author: Vroom, J.

text:
    Samuel Higbie, complainant and appellant, v. William J. Rogers, defendant and respondent.
    [Filed November 15th, 1901.]
    Where the failure of title to a portion of goods sold can be satisfactorily shown, the vendee will be relieved of the duty of establishing the defective title by proceedings at law for breach of warranty, and will be allowed a deduction therefor on his purchase-price notes secured by a chattel mortgage.

      On appeal from a decree advised by Vice-Chancellor Emery.

      Mr. James D. Carton, for the appellant.

      Mr. Charles J3. Cook, for the respondent.
   The opinion of the court was delivered by

Vroom, J.

The bill in this cause was' filed for an accounting and the redemption of a chattel mortgage, and prayed for an injunction’ to restrain the sale of the property covered thereby.

The property consisted of the goods and chattels used in a soda water business at Asbury Park. They had been sold by the defendant to the complainant and the chattel mortgage had been given to secure the payment of the purchase-money. The balance due upon the chattel mortgage, as stated in the bill of complaint, aggregated the sum of $600, and the amount claimed as an allowance for the items of merchandise alleged not to have been delivered amounted to the sum of $325. The vice-chancellor, in his opinion, classifies the claim for deduction as including three classes of items covered by the bill of sale and mortgage—first, a deficiency in the number of bottles delivered; second, a failure of title to one of four soda water sprays, and third, the failure of title to a soda water apparatus called a Tufts apparatus.

We concur in the disposition made of the case by the court below so far as the first and second class of items are concerned-—• as to the first class, because the alleged deficiency in the number of bottles was not called to the attention of the defendant by the complainant in a way that entitles him, after the lapse of time, to a deduction therefor from the balance of the purchase-price due on the chattel mortgage; and as to the second class, because no eviction being shown, nor it being shown that possession had been disturbed by any paramount title, no deduction therefor can be allowed.

In the disposition of the third class, which involved the failure of title to a soda water apparatus called a Tufts apparatus, we differ, .from the conclusion, reached by the vice-chancellor. The principle is well settled that if the failure.of title can be satisfactorily shown, the vendee will be relieved from the duty of establishing the defective title, by proceedings at law, for breach of warranty. This was the rule stated in this court, in Hoffman v. Chamberlain, 13 Stew. Eq. 663, where, by reason of the failure of title of the vendor with respect to certain of the chattels sold, the purchase-price of which was secured by a chattel mortgage, a deduction was ordered from the amount due on certain notes secured by the mortgage for this failure of .title.

It is admitted that, at the time of the execution of the bill of sale in this case, this Tufts soda water apparatus was known by both parties to the contract of sale to be in the possession of the Shark River Amusement Company, at Belmar. The testimony discloses that the defendant (Rogers) had sold and delivered this apparatus to this Belmar company; that the complainant was given to understand that the contract of sale had been forfeited, and that he could collect rent from the company, and that he supposed the $50 paid him afterwards was for rent/ It turns out that he must credit that on the purchase-price still due from the company; that he will be able to recover from it, not the property, but only the balance due, and he will lose $100 in the transaction. W.e think the facts proven are sufficient to establish the failure of title in Rogers to the Tufts apparatus at the time of the execution of the bill of sale to the complainant, and that, by reason thereof, a deduction of $100 should be made from the amount due on the complainant’s notes secured by the chattel mortgage, that being the amount of the purchase-money for this apparatus received by the vendor (Rogers).

This leads to a reversal of the decree below.

For reversal—Van Syckel, Dixon, Garrison, Gummere, Collins, Fort; Garretson, Hendrickson, Bogert, Vredenburgh, Vroom—11.

For affirmance—Adams—1.


source: Caselaw Access Project

author: Mache, Chancellor.

license: Public Domain

text:
    Gilbert Collins and Henry C. Wintringham, executors of Mary P. Wintringham, deceased, v. Mary Wardell et al.
    [Filed July 2d, 1902.]
    1. A will directing the setting aside of a sufficient portion of testator’s estate to produce an annual income of a certain sum, and directing a portion of the income be paid to a brother, and the remainder to another brother, and directing that, on the death of the brothers, the fund shall be divided among other beneficiaries, and that either of such bequests shall lapse by the death of the beneficiary before the testator, requires the setting aside of sufficient property to produce the designated income, though one of the brothers dies before the testator, as the bequests of the corpus of the fund are not to take effect till the death of both life beneficiaries.
    2. An executor required by will to set aside property sufficient to produce a certain income, must set aside an amount of property sufficient, in his judgment, in view of present and probable future conditions, to produce such income.
    3. Judicial notice will be taken of the fact that the return on safe investments has been continually diminishing for many years.

      4. A will directed executors to give a portion of the income of a certain fund to a brother for life, the remaining income to another brother for life, and each bequest was made subject to lapse if the brother to whom it was made died before testator; and it was further directed that the capital be divided among certain beneficiaries on the death of both brothers. A subsequent clause directed the division of testator’s estate among .certain beneficiaries. One brother died before testator.—Held, that the beneficiaries in the capital of the fund were not entitled to a distribution thereof, less a sum sufficient to pay the annuity to the surviving brother, by agreeing to such a division, as the income of the fund not disposed of would pass to the residuary legatees, and not to the beneficiaries entitled to the fund.
    Complainants, pro sese.

      Mr. William Brinherhoff, for the answering defendants.
   Mache, Chancellor.

The purpose of the bill filed in this cause is to obtain a construction of the fifteenth, sixteenth and seventeenth paragraphs of the will of Mary P. Wintringhain, of which the complainants are the executors.

The paragraphs of the will in qrxestion are in these words:

“Fifteenth. I direct my executors hereinafter named, out of the residue of my estate, to set apart a fund sufficient to produce an income of six thousand dollars a year and out of said income to pay to my brother William Phyfe four thousand dollars a year and to my brother Duncan Phyfe two thousand dollars a year for the term of their lives, respectively, and after their death I direct the capital of said fund to be divided equally among the said Mary Wardell, Maria Wintringham, Thomas Wintringham, Joseph Wintringham, William Wintringham and Henry 0. Wintringham.
“Sixteenth. It is my will that if any or either of the above-named legatees or devisees shall die before my death, the bequest to the person so dying shall lapse.
“Seventeenth. All the rest, residue and remainder of my estate, real or personal, of or to which I shall die seized, possessed or in any way entitled, I do give, devise and bequeath to the said Emma P. Purdy, Mary Warden, Emily Haight, Plenry C. Wintringham, William Wintringham and to Franca Wintringham, grand-niece of my late husband, and the two children now living of the said Thomas Wintringham, to be divided equally among said persons, share and share alike, and I direct that any inheritance tax to be levied or charged against my estate be paid out of that portion thereof bequeathed in this paragraph.”

The -bill charges that William Phyfe, the brother of testatrix, named in the fifteenth paragraph, predeceased the testatrix; that complainants, having duly accounted in the orphans court of testatrix's domicile, have now in hand a clear residue of personaltj' amounting to $188,129.84; that of the persons named in the fifteenth paragraph, Thomas Wintringham also predeceased the testatrix, but all the others therein named survived heir and are still living; that the complainant Henry C. Wintringham is one of the executors, and one of the persons named in the fifteenth paragraph, and also one of those named in the seventeenth paragraph of the will; and that while all the persons named in the seventeenth paragraph are still living, some of them are infants.

The grounds upon which the complainants seek the aid and direction of the court are expressed' in the bill to be that one-of the executors charged with the performance of the duties-directed by the will is also a beneficiary under both the fifteenth- and seventeenth paragraphs thereof, and, as some of the beneficiaries under the seventeenth paragraph are infants, complainants are unwilling to assume the responsibility of determining the amount of the fund to be set apart under the provisions of the-fifteenth paragraph.

Complainants also declare, by their bill, their willingness to. surrender the trust under the fifteenth paragraph, and make-immediate distribution to the parties entitled thereto of the; fund therein to be set apart, except so much as is necessary to-secure the annuity to Duncan Phyfe, who is still living, at the age of over eighty-two years. The answers admit the facts stated in the bill.

The prayers of the bill are that the will .may be construed and complainants may be advised and directed how much to set apart as a trust fund, under the fifteenth paragraph, and how much to reserve as security for the annuity to Duncan Phyfe.

Under the facts thus admitted it is obvious that the complainants are entitled to the aid, advice and direction of the court in the matter, and there has been no contention to the contrary.

The contention on the part of the answering defendants has been that since William Phyfe died during the lifetime of the testatrix, and therefore became incapable of taking the annuity of $4,000 provided for him by the fifteenth paragraph of the will, the fund directed to be set apart by its provisions should be diminished to so much as will suffice to provide the annuity to Duncan Phyfe, and all over that amount should fall into the residue provided for by the seventeenth paragraph.

I am unable to construe the language of testatrix in the fifteenth paragraph in accordance with this contention. On the contrary, I think the plain intent disclosed thereby was that the fund directed to be set apart was not only to answer for and provide the annuities to Jber two brothers, but, at a future period, to be divided among the persons to whom she specifically bequeathed it by the last clause of the paragraph. The death of William Plryfe before the testatrix cannot operate to defeat the gift of the fund, or so much of it as was given to the specific legatees thereof.

It results that complainants are, by these express provisions, required, notwithstanding the death of William Phyfe, to set .apart so much of the residue now in their hands as would be reasonably sufficient, when properly invested, to furnish an income of at least $6,000 a year. In making this determination •complainants must exercise a judgment based upon present conditions and the probable future conditions for investment. It is a matter which may be judicially noticed that the return upon ¡safe investments has been continually diminishing for many years. In the revision of the rules, lately made, this court has ■felt obliged to recognize the changed conditions, and to provide that the values of life interests should be fixed upon the rate of four per cent, returns. In the absence of evidence, I do not think 1 can judicially determine what amount should be set apart to raise $6,000 annually during the probable period of the life of Duncan Phyfe; the most that I can say is that complainants ought not to set aside less than $150,000 for that purpose.

It is proper to add that the interest of the beneficiaries in the fund, when set apart under the fifteenth paragraph, became vested, at the death of testatrix, in all those who survived her. The share of Thomas Wintringham, who predeceased her, by the provisions of the sixteenth paragraph, lapsed. This fell into the residue, to be disposed of by the seventeenth paragraph. No other construction can be given to the direction that such share should lapse.

A more difficult question arises upon complainants’ suggestion that they are willing to surrender their trust under the fifteenth paragraph, and immediately distribute among those entitled thereto so much of the fund as is not necessary to secure the annuity to Duncan Phyfe, and their request for direction in respect thereto. It involves the consideration of the period when the beneficiaries under that paragraph are entitled to come into possession of the fund vested in such of them as survived testatrix, and what, at that period, is to be divided and distributed among them.

While the annuities to testatrix’s two brothers were given to them for the terms of their lives, respectively, the period of distribution to those in remainder was fixed by the phrase “after their death.” I am unable to construe this language as permitting the severance of the fund, and the distribution of a part thereof, upon the death of one of the annuitants. On the contrary I think the period is thereby fixed by the death of the survivor of the two brothers, for at a no earlier period could the phrase “their death” apply.

As, however, all the beneficiaries named in the last clause of the fifteenth paragraph are of age, complainants might, perhaps, advance to them so much of the fund, if, at the period of distributton, such beneficiaries would be entitled to the fund and its accumulations.

Where a life interest in a fund is prevented from being operative, as, for example, by the refusal of a widow to accept a devise in lieu of dower (Macknet v. Macknet, 9 C. E. Gr. 277; Beideman v. Sparks, 16 Dick. Ch. Rep. 226), or by devise or bequest being void because the beneficiary had incautiously become a witness to the will (Jull v. Jacobs, L. R. 3 Ch. Div. 703), the devise or bequest in remainder is said to be accelerated, and the remainderman will be entitled to come into possession at once, or to receive the income or accumulation thereof.

But, in my judgment, the will before me does not admit of the application of this doctrine. It requires the setting apart of a fund, and expressly provides what shall be done with the income thereof during the joint lives of the annuitants. It does not provide for the distribution of the income which would otherwise pay the annuity of one who died, but expressly provides for distribution at the death of the survivor. It must have been within the contemplation of testatrix that one of the annuitants would die before the other. The absence of any provision as to the income which would be thus released is significant of testatrix’s intent. When, therefore, she expressly provides for the distribution, not of the' fund, which might include accumulations, and ‘declares that what is to be divided is the “capital of said fund,” I feel obliged to conclude that the right of the ultimate beneficiaries under the fifteenth paragraph is limited to capital, in distinction to income, and that accumulations of the fund pending the period of distribution are not disposed of'under the fifteenth paragraph, but fall into the residue, and are disposed of under the seventeenth paragraph.

It results that there should be no direction of a present distribution of any part of the fund when set apart under the fifteenth paragraph.

A decree will be made in conformity with these views, and complainants may have their costs out of the fund, with a counsel fee to be fixed on application.


author: Magie, Chancellor.

text:
    In the matter of Elizabeth Agnes Comfort, alleged to be a lunatic.
    [Filed October 10th, 1902.]
    1. The provisions of the “Act concerning idiots, lunatics, habitual drunkards and persons alleged to be lunatics by reason of their minds being so unsound as to render them incapable of controlling themselves and their property,” approved March 23d, 1897 (Gen. Stat. p. 1709), do not require the commissioners in an inquisition of lunacy to issue their precept to the sheriff commanding him to return a jury of only twelve persons, nor do they require the sheriff to return only twelve persons to make such inquiry.
    2. Constables of the county are not improper persons to be selected and summoned to serve on such a jury, and an inquisition is not irregular because taken before a jury composed in part of such officers.
    3. The neglect of the commissioners to charge certain pertinent requests made on behalf of the alleged lunatics, will not necessarily lead to the quashing of the inquisition, when it appears that the commissioners did! charge the jury, but their charge is not laid before the court, and it is not made to appear that they did not properly instruct the jury in the-matters which were the subject of the requests, the inquisition should not. be quashed.
    4. In this case, the evidence before the commissioners and jury was contradictory and conflicting. There was no such preponderance against the return as would justify its being set aside. But as there was thereby-raised a reasonable doubt of the propriety of the result, a traverse should-, be allowed if the alleged lunatic intelligently desires it.
    On petition.

      Mr. James Parker, for the petitioner.

      Mr. Alexander G. Young, contra.

   Magie, Chancellor.

The questions under consideration in this matter are raised by a petition filed in behalf of Elizabeth Agnes Comfort, the purpose of which is to Set aside an inquisition of lunacy, or to permit her to traverse it.

The inquisition found petitioner to be of “unsound mind, so that she is not capable of governing herself, her lands, tenemeats, goods and chattels.” It also found that she had been in that state of lunacy for about a year and six months prior to the taking thereof.

The application to set aside the inquisition is made upon several grounds, upon which it is contended the proceeding was so irregular as to require its being superseded by the issuance of a new commission.

It is first- alleged that there was error committed by the commissioners in issuing their precept to the sheriff -and requiring him thereby to produce before them twenty-four jurors, and in proceeding, when the jurors were produced under the process, to take the inquisition. The contention is that, by the provisions of “An act concerning idiots, lunatics, habitual drunkards, and persons alleged to be lunatics by reason of their minds being so unsound as- to render them incapable of controlling themselves and their property,” approved March 23d, 1887 (Gen. Stat. p. 1709), the precept should have required the sheriff to return a jury of only twelve persons in such a ease, and that the return should have been that number of jurors.

Before the passage of that act there is no doubt that the practice adopted by the commissioners and the sheriff was entirely proper. De Hart v. Condit, 6 Dick. Ch. Rep. 611. It is to be observed that the act does not expressly require the commissioners to issue their precept for only twelve jurors, but only provides for the sheriff summoning twelve, instead of twenty-four, persons for the jury under the inquisition. Nor is the language directory upon the sheriff, but only permissive. The declaration is that it shall and may be lawful for the sheriff in such cases to summon twelve jurors, instead of twenty-four. In my judgment this does not require the commissioners to issue their precept for the less number, nor require the sheriff to summon the smaller niimber. It follows that the precept is not irregular, nor was the action of the sheriff in summoning the whole jury improper.

Furthermore, as the inquisition shows that it was found by many more than the twelve jurors necessary to make it effective, no injury occurred by the alleged irregularity.

It is next alleged that the sheriff summoned among the jurors four of tile constables"of the county. Assuming the fact to be as alleged, although it does not appear upon the record, I find it impossible to discover any irregularity in the proceedings in this respect. The office of constable is not one disqualifying a citizen from being a juror in such a case. Service on such a-jury in no respect interferes with ‘performance of their 'official duty, and there was no irregularity in that respect.

It is next urged that evidence was improperly admitted of the opinion of witnesses who were not experts as medical men in respect to the question of the unsoundness of mind of the petitioner! The evidence was not taken stenographically, and what the course of it was counsel on both sides have, without objection from either side, undértaken to indicate by sworn statements made up from their respective notes. Their statements do not materially differ. Giving to the statement presented oh the part of the petitioner the fullest credence, it does not appear that error was committed in the admission of the evidence objected tó. The ’ witnesses were personally acquainted with the petitioner. They testified to facts within their own knowledge, pertinent to the question, and were then permitted to express an opinion, with respect to the facts testified to, and the observation they had made of petitioner. This is,within the rule well settled in‘this state. That their observation was not very recent, nor very prolonged, would go to the weight of their evidence, but not to its admissibility. ' ' .

It is next contended that the commissioners refused to charge the jury as requested by the counsel who appeared for the petitioner. If this fact may be considered to be made out, it does not evince error, because it appears that the commissioners did charge the jury, and in the absence of that charge, which has not been laid before me, it is impossible to say that they were not properly instructed. • <

The other objections were directed to the weight and preponderance of the evidence. It is contended that the verdict is so contrary to the weight of evidence that it should 'be set aside and a new inquisition issued, or at least that the- evidence leaves the matter in so much doubt that the petitioner should be permitted to traverse the inquisition. It is undoubtedly true that the evidence is of a doubtful and uncertain nature. Petitioner has, upon three occasions, suffered from hemorrhages upon the brain, as a result of which she is slightly paralyzed on the right side, and is considerably affected with the mental infirmity called aphasia, being unable to select and use proper words to express her ideas. It seems, however, to be the result of the medical testimony that aphasia may exist while the mental faculties of judgment, memory and understanding remain unimpaired. If that be so, a person merely affected with aphasia is not necessarily of unsound mind. But there is other evidence,' with respect to the condition of the petitioner, which is claimed to indicate that Mrs. Comfort is not only affected by aphasia, but is in a condition of dementia. The evidence referred to would seem to justify an inference that, since her attacks of hemorrhage, she has changed in character and habits; that, although she had never been a tidy woman, yet that of late she has become filthy, not only in the care of the rooms occupied by her, but also in her person; that she indulges in repetitions of exclamations which are unmeaning, or which have no relation to anything which has been said to her, or to anything which is transpiring about her, and other evidence of like character. On the other hand, there is evidence, in her behalf, that she is able to converse with persons and to intelligently transact business with them. The result reached was therefore arrived at upon evidence of a conflicting and contradictory character.

My review of the ease as presented, assuming that, where the statements of counsel are divergent, the statement of petitioner’s counsel should be accepted, does not lead me to accede to the contention that the verdict of the jury was against such a weight of evidence as to justify me in treating it as a nullity, but I am compelled to say that I deem it raised so reasonable a doubt as to the propriety of the finding that a proper discretion requires me to accede to her request for a traverse, if she intelligently desires to make such a traverse. De Hart v. Condit, ubi supra; Lindsley’s Case, 17 Stew. Eq. 564; In re Davenport, 18 Dick. Ch. Rep. 342.

It does not appear in this case that petitioner will be unable to appear before me for examination in that respect. I will therefore make an order that she do so appear at some motion day, at Trenton, or at Newark, or at Jersey City, at which I may be scheduled to be present. If her counsel conceives that she cannot safely be produced before me, and will present affidavits of her condition justifying it, I will appoint some judicious master to examine her in that respect and to report to me thereon. Van Auken's Case, 2 Stock. 186; In re Davenport, ubi supra.


author: Pitney, Y. C.

text:
    Mary Collins, by John Kenny, her next friend, v. Annie Toppin.
    [Submitted and decided April 14th, 1902.
    Filed September 8th, 1902.]
    1. A suit in the court of chancery may, by the special order of the court, under circumstances properly brought to its attention, be maintained in favor of a lunatic by his or her next friend, where the lunatic has not been so found upon inquisition and a guardian been appointed.
    2. If a bill be filed in the court of chancery in behalf of a lunatic by a next friend, without leave of the court, the proper mode open to the defendant to take advantage of such want of leave is by motion to take the bill from the files, and, under a like motion, the propriety of the original order for'leave to file the bill may be drawn in question.
    3. The cases of Norcom v. Rogers, 1 C. B. Gr. 484, and Dorsheimer v. Roorback, 3 O. B. Gr. 438, reviewed, and some of the diota there found disapproved. Palmer v. Sinmckson, 14 Dioh. Oh. Rep. 530, distinguished.
    On motion to strike out demurrer.

      Mr. William H. Gorbin, for the motion.

      Mr. George T. Werts, contra.

   Pitney, Y. C.

The bill in this cause shows that the complainant is insane and incapable of attending to her affairs; that she has not been so found by inquisition, and that she sues by next friend.

The bill does not state that the next friend has been appointed such by the chancellor, or that leave has been obtained to file the bill.

The demurrer states, as grounds, that the bill does not show that the next friend had been in any way appointed the guardian of the complainant, or had been admitted by order of the court to appear as her next friend.

In support of the motion to strike out the demurrer the complainant produced the order of the chancellor, made at the time of the filing of the bill, granting leave that it should be filed by the next friend therein named as such.

In support of the demurrer the defendant relied upon what was said by Vice-Chancellor Grey, in Palmer v. Sinnickson, 14 Dick. Ch. Rep. 530 (at p. 533). In that case one of the complainants, being insane, sued by a next friend, and the bill, as here, did not state that it was done by leave of the court; and a demurrer was filed on that and other grounds. The demurrer was sustained on the merits, as against all the complainants; but in dealing with the regularity of the suit, so far as proceeding by a- next friend goes, the learned vice-chancellor refers to the cases of Norcom v. Rogers, 1 C. E. Gr. 484, and Dorsheimer v. Roorback, 3 C. E. Gr. 438, and uses this language: “In the case under consideration one of the complainants is stated to be a lunatic, who sues by her next friend, but there is no averment that the party who thus seeks to act for the lunatic has been in any way appointed her guardian, or that he has been admitted, by any order of the court, to appear as her .next friend. In the absence of such a recital, it cannot be assumed 'that such an authority has been conferred. The face of the bill therefore shows that one of the plaintiffs cannot maintain the suit. ‘This may be taken advantage of by demurrer, and is fatal to the whole bill.”

My examination of the authorities has led me to the conclusion that a demurrer is not the proper mode of raising the question sought to be raised by the demurrer herein when there is a single complainant, but that the proper remedy is by motion to take the bill from the files. This was the course pursued in the case of Dorsheimer v. Roorback, arid also iri the case referred to by Chancellor Green in Norcom v. Rogers, namely, Wartnaby v. Wartnaby, Jac. 377.

Be that as it may, I cannot construe Vice-Chancellor Grey’s language as holding that if it appeared by an examination of the whole record that leave had been granted by the chancellor to the next friend to conduct the suit, a demurrer would lie.

I think—granting that a demurrer will lie for want of such allegation in the bill—that the demurrant cannot rely upon such omission in the face of the fact that leave was, in fact, granted.

There can, in the nature of things, be no virtue in the mere allegation in the bill of a matter, which must appear by the record »in the very suit. If such an allegation were found in the bill, it would not preclude the defendant from showing that no such leave was granted and taking advantage of the omission. And that he may, and should, do, in my judgment, by a motion to have the bill taken from the files.

And just here is found the reason, in my opinion, why the true practice is to move to have the bill removed from the files. When the bill is filed in the complainant’s name by a person other than the complainant, whether it be a solicitor or a next friend, the person so filing it must have authority for his act.

If a solicitor file a bill without authority of the complainant, the true remedy of the defendant is to move to have it taken from the files. On such motion the presumption is, of course, that the solicitor did have authority, and the burden will be on the moving party to show the contrary.

But in the case of an infant or lunatic suing by a next friend, no authority, for obvious reasons, can be presumed, and the next friend must have the leave of the court, manifested by an order made by the chancellor.

In Norcom v. Rogers, 1 C. E. Gr. 484 (at p. 485), the chancellor says: “A lunatic sues only by his committee or guardian, who is responsible for the conduct of the suit, or by the attorney-general or next friend, where the interests of the guardian clash with those of the lunatic. The right of appearing and prosecuting, or defending, any action in any of the courts of this state, in person, or by solicitor or attorney, is expressly limited by statute to persons of full age and sound memory.' * * * A bill exhibited by a person of unsound mind must have been filed without authority of law. It should, therefore, be taken from the files.” It is in that connection that he says: “The objection, if it appear upon the face of the bill, may be raised by demurrer, or by motion to take the bill from the files.” He was dealing with the case of a person who had been found a lunatic by inquisition, and the bill was filed by him against his own guardian.

In support of the position that a demurrer in such case will lie the chancellor refers to 2 Barb. Oh. Pr. 22J¡.. I do not find that the case cited in the text of that book in support of the use of the demurrer in such a case is pertinent. *

But the practice to make use of a motion to take the bill from the files seems to be thoroughly settled.

The only legitimate use, then, that can be made of this demurrer is to treat it as a motion to strike out the bill; and that would bring us back to the question whether a suit can be maintained by a lunatic, who has never been judicially declared such, by next friend;, by leave and order of the court.

I must decline to entertain that motion. It should have been made to the chancellor who made the order without advice by a vice-chancellor.

But, as I have examined the subject, I will state the result.

Chancellor Zabriskie dealt with the question in Dorsheimer v. Roorback, 3 C. E. Gr. 438. That was a motion, on the part of the defendant, to have taken from the files a bill filed in the name of an idiot, not found such by inquisition, by a next friend, he not having been authorized seto do by the court. The learned chancellor expressed the opinion “that idiots and lunatics may sue at law by next friend, to be appointed by the court; but, in equity, must sue by the committee or guardian of their estates duly appointed.” He holds that when the idiocy or lunacy is not partial, the court will not appoint a next friend, but require . an inquisition; “but when a person is only partially incapable, as one merely deaf and dumb, the court will appoint a next friend to be joined with him in the suit, and to conduct it for him.” He says that “the authorities all agree that idiots and lunatics must sue in equity by their committees or guardians.” That is-undoubtedly so when they have been found sucb on inquisition and committees have been appointed.

He further states that he found no case or authority in which it is held that they may sue by a next friend, either a volunteer or appointed for the purpose.

I have looked into the authorities on the subject, and, with great respect to that learned chancellor, I come to the conclusion that the rule stated by him is confined to cases where there is already an adjudication of lunacy and the appointment of a committee; and that, if there be none, the court may order a suit to be brought by a next friend. That has been done here.

The question was considered very carefully by Lord Langdale, master of the rolls, in the case of Nelson v. Duncombe, 9 Beav. 211, and he declared (at p. 231) that “a bill may be filed in the name of a person alleged to be of unsound mind, though not so found by inquisition, by any one professing to be his next friend.”

In re MacFarlane, 2 Johns. & H. 673, a petition was filed by a lunatic, not so found by inquisition, by his next friend, asking for the payment of money out of court; and the petition was entertained and dealt with by Vice-Chancellor Wood, and the motion granted.

The same practice was adopted in In re Law, SO L. J. Ch. 512.

In the much litigated case of Beall v. Smith, L. R. 9 Ch. App. (1871) 85, a suit was brought by a lunatic, who had not been so found by inquisition, by next friend, and without the order of the court, and carried on against his business manager, for the purpose of settling the manager’s accounts. It clearly-appeared that the next friend was pecuniarily irresponsible and the mere creature of the manager defendant, and that the suit was really managed by the defendant. Shortly after the filing-of the bill a receiver was appointed, and inquisition was then had, resulting in an adjudication of lunacy, but the estate was, nevertheless, administered by the receiver. The committee repudiated the suit, and charged and proved that it was not instituted or conducted in good faith in the interest of the lunatic, but the contrary. It was held that the proceedings, though prosecuted without the leave of the court, were valid up to and including the appointment of the receiver, and, after that, invalid. Lord-Justice James (at p. 91) says: “The law of the court of chancery undoubtedly is that, in certain cases, where there is a person of unsound mind, not found so by inquisition, and therefore incapable of invoking the protection of the court, that protection may, in proper cases, and if and so far as may be necessary and proper, be invoked on his behalf by any person as his next friend. But every person so constituting himself officiously the guardian, committee and protector of a person of unsound mind does so entirely at Ms own risk, and he must be prepared to vindicate the necessity and propriety of his proceedings if they are called in question, and to bear the consequences of any unnecessary and improper proceedings. He takes the risk, moreover, of having his proceedings wholly repudiated by the lunatic, if he should recover his reason, just as the next friend of an infant runs the risk of having his proceedings wholly repudiated on the infant attaining his full age.”

These citations from the English authorities seem to show that the practice prevails there.

The practice of suing by a next friend was adopted in the case of Kidder v. Houston, decided by Vice-Chancellor Emery, and reported in 47 Atl. Rep. 336. There a person of weak mind, not declared a lunatic, brought suit by a next friend by leave of the court.

I venture to suggest that the lack of power in this court to entertain a bill filed, by its leave, by the next friend of a person incapable of managing his affairs, by reason of mental incapacity, would show a serious defect in our system of jurisprudence. Numerous cases arise where persons have recently become insane whose rights may require protection by the aid of this court before it is possible to procure a finding of lunacy by an inquisition and the appointment of a committee, and the estate of the lunatic would suffer materially by the delay resulting from the taking of such proceedings and from their liability to miscarry.

Again, there is a large class of persons who are mentally incapable, by reason of age and the like, of managing their affairs, and whose affairs are properly looked after by competent friends, who refrain, out of regard for the feelings of their relatives, from taking proceedings to have them judicially determined incapable.

A convenient and proper mode of protecting the pecuniary rights of these persons is by the action of a next friend appointed by the chancellor.

The present case is a striking illustration of the importance of this practice. By the bill and affidavits annexed it appears that the complainant was the wife of Martin Collins, who died in October, 1900, and, by his death, she became the owner of valuable and productive real estate in Jersey City. Twice in his lifetime she had been committed to the insane hospital at Morris Plains, upon physicians’ certificates and at the instance of her husband, and was there at the time of his death. She has no children, and her sole next of kin and heir presumptive is her brother, the next friend named in the bill. He instituted proceedings in this court in December, 1900, to have her declared a lunatic and a guardian appointed. In the due course of that proceeding a jury was empaneled, and the physician in charge of the hospital at Morris Plains and Dr. John D. McGill, of Jersey City, who had been her family physician, both testified to her insanity, and that she was not likely to recover. The county physician of Hudson county and the warden—a physician—of the county hospital for insane paupers, after a single examination of the complainant, testified to the contrary, and the jury found her of sound mind. She was then discharged from the Morris Plains hospital, and went to live with the defendant in Jersey City. In June, 1901, she conveyed the real estate here in question to the defendant, and a few weeks after-wards was, without the knowledge of her brother, who lived in New York City, committed to the pauper lunatic asylum of Hudson county, under the care of the very physician who had testified before the jury to her sanity.

Hnder these circumstances, unless a bill could be promptly filed, accompanied by a Us pendens, or followed by an injunction, this valuable real estate might, by conveyance, come to the hands of a bona fide purchaser before another successful inquisition could be carried through, and the complainant compelled to pass the remainder of her days in a pauper’s bed.

The result of my examination of the subject is that I conclude—first, that a suit may, by leave of the court, be maintained in this court by a next friend in behalf of a lunatic, who has not been so found upon inquisition; second, if the bill be filed in behalf of a lunatic by next friend, without leave of the court, the proper mode open to a defendant, to take advantage of want of leave, is by motion to take the bill from the files; and, under a like motion, the propriety of the original order for leave to file the bill may be drawn in question.

This conclusion does not necessarily hold that a demurrer was not the proper remedy in the case dealt with by Vice-Chancellor Grey, where the lunatic was one of several complainants.

The foregoing has been submitted to the chancellor, and he concurs therein.


text:
    Marie Von Schuller v. The Commercial Investment Building and Loan Association.
    [Submitted and decided April 14th, 1902.
    Filed September 8th, 1902.]
    A mortgagee promptly delivered to the proper register a mortgage covering both real and personal estate, informing him of such fact and directing him to record the same accordingly. The register entered it as a real estate mortgage on his private index, and in about two weeks recorded it in the book of real estate mortgages. Nearly thirty days afterwards it was entered in his private index for chattel mortgages, and, in due course of business, recorded in the book for chattel mortgages. The register retained possession of it in his office until after it was recorded as a chattel mortgage. An inspection of the instrument indicated its character. The private indexes kept by the register were not recognized by the statute. P. L. of 1898 pp. 686, 687 §§ 41, 4%, require that instruments be recorded without delay.—Held, that the mortgagee was entitled to the benefit of the recording acts as of the date the mortgage was delivered to the register, and therefore a subsequent execution creditor could not claim the property covered by the mortgage.

      Heard on bill, answer and proofs.

      Mr. Max Salinger, for the complainant.

      Mr. Ilenry V. Gondict, for the defendant.
   Pitney, Y. C.

The contest in this cause is over a sum of money in the hands of the sheriff of Hudson county, the proceeds of the sale 'of certain goods and chattels. The complainant claims by virtue of a judgment and execution recovered against one Witz, and the defendant claims under a chattel mortgage made by the same person, executed and recorded prior to the entry of the judgment and the levy óf the execution.

Two objections are made by the complainant to the defendant’s right of priority—first, that the affidavit annexed to the chattel mortgage is insufficient (a careful reading of it discloses no defect); and second, that the mortgage was not recorded promptly after its execution and delivery.

The facts are that the mortgage covers both real and personal property, and was promptly delivered to the register of the county of Hudson, where the parties all reside and where the property is situate, for record. The evidence satisfies me that the messenger who delivered the mortgage to the register’s deputy stated to him at the time that it was a mortgage of both real and personal property, and should be recorded as such— once as a mortgage of real estate, and once as a mortgage of chattels. This was probably misunderstood by the deputy receiving the paper. He entered it immediately on a book, which lie kept for his own convenience, called an index, but which I have always heard called a tickler. At the time of entering it he stamped on the back the date of delivery, with the blank for the hour filled in in ink. The register kept two of these indexes, one for mortgages of real estate, and one for mortgages of chattels; and the entry of the receipt-of this mortgage was in the book of mortgages of real estate only. It was transcribed, in the regular course of business, about two weeks or a little more after it was received, in the book of mortgages of real estate. Twenty-seven days after it was so delivered it was entered as a mortgage of chattels in the index, or tickler, of chattel mortgages, and, in due course of business, recorded in the proper book of chattel mortgages. In the meantime it was safely kept by the register among the instruments left with him for record, and was not taken from the office.

Upon these facts I am clearly of the opinion that the mortgage is entitled to the benefit of the recording acts. The mortgagee performed his whole duty, under the statute, when he delivered the mortgage to the recording officer, with directions how to record it; and I may add that an inspection of the document at once disclosed its character to be both that of a mortgage of land and a mortgage of chattels, for attached to it, and, when folded, immediately covering the acknowledgment, was the proper affidavit required by the statute for a chattel mortgage. There was nothing in the endorsement on the mortgage, when delivered to the register, to indicate whether it was a mortgage of chattels or a mortgage of land; and, in addition to the affidavit of which I have spoken, an examination of the body of the instrument disclosed the fact that it was a mortgage of chattels.

If the register had made no entry whatever of the mortgage upon his temporary index, or tickler, the record of it would have been perfect, and, when transcribed, would relate back to the day of its delivery for record.

The memorandum of the receipt of the instrument in a book kept for that purpose is not a record, in any sense of the word, upon which any person searching in the clerk’s or register’s office has a right to rely. It is not kept in pursuance of any provision in the statute regulating that subject. The statute (Rev. of 1898 pp. 686, 687 §§ k-1, makes it the duty of the clerk to provide certain books, and to record, without delay, every instrument of the character mentioned in section 20 in the proper book; but it is a matter of common knowledge that such instruments cannot be, and are not, immediately recorded. Every person who examines the records for instruments of that kind knows that there are a number of instruments waiting to be transcribed, and it is his duty to look among those instruments if he wishes to make a complete search to date; and he has no right to rely upon the index, or tickler, kept by the register or clerk. So that the failure to enter the chattel mortgage in the index, or tickler, is a matter of no consequence; and the fact that it was not transcribed in the book of chattel mortgages until four weeks, or thereabouts, after it was lodged for record, does not affect the validity of its record. The mortgage was there al'l the while, ready to be seen by any person who might have occasion to examine the records for chattel mortgages against the mortgagor. It was not distinctly proven, but it is probable, that the fact that the register had omitted to record it as a chattel mortgage was discovered by a messenger sent to take the mortgage from the register’s- office, and the register thereupon reminded of his duty. But that circumstance, if it were proven, would not affect the result.

I will advise a decree in favor of the defendant.


text:
    Henry E. Lutjen v. Helene Lutjen et al.
    [Submitted March 11th, 1902.
    Decided April 4th, 1902.
    Filed September 8th, 1902.]
    1. Under Gen. 8tat. p. 8760 § 19, providing that for raising the portion of children of a testator, born after the making of the will, the devisees and legatees therein shall contribute proportionately out of the part devised or bequeathed to them, the amount due to such after-born children from each legacy is to be ascertained as if such legacy were the only property disposed of; as where a testator left a legacy to his only son at the time the will was made, and the balance of his estate to his wife, and two children were born thereafter, the son’s legacy would be ascertained by deducting from the whole amount thereof two-thirds of a balance left after excluding one-third of the whole amount as representative of the widow’s share in cases of intestacy, which, as the widow took under the will in lieu of dowel', would go to the legatee without deduction.

      2. Where a testator gave his son a specific legacy, with a residuary legacy to his wife, and there were children born after the making of the will, no commissions for settling the estate could be added to the amount deducted from the son’s legacy as the portion of the after-born children, but they must come .out of the residue of the estate.
    3. A testator, after executing a will, in which he gave a legacy to his son, who was six years old, immediately married a second wife, whom he had made residuary legatee in the will. The son regarded his stepmother as his mother, and after his father’s death lived with her until he was twenty-three years old, the age at which he was to receive his legacy. Testator had two children by his second wife, and, some time after his death, the widow, who was also administratrix cum, testamento annexo, told her stepson that the birth of these children destroyed the will, and that his share of the estate would be a certain amount less than was really due him. Accordingly, he, relying on her statement, accepted the amount proposed by her, and executed a release of his legacy, which was prepared by the county surrogate at the instance of the stepmother. The son was a man of slender mental capacity, totally ignorant of business, and unassisted by anyone in making the settlement.—Held, that he was not bound by the release.
    4. Though the stepson did not institute suit to recover the residue of his legacy for ten years, it appearing that he did not discover the error in the settlement until a few months before suit was brought, and that those months were spent in fruitless endeavor to obtain an amicable settlement, he was not barred by lapse of time from maintaining the suit.
    On final hearing on bill, answer and proofs.

      Mr. Maximilian T. Rosenberg, for the complainant.

      Mr. Charles L. Corbin, for the defendants.
   Pitney, Y. C.

The complainant is the son and a legatee named in the will of John Henry Lutjen, and the defendant Helene Lutjen is Ms stepmother and the executrix of the will and residuary legatee and devisee. The object of the bill is to set aside a release given by the complainant to Ms stepmother in full for Ms legacy. The allegations are that the amount paid him therefor—$5,000—was not equal to the amount actually due upon a proper estimate of the same, and that no computation was made for that purpose by Mm, but that he accepted that amount, relying upon the statements of his mother in that behalf.

The facts are as follows:

The testator was, at the time of making the will (1874), a widower, with one child, the complainant, who was then about six years old. The testator was about to marry the defendant Helene. By his will he bequeathed to the complainant $10,000, to be paid to him when he should arrive at the age of twenty-three years, together with the interest thereon, payable to him half yearly, the said sum to be invested in good securities or on bond and mortgage. The remainder of the estate, real and personal, he bequeathed and devised absolutely to the defendant Helene, with a provision that said bequest and devise were to be in lieu of her dower. The clause is as follows:

“I give, devise -and bequeath unto Helene, to whom I am engaged to be married and who is my intended wife, to have and hold same forever, but this provision is intended by me and shall be accepted by her in lieu and bar of dower in my estate.” ■

After the making of the will the testator had two other children born. He died in the year 1883, when the complainant was about fifteen years old, leaving his widow (Helene), the complainant and the two after-born children. The widow administered cum testamento annexo. The testator left personalty amounting to $12,263.21 and real estate estimated to be worth $6,000. These funds were deposited in various savings banks, and so remained until the giving of the release complained of. They were never invested as directed by the will.

On the marriage of the testator the complainant became a member of his family, and regarded his stepmother in the light of a mother. She brought him up. He continued to live with her and her family after his father’s death, and after he became of age, and until about five years before the filing of the bill, when he married. He, at all times, as appears from the testimony, regarded the defendant Helene as the head of the family.

Some time after his father’s death he was informed by his mother that the effect of the birth of his half-brother and sister was to entirely destroy the will, and that when he became twenty-three years of age there would be about $5,000 coming to him. Accordingly, when shortly after he attained the age of twenty-three his mother proposed to pay him that sum, he accepted it without question.

The release was prepared by the surrogate of the county, at the request of the defendant Hélene, and was probably based on some sort of rough calculation made by him as to the amount which would be due to the complainant, but the latter took no part in the affair.

Two questions were debated—first, Was there any mistake made? and second, Has the time which has elapsed been so great as to bar the complainant’s remedy?

With regard to the first question: The difference of opinion between the respective counsel lies in the mode of ascertaining the amount due to the after-born children and of distributing it among the beneficiaries of the will.

The complainant’s theory is that the amount due the after-born children from each legacy is to be ascertained as if that was the only property disposed of, and the legatee is to contribute his share of it—•that is, that the contribution should be made distributely, and not collectively. Eor example: He says the legacy of $10,000 given to the complainant must be dealt with thus: First ascertain the amount which the after-born children would receive thereout if there had been no will; after deducting that sum, give the balance to the complainant. The result of that method would be that the legacy to complainant would be disposed of as follows: Deduct one-third of it as due to the widow absolutely in case of intestacjr, and there remains $6,667 to be divided among three children, making $2,222 to each, or $4,444 to the two after-born children, which deducted from the whole $10,000 leaves $5,556 to the complainant. By this mode of ascertainment, the share—$3,333—which would have gone to the widow in case of intestacy, goes, in accordance with the terms of the will, to the complainant.

The residue of the whole estate given by the will to the widow is to be disposed of in the same way, and all of it, except the share which would go to the two after-born children, in case of intestacy, will go to the widow under the residuary clause.

This method, the complainant argues, satisfies the language of the statute, and also conforms to the rule which has been adopted by the courts in the construction of it, namely, that, except so far as it is necessary to make up the shares of the after-born children, the will is to stand.

That rule is stated by Chancellor Runyon, in Wilson v. Fritts, 5 Stew. Fq. 59, as follows: “The will stands, except so far as the disposition of property under it is disturbed by the necessity of contribution to make up the portion of the posthumous child. The devisees and legatees, those to whom the testator has given his property by his will, must contribute from that which is devised or bequeathed to them by the will such a portion as the pretermitted posthumous child would have been entitled to out of the estate of which the testator was possessed at the time of his death had the father died intestate.”

The language of the statute is:

“Towards raising which portion or -portions [of the after-born issue] the devisees and legatees or their representatives shall contribute proportionably out of the part devised and bequeathed to them by the same will and testament.”

Applying this rule to the residue devised to the widow, we find that the two after-born children will each take an undivided one-third part of the land, subject to their mother’s right of dower, and the other one-third, which, but for the will, would have descended to the complainant, will pass, by the will, to the widow.

I presume that the better opinion is that, under our statute two equal undivided one-third parts of the land descended to the two after-born children immediately upon the death of their father.

Counsel for the defendant suggests and urges a different mode of solving the problem. He contends that the whole estate, real and personal, must be thrown into hotchpot, and therefrom must be taken, first, one-third of the personalty which the widow, in case of intestacy, would receive outright, and then the value of her right of dower must be determined according to the life tables, and the personalty and the realty, after such deduction, -added together, and the amount which the after-born children will take be ascertained, and then the amount which the complainant and the widow shall severally contribute be ascertained by the proportion which the whole estate, excluding the widow’s right of dower, bears to the amount which the after-born children take.

As worked out by him it is as follows:

“It is agreed that the laud was worth.......... $6,000 00
“Of this, the value of the widow’s dower at the
age of 34 is, in round numbers, 23% #...... 1,410 00
“Value of decedent’s land............... $4,590 00
“The personalty was......................... 12,263 00
“Total estate.........................$16,853 00
“Deduct widow’s 1-3 of personalty............. 4,087 00
“Share of three children...............$12,766 00
“Share óf 2 after-born children, 2-3rds.. $8,510 00
“The percentage is ascertained as follows:
“$8,510 $10,853 ............................. 50%*
“Deduct this percentage from the legacy of $10,000, leaves $4,950,” instead of $5,550.

The complainant’s mode of solving the problem is that adopted by the supreme court of Illinois, in the case of Ward v. Ward, 120 Ill. 116. The Illinois statute is precisely like our statute. The court cited several authorities from Virginia and Kentucky, .and seem to have given the matter careful consideration.

I prefer the complainant’s plan. I think the real estate should be kept by itself. In the first placo, I think, under the statute, it would descend at once and vest in the two after-born children; .and, in the next place, the complainant should not be bound by .a mere valuation of it.

Besides, the will declares that the provisions for the widow shall be accepted by her in lieu of dower. Now, as the land passed with the residue to the widow, the provision barring ■dower would have been an idle one, as between the complainant and the widow, if no other children had been born, because it •did not diminish the complainant’s legacy. But the incoming •of after-born children alters the situation. The widow cannot claim both legacy and dower if the enforcement of such clause •disturbs the testator’s scheme, and, in the actual situation, it does disturb it, and seems to me entitles the complainant, under the actual circumstancés, in making up the contribution to be-mads by each, to have the real estate, if it is brought into the-estimate, to bo put at its full value, -without any deduction for the widow’s right of dower.

If wo adopt the defendant’s scheme of throwing the realty and personalty into hotchpot, excluding the widow’s dower as against-complainant, the result will be as follows:

Personalty.......................:.........$12,263 00
Realty .................................... 6,000 00
$18,263 00
Share of after-born children.................. 8,510 00

of which complainant must furnish a portion duo to the relation between $18,263 and $8,510, which would make the amount of complainant’s contribution $4,659, instead of $5,050 under the complainant’s plan, a difference of $391, and a difference of $215 from the complainant’s plan.

Upon the whole, I adopt the complainant’s rule for solving' the problem, with the result that the complainant was, on attaining the age of twenty-three years, in 1891, entitled to the sum of $5,555, together with interest thereon from the time of his-father’s death (since there was no time spent in collecting and investing the money), at such rate of interest as it is reasonable-to believe the widow must have received free and clear of taxes,, which rate I fix at four per cent.

It would seem that a large part of the money was deposited in different savings banks, and, as I recollect, it was admitted that that rate of -interest was received on all of the deposits,, free of tax.

The widow is not. entitled to any abatement of any commissions for settling the estate. That comes out of the residue of the estate, and is very properly a matter between her and the after-born children. The inventory amounted to $12,166.73, and the interest collected before the settlement of the account made-it $13,014.28, and from this was deducted the commissions and expenses. The complainant was entitled to his legacy free and clear of commissions. His father died on March 10th, 1883, and the legacy was paid on October 21st, 1891, eight years and seven months thereafter. Interest on $5,555, at four per cent, a year, for eight years and seven months, would be $1,907.20, making a total of $7,462.20.

liad I adopted the defendant’s scheme of ascertaining the complainant’s share, the interest would have been $1,699.50, which, added to the principal of $4,950, would make $6,649.50. This shows that, whichever plan had been adopted, a clear mistake was made by the deputy surrogate, or whatever person calculated the value of the complainant’s share in his father’s estate.

But the defendant claims that the complainant lived at home for many years, and had support and maintenance. The facts on that subject are as follows:

The complainant, at the time of the father’s death, as we have seen, was fifteen years old. He had stopped going to school, and was working for a druggist, intending to learn the business, and received $3 a week salary, which he had turned over to his father. His father kept a shoe store, and, after his death, his stepmother continued it, and, at her request, the complainant came home to assist in the business at the shoe store. He received his board and $2 a week for his services. That continued about two years. He clothed himself out of that sum, and saved some little money; took a trip to Germany, as steerage passenger, visited his stepmother’s relatives there for a short time, and worked his passage home. He then' obtained a position in New York City, in a hardware store; began with $3 a week, and continued in that business until his salary amounted to a competent sum. Out of the $3 a week he reserved enough to clothe himself and cover such small daily expenses as he incurred, and handed the balance to the defendant for his board; and he paid board to her until he was married, increasing the amount from time to time, as he could afford it, to $5 a week. When he first went into business in New York he assisted his stepmother in the shoe store at night, and also purchased goods for her in New York during his lunch hour.

I infer from the evidence that there may have been a period of five years, say from 1883 to 1888, during which the complainant was a slight burden to the defendant in the way of expense over and above the benefit in labor and money which she received from him. I am of the opinion that $1 a week during that time, or say $350 in all, will entirely compensate her for the supposed deficiency in his actual payments and the value of his services. Besides, the defendant had the benefit of the actual compounding of the interest received on his legacy from the time of her husband’s death—1883'—up to the time of the payment of the $5,000 in 1891. So that,,making due, allowance for that sum, there was due to the complainant when the settlement was made the sum of $7,463.30, less $350, making $7,313.30. This calculation is subject to correction if I have made any mistake in dates or figures.

The next questions are: How far is complainant bound by his release; and what effect on his rights must be given to the delay of nearly ten years in the filing of his bill?

The complainant is a man of slender intellectual capacity, and, at the time of the release, was entirely unfamiliar with business affairs. He employed no counsel or business friend to assist him, but relied upon his stepmother’s statement of the amount due. The settlement, so far as there was one, was made at the surrogate’s office, and had the apparent sanction of that semi-judicial officer, whose duty the complainant might well have thought it was to protect his rights and ascertain judicially the amount due him. His stepmother had stated to him that the will was annulled by the birth of her children. This was not true in law; but she cannot complain that he relied upon it. Nor can she complain that he relied upon her statement that only $5,000 was due him, when a much larger sum, upon a proper accounting, was due. He accepted and relied upon her simple assertion, without any explanation of the mode of arriving at. that result. Here, again, she cannot complain that he did so rely.

If the mode of ascertaining the amount due him had been shown to him, if the scheme of solving the problem arising out of the after-birth of his half-brother and sister had been laid before him, and he had assented to it, after opportunity to examine it, a different ease would present itself. But, by the case presented, the mistake was wholly that of the defendant, and is one for which she is wholly responsible, and for the making-of which the complainant cannot be charged with any neglect, nor for his failure to discover it at that time. At least, it does not lie in the mouth of the defendant to charge him with such neglect. If, then, the bill had been filed shortly after the transaction, there could be no defence on the ground of the natural sanctity due to a solemnly-executed instrument.

Then, as to the lapse of time. This is an action for a legacy, to which the statute of limitations does not apply. Hedges v. Norris, 5 Stew. Eq. 192. The rule there stated and established has never been disturbed in New Jersey. The only reason for applying the statute of limitations to an action in equity for a legacy is that, by a statute, an action at law is given; but it is doubtful if in the present case an action at law would lie. In fact, the statute of limitations was not set up, either in the answer or at the argument; but the long delay was urged.

But it appears that the complainant did not discover the error until a few months before the bill was filed, and the intervening time was spent in futile efforts to adjust the matter without suit. The complainant has not slept on his rights after he became aware of them. The case, in that respect, is somewhat like that of Lindsley v. Dodd, 8 Dick. Ch. Rep. 69, and, on appeal, 8 Dick. Ch. Rep. 652; and, again, 12 Dick. Ch. Rep. 334.

The claim is not what is known as a stale claim—one that has been slept on after it was known; and I think that, under the circumstances, it does not lie in the defendant's mouth to complain of it. She does not occupy the position of a disinterested trustee. She is the residuary legatee under the will, and the mother of the after-born children.

Then it is said that the defendant has settled with one of her own children on the basis of the release given by the complainant. It appears that she has conveyed some of the real estate to one of her children; but the evidence fails to satisfy me that it was done upon any nice calculation of the amount due that child based upon the release in question. Be that as it may, the two after-born children, are parties to this suit, and' will be bound by its result; and the mother can recover from them whatever they, ought to contribute toward the amount she will be obliged to pay under the decree made herein.

I will advise a decree for the amount due the complainant á,t the time the $5,000 was paid, less that sum, with interest at four per cent, on the balance to date, together with costs.

I have assumed four per cent, as the amount of interest which the defendant received upon the several deposits in savings banks which constituted the bulk of her husband’s estate. The'defendant is at liberty, before decree signed, to show, as she can easily do by reference to the books of the several banks, that the interest actually received by her was less than four per cent. Again, the defendant swears that she paid the complainant a little more than $5,000. The complainant denies this. The payment was by transfer of savings bank accounts. Here the issue between them can also be easily settled by a reference to the several accounts, actually transferred. If she paid-more than $5,000, she will have credit for it.


text:
    The Lembeck and Betz Eagle Brewing Company v. Annie Kelly and Edward W. Burger, executors of the last will and testament of Simon Kelly.
    [Submitted December 9th, 1901.
    Decided March 27th, 1902.
    Filed September 8th, 1902.]
    1. The question whether the mortgage of a leasehold is violative of a covenant in a lease against assignments, so as to work a forfeiture of the leasehold, is rendered immaterial, in proceedings to foreclose the mortgage, by a foreclosure sale; the risk of the question being taken by the purchaser, and the contest thereafter concerning merely the proceeds of the sale.

      2. Executors of a deceased mortgagor of a leasehold may, on foreclosure, interpose, in behalf of creditors whose claims accrued before the recording of the mortgage, the defence that' the mortgage was void as against such creditors by reason of failure to immediately record it, and want of change of possession.
    3. P. L. of 1898 p. 670, revising the act concerning conveyances, authorizes (section .21) two classes of instruments to be recorded—first, those affecting title to land, including leaseholds for not less than two years, and secoiitb; those affecting chattels. Section 41 provides for the registry of leases of lands in one book, assignments of leases by way of mortgage in another book, entitled “Mortgages,” and of chattel mortgages in a third book. Section 53 concerns instruments which “shall have been” or shall be duly executed, &e. Section 54 avoids unrecorded instruments as to subsequent judgment creditors, &c.—Held, that the mortgage of a ten-year leasehold was within the purview of the act, though executed a year prior to its passage, and was properly recorded as a mortgage affecting real estate, so as to be effective against creditors of the mortgagor whose claims accrued between its execution and recording.
    4. A mortgage of a ten-year leasehold is an instrument which “conveys” an interest in land, so as to be within the purview of the title of an act entitled “An act respecting conveyances” (P. L. of 1898 p. 670), and is properly recorded, under section 21, dividing instruments capable of record into two classes, the first of which includes those affecting title to land and leases for not less than two years, as a mortgage of realty; and it is not necessary, to make such a mortgage good against creditors, that it be recorded in conformity to P. L. of 1S85 p. 818 {Gfen. Stat. pp. 2118, 2114), governing the recording of chattel mortgages.
    On final hearing on bill, answer and proofs.
    The complainant, the Lembeck and Betz Eagle Brewing Company, files its bill against the defendants to foreclose a mortgage given to it by Simon Kelly, deceased. The mortgage is dated September 1st, 1896, and was given to secure the sum of $10,000 on-the 1st day-of .March, 1897, with interest payable semi-annually. The instrument- was duly -acknowledged by Kelly in April, 1897, and recorded as a mortgage of real estate on March 1st, 1900, three'and' one-half years-after its date,'and nearly three years after its acknowledgment.'
    Kelly died May 31st, 1900, leaving a last will and testament, of which the defendants are the executors.
    The estate of Kelly is hopelessly insolvent:
    The subject-matter of the mortgage is a leasehold estate in certain lands in the county of Hudson, which estate was vested in Kelly by virtue of an indenture of lease dated August 26th, 1895, made by the West Shore Railroad Company and the New York Central Railroad Company to said Kelly.
    By that indenture the lessors “granted, demised and farm let” to Kelly certain lands, particularly described, to have and to hold the same unto the said Kelly, his executors, administrators and assigns, from the 1st day of September, 1895, for and during and until the end of the term of ten years next ensuing, reserving a rent of $120 a year, which rent Kelly agreed to pay, besides
    ■“ail taxes, assessments and payments extraordinary as well as ordinary, ■which shall, during the term hereby granted and during any renewal thereof, be imposed or grow due and become payable out of or for the said demised premises, or any part thereof.”
    There is also a clause restricting the assignment of the lease; .also one against maintaining any nuisance on the premises.
    The indenture also contained a covenant, on the part of Kelly, within two years from the commencement of the term, to
    ■“erect and build, or cause to be erected and built, on the premises hereby demised a good and substantial building for hotel purposes, at least two stories high, upon plans to be approved by the lessors.”
    There is a further clause providing that if Kelly should build such a hotel and otherwise perform his covenants, then the lessors, their successors and assigns, shall, and will, at the end and expiration of the term hereby demised, grant and execute unto Kelly, his executors, administrators or assigns, a renewal of the lease for the further term of twenty-one years, at a rent to be fixed by agreement or arbitration.
    It was further agreed that
    “if the lessors, at the expiration of the term of ten years, or at the expiration of any term that may be granted thereafter by any subsequent renewal, elect and choose to pay unto the party of the second part, his executors, administrators or assigns, the value of the said hotel building, to be ascertained by arbitration, and shall actually make such payment or tender the same, then the. said Kelly, his executors, administrators or assigns shall deliver up the said hotel building in the same order and condition in which it was at the time of its valuation, and all and singular the other premises hereby demised, into the hands and possession of the-parties of the first part, their successors and assigns, without fraud or' delay.”
    This indenture was duly acknowledged and recorded in the-clerk’s office of Hudson county on October 4th, 1895.
    The mortgage recites the demise and description of the land-contained in the indenture, and also an indebtedness from Kelly to the complainant, and then proceeds “to grant, bargain, sell,assign, transfer and set over unto” the complainant the lease,“with the buildings and improvements thereon erected, together with the appurtenances, and all the estate and rights of the-parties of the first part,” to have and to hold, &c. Then follows-the usual condition found in mortgages of real estate.
    Kelly took possession and erected the building in accorda'ncewith his covenant, and occupied it until his death. The defendants took possession, as his executors, and occupied the premises-at the filing of the bill.
    The defence set up in the answer and disclosed by the proofs is twofold—first, that the mortgage from Kelly to the complainant was a breach of that clause in the lease which forbids am assignment, and hence destroyed at once the term.
    The second defence relied on was that the complainant’s mortgage is no more and no less than a mortgage of chattels, and hence, as it was not immediately recorded, and there was no change of possession, and it lacked the affidavit required to a chattel mortgage, it was void against creditors who became suato before it was actually recorded, and that Kelly died hopelessly insolvent and owing large sums of money, most of which indebtedness was incurred prior to the recording of the mortgage, and;that the executors, in the interest of the creditors, set up thatdefence.
    ' By an interlocutory order made in the cause the leasehold' interest, with the buildings and fixtures, was sold by a master,, and the contest is now over the proceeds of the sale.

      Mr. John Griffin, Mr. Robert 8. Hudspeth and Mr. Henry Puster, for the complainant.

      Mr. Maximilian T. Rosenberg, for the defendants.
   Pitney, Y. C.

The position taken by the defendants, that they represent the •creditors, and are entitled to set np any defence against the -mortgage that creditors who became snch before the 'recording •of the mortgage could set up, is well established. Currie v. Knight, 7 Stew. Eq. 485.

If the mortgage would be void against creditors of Kelly if .attacked by them in his lifetime, it mpst be held void as against his executors, to the extent, at least, that it will satisfy the ■creditors.

The point taken that the assignment of the lease by way of mortgage was a breach of the covenant which at once terminated •the term, is rendered immaterial-by the sale of the mortgaged premises. The purchaser at the sale took the risk of that question. The contest here is over the proceeds of the sale.

The principal question is as to the character of the complain.ant’s mortgage and the effect of its record at the time and in the manner disclosed by the case—that is, as a mortgage of real estate, and not as a mortgage of chattels. The complainant •contends that it was properly so recorded, and took effect from the date of the mortgage as against all creditors.

The complainant relies on the act of April 4th, 1872. P.„ L. .of 1872 p. 98; Rev. of 1877 p. 157; Gen. Slat. p. 857. The title of the act is “A further supplement to an act entitled ‘An .act respecting conveyances/ ” The language of the act, modified by the revision of 1877, is this:.

“Seo. 19. That all leases for estates in lands and tenements for life, or for a term not less than two years, being duly signed, sealed and acknowledged or proved, in the manner herein prescribed for the acknowledgment or proof of deeds of conveyance, may be recorded in the same manner as such deeds may be recorded; and such record shall be notice to ■subsequent judgment creditors, purchasers, lessees and mortgagees.”

Section 20 provides

•“that the estate of any such lessee in the demised premises, the .lease -whereof shall have been recorded in manner aforesaid, shall be liable to sale under a.judgment or decree, in like manner, only as estates of freeíhold are now liable to be sold thereunder.”

Section 21 provides

“that any assignment of such lease so recorded, such assignment being, signed, sealed, acknowledged or proved in manner aforesaid, may be recorded in like manner; and the record thereof shall have the same force- and effect as the record of the original lease.”

That is, it shall be notice to subsequent judgment creditors.

Section 22 provides

“that the assignment of such leases and leasehold interest by way of mortgage and as security for moneys loaned, shall be valid; and the same beingduly signed, sealed and acknowledged in manner aforesaid, may be recorded or registered in like manner as mortgages of the freehold now are,, and the record or registry thereof shall have the same force and effect.”

It is important to observe that sections 19 to 22, inclusive,, above recited, contain no penalty for non-recording, unless it may be inferred from the closing words of section 22. ■

■ Complainant further relies upon the act of April 21st, 1887' (Gen. Stcit. ¶. 19S6), which deals with terms of ten years and upwards, and, in a series of sections, places them, together with transfers and mortgages of the'same, upon the footing of conveyances of freehold estates.

Finally, complainant relies upon the revision of the “Act concerning conveyances,” found in P. L. of ■1898 ¶. 670, and-especially upon sections 21, 41, 42, 53, 54 and 66 of that act.

•Section 21 enumerates the various instruments which may berecorded, and divides them into two classes—first, those affecting title to land, in which is included leases for a term not less than two years, and second, deeds not affecting title to lands, butaffeeting goods, chattels and personal property, and provides for a distinct registry of each class.

The forty-first section provides for the registry of leases of lands in the same book, to be entitled “Deeds,” in which other conveyances of land are registered; and all assignments of leases, by way of mortgage, in .a book.to be entitled “Mortgages;” and all chattel mortgages in a book to- be entitled “Chattel Mortgages;” thus making a clear distinction between mortgages of leasehold estates and mortgages of pure chattels.

The forty-second section makes it the duty of the clerk to record all instruments presented to him properly acknowledged.

The fifty-third section speaks of instruments which shall have been or shall be duly executed or acknowledged.

The fifty-fourth section provides that all .instruments mentioned in the twenty-first section shall, until duly recorded or lodged for record in the county clerk’s office,

“be void and of no effect against subsequent judgment creditors, without notice, and against all subsequent tona fide purchasers and mortgagees for valuable consideration, not having notice thereof, whose- deed or mortgage shall have been first duly recorded.”

And the sixty-sixth section provides that the lease of any lands, tenements or real estate for a term not less than two years, shall be liable to sale under a judgment or decree, in like manner as estates of freehold are now liable to be sold thereunder.

The mortgage of complainant was recorded under the provisions of this act; and one question is whether it is entitled to the benefit of the provisions of that act, it having been executed more than a year before the act was passed. I have been unable to find anything in the act to show that its provisions were limited to instruments, executed after its passage. All the indications are that it had application to all instruments.

The twenty-second section, in providing for acknowledgments taken out of the state, provides for instruments heretofore made and executed, or hereafter to be made and executed, that shall have been or shall be acknowledged by the party, &c.

I.can see no reason why the complainant should not have the benefit of this act.

It is thoroughly settled in this state, by the decision of the court of errors and appeals in the case of Flemington National Bank v. Jones, 5 Dick. Ch. Rep. 244, and, on appeal, 5 Dick. Ch. Rep. 486, that, in the absence of a fraudulent intent otherwise manifested, the mere withholding from the record of a mortgage of real estate for any period of time will not postpone it to mortgages recorded after its record.

There is in the present case no contention, or room therefor, that the complainant’s mortgage was withheld from record under such circumstances as would postpone it to any creditor acquiring a lien subsequent to the date of its actual record. If this be so, it seems to follow clearly enough that if this mortgage is to be dealt with as an ordinary mortgage of real estate, complainant is entitled to the relief it asks.

The defendants, however, in answer to these positions, claim that the mortgage in question, although it comes within the purview of sections providing for recording of a mortgage of this kind in books provided for that purpose, yet is, after all, a mortgage of chattels, and subject to the special legislation' aimed at that species of security, and particularly to the fourth and ninth sections of the act of May 2d, 1885 (P. L. of 1885 p. 818j Gen. 8tai. pp. 211S, 211k), which was under consideration in the case of Roe v. Meding, 8 Dick. Ch. Rep. 350.

It is conceded that if the mortgage' was properly recorded under the act of 1898, and is entitled to the benefit of that act, the complainant must prevail, for the language of that act is different from that of the Chattel Mortgage act, in that it renders unrecorded instruments void only against subsequent judgment creditors without notice and against all subsequent Iona -fide purchasers and. mortgagees for valuable consideration. And the lien of the executors, in trust for the creditors, did not arise until after the death of the testator.

It is urged that the revision of 1898 is confined in its scope, by its title—“An act respecting conveyances”—to that class of written instruments known in legal language as .“conveyances,” and that assignments of leases of land are not included therein. Bút a perusal of the act will show that this construction, if adopted, is most destructive in its consequences.

Granting, .for argument’s sake, however, that it must be confined to conveyances of land, I think that an instrument which “transfers” an interest in land “conveys” such interest, .and.that it matters not how. small in quantity and how short in time of duration that interest may be. A man who is in possession of land as tenant from .year to year has an interest therein which he may “convey.”

.The defendants, however, seek to overcome the force of the classification adopted by-the revision of 1898 by the force.of the decision of the court of errors and appeals in the case of Hutchinson v. Bramhall, 15 Stew. Eq. 372. That was a contest, as here, over the proceeds of the sale of a leasehold interest, much like that created by the lease in this case. It arose between n mortgagee and judgment creditor. The mortgage.was first in time and of record, provided a record in the book of chattel mortgages was sufficient. It was not recorded in the book of mortgages of land. In the court below Vice-Chancellor Van Fleet held (18 Stew. Eq. 88), on the authority of Decker v. Clarke, 11 C. E. Gr. 163, and Spielmann v. Kliest, 9 Stew, Eq. 199, and cases there cited, that the instrument should have been recorded as a mortgage of land, and not of chattels, and that the record in the book of chattel mortgages was insufficient to maintain its priority according to its actual date.

The court of errors and appeals held that its record as a mortgage of lands was not necessary, and that its record in the book of chattel mortgages was sufficient to give it its natural priority.

But the court did not decide, because it was not called upon • to decide, that if the mortgage had been, after due acknowledgment, recorded in the book of mortgages .of land, such record. would not have been sufficient to maintain its priority.

It is manifest from the report that the mortgage there in ■question was in form an ordinary chattel mortgage, containing •only the verbiage found in those instruments, and that it contained the affidavit required to be. annexed to that class of instruments.

No doubt' the parties acted in good faith in adopting that •character of security and in its record, and may have adopted it out of abundant caution. Notice given to the actual searcher was quite as efficient from the record in the one book of records ns from the other. So that Vice-Chancellor Van Fleet’s decision (that these honest efforts of the parties to do their full, •duty to the creditors of the mortgagor were of no value) worked n great hardship, which naturally induced the court of review to criticise it severely and to seek some ground upon which to .avoid its effects.

But a careful review of the authorities cited in both courts, nnd the reasoning advanced on each side, induces me to venture the remark that the decision should be confined to the precise point decided, namely, that the record of the mortgage in the book of chattel mortgages was sufficient, and its record in the book of mortgages of land not necessary in order to maintain its natural priority.

But, giving the decision its fullest effect, I must decline to hold that it decides that, notwithstanding the subsequent legislation above referred to, mortgages of leasehold interest must be recorded as chattels mortgages in order- to maintain priority. The -legislature had the undoubted right to-make such a-classification, and to point out how and where such instruments should be recorded, and the effect of such record.

I have said that the court of errors and appeals did not, in Hutchinson v. Bramhall, decide that a record of the mortgage in the book of mortgages of land would not have been sufficient, and I feel at liberty to suggest that it is difficult to see how they could have done so in the face of the twenty-second section of the “Act concerning conveyances” (Rev. of 1877 p. 157), above cited. And I think the complainant might rest its case simply upon the strength of that section, which was in force at the time its mortgage was given, but was superseded by the revision of 1898. And further, I think that the provisions of the revision of 1898 are, of themselves, quite sufficient to maintain the complainant's position.

I shall therefore advise a decree that the complainant is entitled to the proceeds of the sale of the leasehold interest.

In directing that sale a question arose as to whether certain fixtures in the building would pass therewith as part of the leasehold interest, or whether .they; should go to the executors. Those fixtures were sold separately by the master, and the fund may be separately dealt with, and its proper disposition will be considered by me hereafter. •