did not complain, was passive, even content in the separation, does not indicate that the desertion was not obstinate — against her will. In the unfortunate circumstances in which she found herself, she had no choice but to patiently submit to- the inevitable situation brought about her by her husband. What else could she clo? The defendant’s conduct is even more reprehensible than was that of the defendant in Hague v. Hague, 85 N. J. Eq. 537, wherein the court of errors and appeals reversed this court and ordered a decree.

The petitioner is entitled to a decree.


author: Backus, Y. C.

text:
    Isabell Ball Gifford v. George Ernst Gifford and the Prudential Insurance Company of America.
    [Submitted September 20th, 1921.
    Decided October 10th, 1921.]
    1. A wife who pays premiums on an endowment policy on her husband’s life naming her as beneficiary, but providing for payment to the husband if he survived the endowment period, without any expectation nhat they would be repaid, and with no intention to keep or hold the policy as security, acquires no lien on the fund from the mere payment of the premiums.
    2. When such payments are made without, any agreement for repayment or a lien, they are in the nature of gifts to the husband from the wife.
    8. The validity of such gifts are not affected and they cannot be set aside because of the husband’s subsequent willful and obstinate desertion of his wife, for which the wife obtained a divorce.
    On final hearing.

      Mr. Horace G. Grice, for the complainant.

      Mr. Leonard Kaliech, for the defendant Giiford.
   Backus, Y. C.

Shortly after Mr. and Mrs. Giiford were-married, in 1900, the Prudential Insurance Company issued upon each of their lives an insurance policy and endowment b’ond of $5,000, payable to the insured if he or she survived twenty years, or to the survivor if the insured died within that period'. The annual premiums, except the first, were paid by Mrs. Giiford to- and including 1909. They separated in 1908, and in 1913 were divorced on her complaint for desertion. Mrs. Giiford collected the cash surrender value of the policy .'on her life soon after the separation (her husband releasing), and the endowment on Mr. Gifford’s policy having matured the insurance cómpany was about to pay it to him, when Mrs. Gifford filed this bill, claiming a lien for the premiums she had paid. An injunction issued and the Prudential, by leave, paid the money, $4,610, into court.

The gravamen of the bill is that the premiums were paid by Mrs. Gifford upon.agreement with her husband that she was to hold the policy as security. The answer sets up that the payments of the premiums were voluntary and a gift from the wife to the husband. I granted the ad interim injunction upon Mrs. Gifford’s unqualified averment that the policy had been pledged to her, but at the hearing she seemed not to realize that she had. so deposed, and I feel she did not intend to. Her affidavit was her counsel’s conception of her rights rather than her own. The proofs fail utterly to sustain the allegations of the bill. The evidence shows clearly, in fact Mrs. Gifford admits, that she paid the premiums without any expectation that they would be repaid, either by her husband or out of the fund, and says that she never entertained the idea that she held or kept the policy as security. The mere fact that she paid the premiums does not give her a right to a lien. It is well established that, one paying premiums on an insurance policy acquires no lien on the fund unless it is agreed with the beneficiary that he should have one. 2 Joyce Ins. § 1148; Clack v. Holland, 19 Bev. 262; Leslie v. French, 23 Ch. Div. 552.

I have looked beyond the single issue raised by the pleadings, i. e., that the complainant’s rights were contractual, to see whether Mrs. Gifford could not have back her money on other grounds, for it would seem but equitable that having sown the fund she ought to get back her seed. But my examination of the authorities satisfies me that complainant’s alleged ground for relief — pledge—was the only one she could stand on, and in this she has failed. There are exceptions under peculiar circumstances. Eor instance, a pledgee of the policy who pays the premiums to protect his security is entitled to be reimbursed out of the fund. Leslie v. French, supra. So, a joint beneficiary who-pays the premium to preserve his interest may call upon his co-beneficiary for contribution out of the fund. Stockwell v. Mutual Life Insurance Co., 140 Cal. 198; McKerrell v. Gowans (1912), 2 L. R. Ch. 648. It has been held that a person paying the premiums at the request of a beneficiary, whose interest in the policy lapsed by her death before the insured, was entitled to be repaid out of the fund as against the ultimate beneficiaries. Morgan v. Mutual Benefit Insurance Co., 116 N. Y. Supp. 989. And where premiums or assessments were paid by one under the mistaken idea that he was a beneficiary, equity has ordered that he be reimbursed. Tepper v. Royal Arcanum, 59 N. J. Eq. 321. But not where the premiums were paid by a nominated beneficiary who- knew that he could be deposed, as in Spengler v. Spengler, 65 N. J. Eq. 176. Aside from these and kindred situations I have found no authority for a lien for premiums paid, except the right rests in contract. And this holds true as between husband and wife. Leslie v. French, supra. Mrs. Gifford does not come within the category of the exceptional situations. She paid the premiums, knowing her own legal rights and those of her husband under the policy, viz., if he were to die within twenty years she would benefit and if he survived he would take. She had no misconception as to her status, and, consequently, is not entitled, to a lien on that score. Spengler v. Spengler, supra.

The payments 'of the premiums were in the nature of gifts to the husband from the wife. Mrs. Gifford is a woman of wealth. Mr. Gifford earned a modest salary. The indications are that they lived in a style becoming her means — he contributing towards, the family expenditures, according to his 'ability, she supplying the deficiency. He suggested the mutual insurance; she agreed to pay the premiums. Although she half heartedly denied this, the evidence leaves no doubt as to the understanding of the parties, and, indeed, all during the time they lived together in harmony Mrs. Gifford paid the premiums and, apparently, voluntarily and in accordance with the arrangement. She stopped only because they parted company. Now, had Mrs. Gifford carried on- — and I have no doubt she would have had they continued together — could it then have been sincerely ventured that the premiums were not gifts and that the husband was not entitled outright to the endowment ? There were no ■ strings to the gifts of the premiums. Each was complete and absolute when made and irrevocable. That the payments were regarded by Mrs. Gifford as donative is to be found] in her letter to her husband written shortly after they separated, in which she asked him to- sign a formal surrender of Iris interest in the policy on her life, which he did, and wherein she said, “What I want is my policy in my name,” and thát she would like “Full sway over my own;” and in a conversation about that time, as Mr. Gifford relates it, and it is not denied, in which he asked her for a like renunciation of her interest in the policy on his life, which she refused, for the reason that in the event of his death before the twenty years were up his relatives would get the insurance, although she expressed herself as perfectly willing that he should have the endowment— to my mind a plain recognition of the gift of the premiums.

The validity of the gifts are unaffected by Mr. Gifford’s subsequent willful and obstinate desertion of his wife and the divorce that followed. Subsequent adultery, desertion or any other marital 'offence resulting in divorce afford no ground for setting' aside gifts made toi the offender. Lister v. Lister, 35 N. J. Eq. 49; affirmed, 37 N. J. Eq. 331; Dunbar v. Dunbar (1909), 2 L. R. Ch. 639; Converse v. Converse, 9 Rich. Eq. 535; Chase v. Phillips, 153 Mass. 17. See note to Thomas v. Thomas, 35 L. R. A. (N. S.) 124.

I have considered whether an equity exists in favor of Mrs. Gifford on 'the principle enunciated by Vice-Chancellor Van Fleet in Black v. Black, 30 N. J. Eq. 215, to the effect that a wife’s expenditures upon her husband’s estate — their home — are gifts, but that she is entitled to recover them if he thereafter, without justifiable cause, casts her .out. There the wife spent her money in the confidence of reaping conjugal happiness and comfort in the home she had embellished, and her disappointment, if unlawfully brought about by her husband’s conduct, was a fraud. In the present case, there were no such considerations. The endowment was to Mr. Gifford outright. Mrs. Gifford was not to share in it except, perhaps, incidentally as. a wife, and then only according to her husband’s, inclination.

Tlie bill will be dismissed, with, costs, and the money paid into court will be ordered paid to the defendant.

Note. — Black v. Black was taken to the court of errors and appeals and the judgment.of that court is reported in 31 N. J. Eq. 798, as follows: “No written opinion was: delivered. The decree of the vice-chancellor (3 Stew. 215) was reversed excepting as to- the amount due on the $1,000 note.” This statement is misleading. The decree below denied Mrs. Black equitable relief for the moneys she had expended upon her husband’s estate because of her misconduct, but granted her a money decree on three notes made to her by her husband for money lent. Mrs. Black took no appeal. Mr. Black appealed from the money decree and the court reversed as to two of the notes.


text:
    In the matter of the application of Mr. Charles N. Welsh for a writ of habeas corpus for his infant children, Charles N. Welsh, Jr., and Albert R. G. Welsh.
    [Submitted December 6th, 1921.
    Decided January 12th, 1922.]
    1. Allowance of counsel fees rests solely on the statutes, except where trust funds in the control of the court are being administered.
    2. On a voluntary nonsuit by a plaintiff, a court of equity cannot allow counsel fees to a defendant either under the ninety-first section of the Chancery act or under P. L. 1915 p. 185 § 6.

    3. Notwithstanding the general rule that a complainant may dismiss at pleasure before trial on payment of costs, a petitioner for habeas eorpns to determine the right to custody of infant children, who are the wards of the court, cannot dismiss 1ns petition and thereby prevent the court from judicially settling the rights to custody.
    4. Where a father had invoked the court’s jurisdiction to determine the right to the custody of minor children by petition for habeas corpas, to which the mother had filed an answer asserting her right to the children and, praying for their custody, no cross-petition by the wife was necessary to prevent the husband from voluntarily dismissing his petition.

      o. Where a petitioner for habeas corpus to recover custody of his children, who were within this state, was a non-resident, so that he could not be subjected to the jurisdiction of this court in a proceeding to determine the custody of the children, and no decree determining such custody would be conclusive on him outside of the jurisdiction, he will not be permitted, after having submitted to the jurisdiction, to dismiss his petition, and thereby prevent the court, from rendering a decree which will be res adjudicata everywhere.
    O. As a general principle a complainant will not be permitted to dismiss his bill after the defendant has gained an advantage in the progress of the cause which would be prejudiced by a dismissal.
    On motion for leave to dismiss petition.

      Messrs. Pitney, Hardin £ Skinner (Mr. Shelton Pitney), for the petitioner.

      Mr. John E. Newman and Messrs. Treacy £ Milton (Mr. John Milton), for the respondent..
   Backus, V. C.

This is a strife between divorced parents for the custody of their two children. The decree of divorce, granted by the Court of Common Pleas of Philadelphia, Pennsylvania, makes no disposition of the children. They now reside at Lakewood, in this state, with their mother. The father, a reddent of'Chestnut Hill, Pennsylvania, petitioned this court to award their custody to him. The mother, in her answer to. the petition, alleges that he is an unfit person to ha.ve them, specifically setting forth the grounds for the allegation, and prays that they be awarded to her. The charge of unfitness is traversed and the cause was set down for hearing. Before the hearing day the petitioner moved to dismiss his petition, as a matter of course, upon the payment of costs. This was denied him, and he was directed to give notice of the motion. At the hearing the respondent objected to the dismissal, insisting that it is her right to have the issue determined, and, at all events, that the dismissal should be on payment of costs, including a counsel fee. The counsel fee was resisted on the ground that the court was without power to allow it, the argument being that counsel fees, like costs, are creatures of statutes, and that there is no statutory provision for counsel fees upon a voluntary dismissal before trial. Allowance of counsel fee rests solely on the statutes, except where trust funds in the control of the eoiurt are being administered. In re Queen, 82 N. J. Eq. 588; Sparks v. Ross, 82 N. J. Eq. 121; Lawyers Title and Trust Co. v. Comptroller, 85 N. J. Eq. 481. Section 91 of the Chancery act (Comp. Stat. p. 445; P. L. 1910 p. 427) provides that “in any case, matter or proceeding in the court of ehaneeiy, the chancellor may make such allowances by way of counsel fee to the party or parties obtaining the order or deciee as shall seem to him. to be reasonable and proper.” Chapter 116 of the session laws of 1915, page 185, section 6, enacts that “the court upon making any order or decree, may charge the successful. party with costs or a reasonable Counsel fee, or both, in any case in which the court shall deem it just to do so.” This is the only legislation covering the allowance of counsel fees in chancery. Now, it is obvious that if the motion were granted the respondent would not be “the party or parties obtaining tire order or decree,” and, on the other hand, the petitioner would not be “tire successful party” in the case, for he has quit. It would appear that the two enactments above noted aimed to give the couto power to grant counsel fees in all instances, in its cliscre-' tion, and if this was the legislative scheme then, phiinly, there is an hiatus, and counsel fees 'on a voluntary dismissal fall within the gap. The language of each of the enabling acts is so explicit and inclusive that bridging the gap by judicial construction is not permissible. But. the matter of counsel fees is of secondary consideration. The main question is whether the petitioner is entitled to dismiss his petition. Ordinarily, a complainant has Control over his cause and may dismiss, at pleasure before trial on payment of costs. But this general and well-established rule has no place in a proceeding such as the present, wherein the chancellor, as parens patria, is appealed to to decide, as between parents, to. which of them should be awarded the permanent custody of their children — wards of the court., brought under his jurisdiction by the petition and the writ of habeas corpus; a proceeding to obtain a judicial declaration fixing their status a.s regards their permanent custody, and settling the rights of the parents with respect to such custody, upon the issues raised by the pleadings — a legal drama or, rather, tragedy, in which the parents, both alike, axe actors. The respondent filed no cross-petition and, I take it, none is necessary to protect and preserve the cause against a voluntary dismissal. Her answer, asserting her claim to the children and praying for their custody, gives her the right toi have her claim adjudicated, and of this she cannot be deprived by the petitioner’s withdrawal from the contest. He may refuse to prosecute, and he may decline to further resist her claim to the children, but he is not in a position to bring the litigation to an end by a dismissal of his petition. The case, in a sense, takes on the aspect of an interpleader suit.

There is also this reason why the petitioner should not be allowed to dismiss his petition. He is a non-resident. The court mow has jurisdiction of the subject-matter and over the petitioner by his voluntary submission. The respondent ought not to be deprived of this advantage, and the benefit of a decree (if the children are ultimately awarded to her) of indisputable integrity and force, and that will spell res adjudicata in every tribunal, at home or abroad, wherever presented. If the petitioner is permitted to escape the jurisdiction by dismissing his petition, and the respondent is put to her petition to have her right to the custody of her children, judicially established, he could not again be brought into court. There is no provision in the statute for substituted service 'of process in cases of this nature. The provision of the Chancery act (Comp. Stat. p. 414) applies solely to service upon absent defendants to bills and is not available. Service by notice might perhaps estop- him from later attacking the adjudication in this state, but the decree would have no extra-territorial effect. The advantage gained by tire respondent, by1 the petitioner’s voluntary submission to- the jurisdiction of tire court, and the prejudice her cause would suffer if he were released, precludes the right to dismiss and withdraw.

Authority for the rule that a suitor controls his cause and may dismiss upon the payment of -costs may be found in the textbooks on “Practice”' and in any of the current digests. The exceptions to the rule are also- noted. Vice-Chancellor Pitney, in McCarren v. Coogan, 50 N. J. Eq. 268, 611, discussed the exeeptions and cited the authorities. I have found no case dealing with the precise point in circumstances like the present, but the principle that runs through the cases upon which the exceptions to the rule are based — that when tire defendant has gained an advantage in the (progress of the) cause which would be prejudiced by a dismissal, the rule is not applicable — supports the respondent’s objection to tire motion to dismiss. The motion will be denied.

The cause may be brought on for hearing on giving the usual notice.


author: Backes, V. C.

text:
    Girard Trust Company v. Standard Gas Company and Joseph E. Stricker.
    [Submitted December 6th, 1921.
    Decided December 22d, 1921.]
    1. Book accounts, present and after acquired, may be mortgaged.
    2. A corporation ’ mortgage on all its assets, present and after acquired, includes book accounts.
    3. A receiver of an insolvent public utilities corporation, operating its plant under the direction of the court, must account to a mortgagee for wear and tear, on the theory of waste, out of the profits of his operations.
    4. In such a suit for foreclosure, the failure of the trustee to apply for a receiver in foreclosure, whereby the trustee would have be'en entitled to all the earnings of the corporation, held not to deprive the trustee of Ms equity in the funds earned at the expense of the mortgage security.
    On bill, &e.

      Messrs. Lindabury, Depue & Faulks (Mr. Josiah Stryker), for the complainant.

      Mr. William E. Foster, for the receiver.
   Backes, V. C.

The mortgage under foreclosure was given by the defendant company to the complainant, as trustee, to secure a bond issue, of which there is now outstanding $601,700. The mortgage conveys the plant of the defendant company located in seventeen municipalities in Monmouth county to which, and the inhabitants thereof, it furnishes gas for heat and light. All of the company’s property, tangible and intangible, owned at the time of the execution of the mortgage, and to be thereafter acquired, was subjected to the lien of the mortgage in these comprehensive terms, after describing particular land holdings:

“Also all and singular all other property, real, personal and mixed, of whatever kind and wheresoever situated, whether now owned or hereafter acquired by the company, including [without in anywise limiting or impairing by the enumeration of the same, the scope and intent of any general description contained in this indenture] all gas works and gas plants, machinery, engines, boilers, houses, shops, sheds, apparatus, gas mains, gas pipes, gas posts, burners, reflectors, meters and distributing systems of the company, in or through the county of Monmouth, State of New Jersey * * * - all tools, fixtures, equipment, fuel, materials and supplies, all franchises, licenses, grants, interests, exemptions, im.munities, contracts and ordinance rights and servitudes of every nature and description whatsoever; and all the estate, right, title and interest, property! possession, claims and demands of every nature and kind whatsoever, as well at law as in equity, now held, owned, possessed, enjoyed or claimed by the company and which it may hereafter acquire and any and every part thereof; and the reversion and reversions, remainder and remainders, earnings, tolls, rents, issues, income and profits thereof.”

Shortly before this suit was begun the gas company was declared insolvent, and the defendant Strieker was appointed receiver, and he ever since has been operating the works under the order of the court. The complainant is entitled to a decree of foreclosure and sale, the only question being the extent of the lien of the decree.

When the receiver took hold there came to his hands book accounts — moneys due from customers to the corporation; and in the course of his operation others accrued to him as receiver from consumers to whom he had furnished gas. The complainant claims that the hook accounts of the corporation as well as those contracted by the receiver are covered by the lien of its mortgage and ought to he included in the decree.

That the book accounts of the corporation, at its insolvency, are subject to the mortgage is not an open question in this court. A corporation may mortgage its book accounts — existing and to be after acquired. It was so held by Vice-Chancellor Lewis in Commercial Trust Co. v. Wertheim Coal Co., 88 N. J. Eq. 143, and affirmed by the court of errors and appeals, sub nom. Commercial Trust Co. v. Drayton, 90 N. J. Eq. 264. The decree below was modified, but only as to its application to certain of the accounts. In Buvinger v. Evening Union Printing Co., 72 N. J. Eq. 321, the precise point, under similar circumstances, and on a mortgage in words substantially like those above quoted came up for decision, and it was held that the book accounts outstanding at the time of the appointment of the receiver in insolvency were encumbered, and they were awarded to the mortgagee. Vice-Chancellor Learning, after holding that book accounts, existing and after acquired, may be mortgaged, says of the mortgage before him that “the intention of the parties to include in the lien of this mortgage all of the assets of the mortgagor then existing and thereafter to be acquired in the progress of its business is, to my mind, clearly manifest from the terms of the mortgage. Where the language used so clearly manifests a purpose to include all assets of mortgagor of every character, present and prospective, an over technical measurement of the specific words used should not be indulged in to defeat the general and manifest intention. No creditor of mortgagor could have been reasonably misled by the language used. I think it clear that tire outstanding choses in action of mortgagor are covered by the lien of this mortgage.”

The receiver will be directed to account to the complainant-for the company’s book accounts that came to him at his appointment.

The contention that the receiver’s book accounts are subject to the lien of the mortgage as after-acquired property of the corporation is untenable. The receiver’s operation of the company’s plant was not a continuance of the company’s business. The company ceased to function when it was declared insolvent and enjoined, in the language of the statute, “from exercising any of its privileges or franchises.” The receiver took over its property and affairs, not as its representative but as a statutorily created trustee, to liquidate the assets and distribute them among the creditors and stockholders. The book accounts arising from his management accrued to the trustj not to the moribund corporation. Coddington v. Bisphain, 36 N. J. Eq. 574.

-While these book accounts are not reached by the mortgage, I' think the complainant has an equity in them. They were made possible only by the use of the mortgaged property at tire expense of the mortgaged security, and to the extent to which this security has been depreciated by the use, there ought, in all fairness, be compensation, on the theory of compensation for waste. Ordinarily, a receiver in insolvency, when directed to operate, is limited to working up materials on hand into finished products, the better to market the same, and sometimes he is ordered to operate to preserve the assets for sale as a going concern, but here a great public' utility and essentials of life were involved and at stake. The court’s first duty was to the public to furnish it with heat and light, for, had they been denied, thousands of householders would have suffered acutely. Now, as it turns out, the receiver has made some money that goes to the credit of the trust estate, and it seems to me but equitable to allow therefrom the damage the mortgaged security' sustained by llic efforts that brought this fund‘into existence. The complainant might well have 'applied for a receiver in foreclosure and thus would have been entitled to all the earnings. None, perhaps; would have been- appointed because the property already was in custodia legis, but the status of mortgagee in possession, in legal contemplation, would have been thereby attained. And .while it is so •that the possession of the receiver in insolvency was not in law the possession of the mortgagee, and was not for its benefit, any more than would a receiver in foreclosure of a second mortgage be regarded as holding for a prior mortgagee foreclosing by a separate suit (Longdock Mills and Elevator v. Alpen, 82 N. J. Eq. 190), the mere failure of tire complainant to avail itself of its legal rights in this respect is no reason for depriving it of an equity in the funds earned at the expense of its security. In other words, the security ought not be prejudiced by tire use made of it under judicial direction while in the custody of the law.

The allowance for depreciation will be determined on further proofs. The amount will be a preferential lien on the funds in the hands of the receiver on his final accounting in the insolvency suit.


text:
    Saving Investment and Trust Company v. Mary F. Crouch et al.
    [Submitted January 18th, 1922.
    Decided February 6th, 1922.]
    1. A bequest of a designated number of shares of stock in a certain corporation is not specific, "even though the testator may at the time own the exact number of shares given, so that such bequests do not pass to the legatees at the death of the testator, and the dividends paid fall into the residue.
    2. Evidence aliunde is admissible in aid of the intention expressed in the will, but it cannot be admitted to supply an intention which is nowhere disclosed in the will itself.
    3. The facts that the testator at the time of executing his will had his corporate stock divided into numerous certificates, any one of which of a similar denomination would satisfy the legacies given in the will, and that he selected some of the certificates, and sent them to legatees during his lifetime in satisfaction of bequests to them, do not establish that the legacies were specific and not general, even if such circumstances could be considered to determine that question.
    On final hearing.

      Mr. Jerome D. Gedney, for the complainant.

      Mr. Arthur H. Bissell, for the defendant Crouch.

      Mr. Benjamin F. Weinberg, for the defendant Byington.

      Messrs. Wail, Haight, Carey £ Hartpenee (Mr. Albert C. Wall), for the remaining defendants.
   Backes, V. C.

Edwin M. Green died leaving an estate consisting mainly of shares of capital stock of a railroad company and of four industrial corporations. The rest was cash, household effects and personal belongings. By the fourth item of his will he bequeathed the shares of stock to his sister, Mary P. Crouch, and to his nephews and nieces -by fourteen separate bequests in form, of which the following are typical:

‘‘Fourth — I make the following bequests:
"‘(a) To my sister, Mary F. Crouch, of Van Wert, Ohio, two hundred (200) shares of the stock of the Dallas Manufacturing Company of Huntsville, Alabama, and twenty-five (25) shares of the common stock of the Chicago, Milwaukee and St. Paul Railway Company.
'‘(h) To my nephew, William 15. Chinnock, of Oakland, California, forty (40) shares of common stock of the Darlington Manufacturing Company, of Darlington, South Carolina, and twenty-five (25) shares of common stock of the Monarch Mills, of Union, Sou'th Carolina.”

At the time ¡of the making of the will the testator had shares in the companies named in the bequests in numbers identical with the shares bequeathed, except in the railroad company in which he held two- hundred more. He possessed them at the time of his death, with the exception of thirty shares of the industrial stocks which he had delivered to the Byingtons, grandnephew .and grandnieces, to whom he had bequeathed corresponding shares. Within the year following the testator’s death, dividends were declared on the stocks and paid to the executor. Doubts have arisen as to whether the bequests are general or specific. If they are specific, the gifts passed-to the legatees at the death of the testator, and the dividends belong to them; whereas, if they are general, the dividends fall into the residue. The executor asks the advice and aid of the court.

Counsel are not in disagreement that, in form, the legacies are general, not specific, and that the authoritative text-books and cases so hold. I quote one text-writer and cite the cases in this state. In the second note to section 1130, 3 Pom. Eq. Jur., it is said, concerning bequests of corporate stock that—

“Where the bequest is merely descriptive generally of the stock, shares, &c., given, the legacy is not specific, although the testator may at the time own stock answering the description, and even may own the exact number of shares given, e. g., as where he gives so much stock, or so many shares, or the like, not using additional words pointing to any identical shares, as ‘my’ stock, or the stock which .‘I now possess,’ &e.”

Norris v. Thomson, 16 N. J. Eq. 218, 542; Blair v. Scribner 65 N. J. Eq. 498; 67 N. J. Eq. 583; Mecum v. Stoughton, 81 N. J. Eq. 319; In re United States Fid. & Guar. Co., 90. N. J. Law 254.

But counsel for the so-styled specific legatees-draws attention to certain circumstances attending the making of the will as indicating indubitably- that the testator had in mind the particular shares of which he was then possessed, -viz. :• At the time of his death the shares held by the testator were divided into lots, each lot being represented by a certificate of stock corresponding as to company and number of shares with the bequests, except in three instances where the division did not conform to- the bequests. The grouping iof - the shares was done by the testator shortly before and soon after he made his will. Another thing alluded! to is, that when the testator sent the thirty shares to the Byingtons, ten shares to each, he wrote to them that he was “acting as his own administrator.”

The testator’s scheme is plain enough, but the difficulty is that so much iof it as is found extraneously is not reflected by the testament. No trace of it is discoverable there. Evidence aliundi is admissible in aid of the intention expressed in the will, but not to supply the intention. In other words, the intention cannot be sought in- the circumstances surrounding the testator at the making of the will, if it is not somewhere seen in the will itself — that is, the will must attach to it the surrounding circumstances to clarify the testator’s wish as indicated by his testament. The disposition of one’s earthly belongings, after death, is a privilege of the statute and the manner must be found within the four corners of the testament. I find nothing in the document before me to raise these bequests from the category of general to special bequests.

If the surrounding- circumstances were available, they would be of little help, and for this reason: At the death of the testator the shares were split up- into thirty-two lots of twenty-five shares each, two lots of thirty-five each, two lots of forty each, two lots of one hundred each, and in single lots of fifteen, twenty, twenty-three and twenty-seven shares, each lot being individually certified. Any one of the certificates, like in denomination, would satisfjr the allotments made by the- will, except in the case of the bequest to Mrs. Crouch, where eight of them would be required. The will does not specify and distinguish or ear-mark any one set of shares from the rest — the test of a specific legacy.

The delivery by the testator to the Byingtons of thirty shares ■of the preferred stock of the Monarch Mills, accompanied by letters stating that he was “acting as his own administrator,” shows merely that he selected that many shares out of the hundred he owned to satisfy their bequests. That they were given in satisfaction appears from his letters and their gracious acknowledgments.

The executor is advised that the dividends fall into the residue.


author: Backes, V. O.

text:
    Henry J. Hunt v. Edward I. Ludwig et al.
    [Submitted January 10th, 1922.
    Decided January 28th, 1922.]
    1. In stating the consideration for a chattel mortgage in an affidavit annexed thereto, as required by statute (1 Comp. Stal. p. J¡63 § J/), substantial compliance with the statute is all that is necessary, and it is sufficient if the affidavit discloses the nature of the debt, its cause and how it came into existence.
    2. An affidavit attached to a chattel mortgage stating that the consideration was the unpaid price of goods described, some of which were purchased from others as stated in the schedule, was insufficient as a statement of the nature of the consideration, though it would'have been sufficient if the latter statement had been omitted, so that it could be implied therefrom that the goods were sold by the mortgagee.
    3. Where the affidavit required by the statute as to the nature of the consideration for a chattel mortgage is insufficient, the true consideration cannot be established by extraneous circumstances.
    4. Where a chattel mortgage included by mistake .an amount owed by the mortgagor which was secured by another chattel mortgage, as might legally have been done, an affidavit stating the consideration to be the total amount of both debts was a false statement of the consideration which invalidates the mortgage as against creditors. ■ ,
    5. The affidavit annexed to a chattel mortgage must truthfully state the consideration, and a substantial deviation from the truth, however honestly made, will invalidate the mortgage as against creditors.
    On final hearing.

      Messrs. LehTbach é Van Duijne, for the complainant.

      Mr. Herman Krofon, for the defendants.
   Backes, V. O.

The bill -in this case-is to foreclose a chattel mortgage given by Edward and Virginia Ludwig to Hunt, the. complainant, dated January 8th, 1921, and recorded two days thereafter in the register’s 'office of Essex county. The mortgage is for $3,583.52 and the articles covered are listed in the .schedule attached to .the mortgage in groups under three captions, thus: “List of goods purchased from ‘The Co-Operative Kitchen’ and not removed from No. 8 Hillside Avenue, Montclair, N. J., up to and including January 1, 1921,” and “List of goods purchased from ‘The Georke Co.’ by Edward Ludwig; now at the ‘Whileaway Inn,’ No. 8 Hillside Avenue, Montclair, N. J.,”. and “List of goods .bought by, Edward Ludwig from other .firms for cash and now at the ‘Whileaway Inn,’ No. 8 Hillside Avenue, Montclair, N. J.”

The statutory affidavit annexed t'o the mortgage states .“that the true consideration of said mortgage is as follows, viz.: Unpaid purchase price on goods and merchandise ■ described in schedule annexed. Some of said goods being purchased from others as stated in said schedule.”

Roehlin & Brothers, the judgment creditors of the mortgagors, with execution levied upon the mortgage chattels, attack the validity of the chattel mortgage on the ground of the insufficiency of the affidavit, and because of its falsity as to the true consideration and the amount stated to be due thereon.

The statute declares chattel mortgages absolutely void as against creditors of the mortgagor, when there is no immediate delivery followed by an actual and continued change of possession of the things mortgaged, unless the mortgage be recorded, having annexed thereto an affidavit made by the holder or his agent, “stating the consideration of said mortgage, and, as nearly as possible, the amount due and to grow due thereon.” Comp. Stat. p. 463 § 4.

In stating the consideration, legal nicety is not demanded. An honest and substantial compliance with the-requirements of the statute is all that is necessary, and if the affidavit in some fashion discloses the nature of the debt owing by the mortgagor to the mortgagee, viz., the price of the debt, the cause of the indebtedness, how the debt came into existence, it will be sufficient; but that much must be clearly shown. If this.be not found in the affidavit proper, or in the affidavit read in connection with the body of the mortgage, then the mortgage must fall as to creditors. The affidavit does not in this respect meet the requirements of the statute. If it had been therein stated that the consideration was “unpaid purchase price on goods and merchandise described in schedule annexed hereto,” and had stopped there, and the statement were true, it would have been sufficient (Metropolitan Fixture Co. v. Albrecht, 70 N. J. Law 149), for, while it even then would not have stated from whom the goods and merchandise were purchased, and to whom the debt was due, the fair inference would be, reading the affidavit in connection with the mortgage, that the mortgagor purchased the goods from the mortgagee and did not pay for them and that there was a balance due. Black v. Pidgeon, 70 N. J. Law 802; Shupe v. Taggart, 93 N. J. Law 123. But when we read the words added to those just quoted, “some of said goods being purchased from others as stated in said schedule,” with the schedule, which recites that all of the goods were purchased, some from “The CoOperative Kitchen,” some from “Goerke & Co.,” and some from other firms for cash, and none from the mortgagee, the affidavit is meaningless, or, at most, it implies that the unpaid purchase price was or had been owing to the Co-Operative Kitchen and to Goerke & Company, and there is nothing from which .it may be inferred that these debts came to the mortgagee. There is nothing in the body of the mortgage to piece out this deficiency.

The circumstances leading up to the execution of the mortgage were proved at the trial with a view to establishing the bona fide of the transaction and the true consideration, but the tme consideration cannot be established aliunde. It must be found in the affidavit annexed to and recorded with the mortgage.

There is another and formidable objection. The affidavit does not state the true consideration. It appears by the evidence that the riiortgage was intended to secure the purchase price of the goods described in the schedule under the first caption “Goods purchased from ‘The Co-Operative Kitchen/ ” which were sold by Hunt to the Ludwigs for $3,035.02. At the time Edward Ludwig owed Hunt another debt of $548.50, for which he held a chattel mortgage on goods other than those in suit, and that debt was included, by mistake, in the mortgage under foreclosure. There was no legal reason why it should not have been included and Hunt have the benefit of the double security, but the affidavit states that the true consideration was the unpaid purchase price of the goods mentioned in the chattel mortgage, whereas, in truth, taking the mortgage at its face value, $3,583.52, the purchase price of the goods mentioned in the schedule was not the sole consideration — the debt secured by the $548.50 was a. part. And, on the other hand, treating the mortgage as one for $3.035.02, then, plainly, the averment that “there is due on said mortgage the sum of $3,583.52” was untrue. The variance is substantial and fatal.

The change in the judicial attitude regarding the statutory affidavit, that an honest and substantial compliance, rather than a technical adherence, is all that is required, indicated first in Metropolitan Fixture Co. v. Albrecht, supra, and emphasized later in American Soda Fountain Co. v. Stolzenbach, 75 N. J. Law 721, and Howell v. Stone, 75 N. J. Eq. 289, marked no relaxation of the rule established by the cases that the affidavit must truthfully state the consideration, and that a substantial deviation from the truth, however honestly made, will invalidate the mortgage as against creditors. Boice v. Conover, 54 N. J. Eq. 531; Miller v. Gourley, 65 N. J. Eq. 237; Tingley v. International Dynelectro Co., 74 N. J. Eq. 538; affirmed, 76 N. J. Eq. 337; Bollschweiler v. Packer House Hotel, 83 N. J. Eq. 459; affirmed, 84 N. J. Eq. 502. In Boice v. Conover it was claimed that the misstatement was the result of an honest mistake, but Vice-Chancellor Emery said that “the question is one' of the construction of a statute which defines what the affidavit must contain and makes no exception or allowance for mistakes.”

In Bollschweiler v. Packer House Hotel the consideration was stated to be a loan when, in fact, it was a loan and a contract. Vice-Chancellor Emery held the mortgage to he void for failure to state the whole consideration. A true statement of the amount due or to grow due on the chattel mortgage is an essential requisite of the affidavit, and a substantial variance renders the mortgage void as against creditors.

A decree will be advised declaring the mortgage void as against the judgment creditors.


text:
    Camden Fire Insurance Association, a corporation, v. Nellie Prezioso.
    [Submitted January 17th, 1922.
    Decided January 28th, 1922.]
    1. An insurance company’s right against a tort-feasor, through whose negligence a loss occurred, to recover the amount paid on the policy covering such loss, is not barred by a settlement between the tort-feasor and the insured for a sum less than the tort-feasor’s liability, though the insured has given a-full release, such release being a fraud on the insurer.

      1’. An insured is liable to the insurer for moneys received from a tortfeasor, through whose negligence a loss was incurred, only if he has recovered more from the insurer and the wrong-doer together than the total of his loss, and then only for the excess which he holds in trust for the insurer, whether he collected the insurance before or after ho settled with the wrong-doer.
    On final hearing.

      Messrs. Church, Harrison & Roche (Mr. Auguste Roche, Jr.), for the complainant.

      Mr. C. William Caruso, for the defendant.
   Backes, V. C.

The complainant insured the defendant against loss of her automobile resulting from fire, theft or collision. The policy contains the usual clause subrogating the insurance company to the rights of the insured' against tort-feasors. In collision with a trolley car of the Public Service Bailwa3r Company, the defendant was injured and her automobile wrecked. The damage to the automobile was appraised and adjusted at $715.69, which was paid by the insurance company to the defendant. Before this and shortly after the accident, and while the defendant was still sick abecl, an agent of the railway company made a settlement with her and her husband, paying her $130 for her personal injury, and him $20 for loss of her services, and took from them two general releases, the purport, of which they did not realize. The agent knew of the insurance on the automobile, and I have no doubt that the negotiations were confined to- the damages for personal injury and loss of services. The indications are all that way. The insurance Compaq brings this suit to compel the defendant to refund the insurance on the ground that her general release bars its suit against the Public Service Company for damages to the automobile, due to its negligence, and defeats the complainants subrogated rights, and, consequently, that she obtained the insurance money b3r fraud.

The release will not prevent a recovery by the insurance company, suing in the name of the defendant. The law is well settled and I quote the syllabus of the opinion in Fire Association of Philadelphia v. Wells, 84 N. J. Eq. 484:

“The right of subrogation accruing to an insurance company to recover from a tort-feasor, through whose negligence the loss was incurred, the amount paid on its policy1 of insurance, is not barred by a settlement between the tort-feasor and the owner for a sum less than the actual liability of the former, and for which the latter gave a full release, for such a release is a fraud upon the subrogee which will be no defence either at law or in equity to its action to recover the loss remaining unsatisfied after applying to its satisfaction the sum paid by the tort-feasor.” Monmouth County Fire Insurance Co. v. Hutchinson and C. & A. Railroad Co., 21 N. J. Eq. 107; Martin v. Lehigh Railway Co., 90 N. J. Law 258.

The loss suffered by the defendant through the alleged negligence of the Public Service Company was from personal injury, plus the damage to the automobile, $715.69. The release, though in general terms, does not reach the latter.

The insured can be called upon to account to the insurersubrogee, only if he has recovered more from the insurer and the wrong-doer than the total of hisl loss, and then only for the excess. The excess he holds in trust for1 the insurer. Monmouth County Fire Insurance Co. v. Hutchinson and C. & A. Railroad Co., supra; Fire Association of Philadelphia v. Wells, supra; Weber v. Morris and Essex Railroad Co., 35 N. J. Law 413.

A distinction is sought to be drawn between the cases cited and the one at bar, because there the insured collected the insurance before settling with the railroads, whose negligence caused the loss, while here the defendant collected the insurance after settling with the railway company. The difference in procedure does not change the principle. '

The bill will be dismissed.