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    (No. 73.)
    J. W. Rufus Besson et al., executors and trustees of Richard Stevens, deceased, complainants-respondents, v. Theodosius Stevens, administrator of the estate of Elizabeth C. Stevens, Jr., et al., defendants-appellants. J. W. Rufus Besson et al., executors and trustees of Richard Stevens, deceased, complainants-respondents, v. Dorothy P. Stevens et al., defendants-appellants.
    (No. 74.)
    [Argued November 24th, 1922.
    Decided March 5th, 1923.]
    On appeal from decrees advised by Vice-Chancellor Buchanan, who filed the following opinion:
    “Complainants, as executors of the last will and testament of Richard Stevens, deceased, filed two bills, one to determine the ownership of six hundred shares of stock of the Hoboken Land and Improvement Company and four hundred and ten shares of common and one thousand one hundred and sixty-one of preferred stock of Hoboken Paper Mill Company, standing of record in the name of Elizabeth C. Stevens, Jr., and the other a like bill but relating to seven hundred shares of stock of the Hoboken Land and Improvement Company, standing of record in the name of Dorothy P. Stevens. Elizabeth .C. Stevens, Jr., died intestate shortly after the bill' was filed and the suit was revived as against her administrator. Both suits were tried together. There is no dispute over the principles of law involved, nor over the facts susceptible of direct proof; the controversy is as to inferences of fact and as to the application of the legal principles to the facts.
    “It appears from the evidence and the admissions in the pleadings that the testator, Richard Stevens, was a man of high standing and of large means. His wealth (including the securities in question in this litigation) amounted to about $1,500,000, of which about $1,000,000 was in securities. He died May 18th, 1919, at the age of fifty-one years, after an illness of four days with pneumonia. He left him surviving a widow and four children—Elizabeth, aged twenty-four (at his death); Caroline, twenty-one; Dorothy, sixteen, and Richard, fourteen—of whom Elizabeth and Dorothy are the respective principal defendants in the two suits.
    “He was a lawyer, a member of the bar of this state and engaged to some extent at least in active practice. He was also active in business and financial pursuits, being the president of the Hoboken Paper Mill Company, and also of the Hoboken Land and Improvement Company, both ‘close corporations'’ of the Stevens family, in which he had large stock-holdings.
    “It further appears that the six hundred shares of land company stock and the four hundred and ten shares of paper company stock above mentioned were, prior to the transfers to Elizabeth C. Stevens, the property of the testator; that some time prior to October 1st, 1918, this stock was transferred by the testator to his sister Caroline B. Wittpenn, in trust for certain purposes, one of which was to transfer the stock upon the demand of testator to any person named by him; that Mrs. Wittpenn had no interest whatever in the stock ; that on October 1st, 1918, the testator caused the six hundred shares of the land company stock above mentioned to be transferred on the books of the company from the name of Caroline B. Wittpenn to the name of Elizabeth C. Stevens, Jr. Either at this time or later a certificate was issued by the company for said six hundred shares of stock in the name of Elizabeth C. Stevens, Jr. This certificate was placed by the secretary of the company, at the direction of the testator, in the private compartment of the testator in the safe of the company, where it was found at his death.
    “On the 2d day of October a similar transfer was made from Mrs. Wittpenn to Elizabeth Q. Stevens, Jr., of four hundred and ten shares of the common stock of the paper company, and certificate No. 36 for said shares was issued in the name of Elizabeth C. Stevens, Jr., and was placed by the secretary of the land company at the direction of the testator in the above-mentioned private compartment in the safe of the land company, and was found there at his death. Both of these transfers were made without consideration and in neither case was the certificate of stock physically delivered to Elizabeth C. Stevens, either at the time of the transfer or at any other time.
    “On November 1st, 1918, the paper company, of which the testator was then president, passed a resolution authorizing its president and secretary to issue to Elsie C. Stevens (the name by which-said Elizabeth C. Stevens, Jr., was commonly known) a certificate for one thousand one hundred and sixty-one shares of the new preferred stock of the company in exchange for $90,000 par value of bonds of the company and a nine-tenths interest in a bond and mortgage of the company, amounting to $29,728.23, which bonds and mortgage, the resolution states, were then owned by said Elsie C. Stevens, but which were in fact owned by Richard Stevens. The preferred stock was duly issued to Elizabeth C. Stevens, Jr., but the certificate was delivered by the paper company to Richard Stevens, who in turn delivered it to Mr. Brown, secretary of the land company, .directing him to put it in the land company’s safe in the office of that company. Mr. Brown placed the certificate in that safe in the file marked ‘Elsie Stevens, Jr.’
    “About January 29th, 1919, Elizabeth 0. Stevens, Jr., acting at the request of the testator, executed and delivered an assignment of said six hundred shares of stock of the land company unto said Richard Stevens, and also an irrevocable power of attorney authorizing the transfer of said stock on the books of the company to said Richard Stevens or his nominee. This assignment was fastened by Eiehard Stevens to the certificate of stock issued in the name of Elizabeth C. Stevens, Jr., above referred to, and was found with such certificate after his- death. At the same time, and at her father’s request, a similar assignment and power of attorney was executed by Elizabeth 0. Stevens, Jr., on the reverse side of the certificate for four hundred and ten shares of the common stock of the paper company; also an assignment and irrevocable power of attornéy of the one thousand one hundred and sixty-one shares of preferred stock of the paper company, which was delivered to him and attached by him to the certificate of preferred stock, and so found at his death.
    “The financial dealings of the members of the Stevens family were carried on largely, if not entirely, through the land company, which collected the dividends and interest for the several members of the family, depositing them to its own account, crediting them respectively on their several accounts in its books, and from time to time paying out moneys on their respective orders or instructions and debiting their accounts with the moneys so paid out. So, also, their securities, or some of them, were kept in the land company’s safe, in separate files or envelopes. Elizabeth came into possession of some securities from her grandmother’s estate when she became twenty-one, and a file in the safe was set apart for her securities and an account opened in her name, Elsie Stevens, Jr., on the books of the land company. To her credit in that account were entered the income from the securities just mentioned (collected by the land company),, and checks for one-twelfth the annual income were made and sent her by the company monthly and charged against that account. This account and the moneys derived therefrom was used by her solely as a ‘dress’ or clothing account. Her other expenses were paid by her father as well after her majority as before. (A similar file and account were instituted for Caroline when she became of age.)
    “The dividends accruing in October and November, 1918, on the three blocks of stock issued in the name of Elizabeth, were collected by the land company (if it can be said to collect dividends which it pays) and credited to this account of ‘Elsie Stevens, Jr.’ This was not by any instructions from Elizabeth, but foEowing the usual custom or routine of the office and the family. On December 6th, 1918, however, the testator gave the company written instructions to open a new account in the name of ‘Elsie Stevens, Jr., Special’; to transfer to it from the ‘Elsie Stevens, Jr.,’ account the dividends of the preceding three months on the stock in question, and to credit it thereafter with all future dividends on the stock in question. These instructions were carried out, and all subsequent dividends were credited to the new or ‘Special’ account, and nothing else was credited therein. No moneys were withdrawn from this account by the order of anyone other than the testator, up until his death. During that period the ‘deposits’ or credits totaled $16,347.55; and there was charged against it only $3,245.95—$2,638.20 in February, 1919, and $607.75 in March. The February charge of $2,638.20 and $578 of the March charge were for wines and liquors (mostly whiskey), bought by testator in the name of Elsie; the remaining $29.75 of the March charge was the quarterly installment of Elsie’s 1918 income tax, due March 15th. The income tax report for 1918 was not made up by her but by the land company’s office force; it included in the return the October, November and December dividends above mentioned. (It may be noted here that there is no evidence that the October, 1918, monthly dividend on the land company stock was in anywise paid to Elsie; neither, however, does it appear that any such dividend was paid by the land company except by mere presumption from the fact that such dividends were paid each subsequent month.)
    “The testator’s will was executed March 7th, 1917. By it (aside from sundry bequests to persons outside his family) he gave $28,000 to his youngest two children to equalize them with what the other two had received from their grandmother, gave to each of the four children $50,000 at age of twenty-four, and left the residue of his estate in trust for the four in equal shares, all except Elsie to get the principal of their shares at age forty, Elsie’s share being kept in trust during her life and at her death going to testator’s then living issue. At the time this will was made Elsie was desperately 'ill with nervous collapse and her recovery was doubtful. Apparently, it must have been feared by her father that if she lived she might be nervously or mentally affected for the rest of her life. After her recovery he told his wife he was going to change his will as to the provisions affecting Elsie, and repeated the statement about six months before he died. At his death his will was found open in current documents on his desk.
    “The land company’s safe was in that company’s office. It contained, besides property of the land company itself, files (boxes or envelopes) of the individual property of members of the Stevens family and others interested in the company. Among these was the file or box of Richard Stevens himself; the one of Elsie Stevens, Jr., and the one of Caroline Stevens. As to the safe, and, therefore, to all the contents thereof, Richard Stevens, as president of the company, had complete access thereto and absolute control there-over. Neither Elsie or Dorothy knew the combination, nor could have had access thereto against the father’s consent. In fact, however, they, or at least Elsie, had free access to the safe, and hence to everything therein, pursuant to her father’s consent and directions (express or implied).
    “At the father’s death there was found in his file in the safe, in addition to the ‘Elsie Stevens, Jr.,’ certificates of land company and paper company stock and assignments, as above mentioned, and the certificate of land company stock in Dorothy’s name (hereafter to be mentioned), four Liberty bonds marked ‘property of Dorothy Stevens,’ and one Liberty bond marked ‘property or Richard Stevens, Jr.,’ and also a considerable quantity of title papers and agreements and securities (principally corporate stocks)-—the individual property of Richard Stevens. These latter aggregated in par value approximately $250,000 (the par value of the ‘Elsie, Jr.,’ and ‘Dorothy’ stock would be an additional $163,-200), and included six shares'of paper company common stock and one thousand two hundred and sixteen shares of land company stock. Testator also had a safe deposit box at the Hudson Trust Company, wherein was found securities owned by him (principally bonds; no land company or paper company stock) aggregating in par value about $165,-000. The total outstanding stock of the land company was fourteen thousand seven hundred and thirty-nine shares, of which testator had one thousand two hundred and sixteen shares after the transfer of the one thousand three hundred shares to Dorothy and Elsie; the total outstanding common stock of the paper company was eight hundred and seventy-one shares, of which testator held six after the transfer of four hundred and ten to Elsie. The value of these stocks was far above par, for they paid dividends of twenty-live' to thirty per cent, a year.
    “The foregoing, I think, summarizes the evidence in regard to the stock standing in Elsie’s name, except the testimony as to the testator’s conversation with Elsie, and his other statements of intention.
    “With regard to the seven hundred shares of .land company stock standing in Dorothy’s name—that transfer was made by testator in April, 1919, from stock standing in his own name, and the certificate was issued in Dorothy’s name, dated April 30th, 1919, delivered to the testator and at his direction placed in his box or file in the safe, where it remained at his death, together with an assignment thereof and irrevocable power of attorney, to Richard Stevens, signed by -Dorothy, but undated. At the father’s instructions an account was opened by the land company on its books in the name of ‘Dorothy P. Stevens, Richard Stevens, Guardian,’ and the May 1st dividend credited thereon. There were no other credits and no debit entries—his death occurring May 18th. Dorothy had no file or box in the safe.
    “Let us now consider the testator’s statements, and first in relation- to the stock transferred to Dorothy.
    “He told Mr. Edwin Brown (who was the secretary of the land company, and evidently also in fact a confidential secretary of Mr. Stevens) to have the transfer of the seven hundred shares made; that he was anxious to have the new certificate issued prior to May 1st, 1919, ‘so that the holder, Dorothy, would receive the dividend on that date.’ Dorothy says that her father said to her, at home, a few months before his death, probably January or Februarjr, 1919, ‘he was going to turn over some stock in my name, and that I wouldn’t have anything to do with it, except it would just be in my name, and that he wanted me to sign a paper, which I did, in case I should die, this stock would come back to him; and in case he died it would be divided equally between my sisters and brothers and myself;’ that he also said he had ‘given’ Elsie some stock, or was going to. (The word ‘given’ was not used by the witness but was in counsel’s question.) Mr. Brown also testifies that the assignment back from Dorothy to her father and power to transfer was prepared coincident with the issuance of the stock in her name and taken away by Mr. Stevens for execution by Dorothy and returned by him executed. Elsie Stevens, Jr., testifies that at the time her father transferred stock to her, ‘he said he was doing the same thing to her (Dorothy). He was transferring stock to her under the same conditions that he was to me. I don’t exactly remember, but I think he said he was about to transfer stock to her.’ (She had already testified to statements by her father as to what should become of the stock transferred to her, on her death and on his death, similarly to the testimony of Dorothy.)
    “So far as the transfer to Dorothy is concerned, it seems quite clear from the evidence that no gift was made to her of the stock in question. The requisites to establish a gift inter vivos (and, of course, there was here no claim or pretence of a gift causa mortis) are (1) a donative intent on the part of the donor; (2) an actual delivery of the subject-matter of the gift, at least to the extent practicable or possible considering the nature of the thing given; and (3) a stripping of the donor of all ownership and dominion over the subject-matter of the gift, at least to the extent practicable or possible considering the nature of the thing given. Swayze v. Huntington, 32 N. J. Eq. 127 (at p. 133); affirmed, 83 N. J. Eq. 335.

      “In the present ease, as to ‘Dorothy’s stock,’ we need go no further than the first of these elements. There was no donative intent, either specific or general. The inherent probability is against it, in the first place, against his giving away to a girl of fifteen or sixteen (even though one of his daughters) such a block of stock in this particular company, depriving himself (in connection with the assumed gift of six hundred shares to Elsie) of over half his holdings in the company. In the second place, neither his statements nor his acts indicate any such intent. He did not say to Dorothy or to Elsie that he was ‘giving,’ or going to give, the stock to Dorothy. He said he was going to transfer it to Dorothy, to ‘turn it over to her -name,’ and (still more cogent) that she wouldn’t have anything to do with it except it would just be in her name. And his further explanation that at her death it was to come back to him, and at his death it was to be divided equally among the four children, shows conclusively that the stock was not intended by him to be hers to do with as she pleased, but, at most, to be hers only as an agent or trustee for him. The only colorable evidence to the contrary, i. e., the statement to Brown that he wanted the May 1st dividend to go to the holder, Dorothy, does not in fact militate against what I have said, because the dividends were not to go, and did not go, to Dorothy, herself, but to him, though nominally as her guardian. His actions likewise correspond '(without reciting them again in detail) particularly the simultaneous taking back of an assignment from her to himself. True, if the stock were hers the assignment from a minor would be legally valueless, but it was undated, and was at least a precautionary measure good on its face after she came of age. Moreover, under all the evidence, I have no doubt whatever that at his direction the company would have acted on that assignment even before she came of age.
    “Returning to the stock transferred to Elsie, there is considerably more testimony as to testator’s statements than in Dorothy’s case.
    “Elsie, herself, says that her father talked to her in the fall of 1918, in September, she thinks; ‘he said he was going to transfer some stock to my name’; he mentioned the paper mill stock, but didn’t mention the other stock; it wasn’t ready at that time; he didn’t do it just then. ‘Two or three weeks later I went down to his office and signed some papers. I remember some paper mill stock, but I don’t remember the others.’ She thinks this was in December. In between there was at least one other conversation on the subject. ‘He just explained to me that he was going to sign this stock over to me, that’s all.’ ‘He asked me to make a will; I said I didn’t want to at the time; he said (at just which conversation this was is not apparent) in case of his death he wanted the money to go back to the estate, or go back so we would each get an equal one-quarter, because the stock he signed over to me was more than an equal quarter.’ ‘In case of his death it -was to be divided equally between us four children.’
    “She says she signed the assignment back to her father of the paper company preferred stock (dated January 29th) about the end of January or middle of February. She signed that because ‘my father asked me to make a will and I said I wouldn’t; he said he would fix something for me to sign in place of a will, more or less, so that the stocks would go back to him in case I died.’ This was as to all three stocks. She didn’t exactly understand what the assignment was; thought it was something like a will. She thinks she signed like assignments for other stocks, because ‘I signed them all together; I really wasn’t paying very much attention.’ Later, she says, she is not sure she signed all the assignments at one time.' She didn’t have any very clear idea what it was all about—just a general idea he wras signing stock over to her; she did what he asked because he asked it; she doesn’t recall signing the proxy to vote.
    “She cannot remember whether her father told her why he was transferring the stock to her name; he said he was going to transfer stock to Dorothy under the' same conditions that he was to her (Elsie). Nothing was ever said about transferring any stock or securities to the other two children or the mother. 'She never had anything to do with the stocks after the transfers. She thought her father was managing it for her, though she really never stopped to think. She had no knowledge of the affairs of the companies.
    “Her father 'told her he was opening an ‘Elsie Stevens, Special’ account, in which the dividends would be placed to keep them separate from her other moneys. She, herself, never drew moneys out of the ‘Special account,’ and she cannot remember that her father spoke to her or asked her consent about drawing moneys therefrom. She says he drew moneys from that account to pay her expenses, but in this, of course, she is mistaken; the account itself shows that nothing was drawn therefrom by him or anyone else in his lifetime, except the payment for the liquors and the installment of income tax.
    “The mother- testifies that her husband told her, after Elsie’s recovery from the illness, that he had by his will trusteed Elsie’s share of his estate; but that he was going to change that; and, again, six months' later (about six months before his death), he again said he was going to change his will in that respect—Elsie was perfectly well and it was no longer fair to her. (He never did change it.) At about the same time, but whether before or after she cannot recall, he said: ‘1 have transferred a lump of stock to Elsie; I have such faith in her, I have transferred a lump of stock to her.’
    “To William H. Gould (a close business friend and the then general manager of the paper company), the testator said, at the time of the transfer to Elsie of the paper company preferred stock (November 1st, 1918), that he was going to have his will fixed during the ensuing week; ‘I want to fix things so you and Walter (Gould’s son) will have the voting power of my girl’s stock so long as either of you live.’ ‘I want to have this fixed (referring to the will); my girls understand it, but you never know what happens after a man’s dead.’
    “In all this search will be made in vain for testimony that testator spoke of the transfer as a gift. He spoke of it to Elsie as ‘transferring it to her name’—‘signing it over to her.’ To the mother he said, ‘I have transferred a lump of stock to her because I have such faith in her.’ There is nothing but the answer of Dorothy hereinbefore mentioned and commented upon. That is absolutely without weight because of the leading form of the question. His statements to his wife about changing the will have no bearing on the stock transfer. He was simply going to eliminate the trust for life of Elsie’s share. But what he said about transferring the stock to Elsie because he had faith in her is quite; significant. So, also, was his statement to Oould, by ‘my girls’ stock’ he clearly meant the stock which would come to them directly or as cesluis que Iruslent under his will'—their shares of his estate after his death. Under no other theory is it possible , to understand his statement that he would accomplish his expressed intention by a provision in his will.
    “I think it is clear from all this testimony—quite as clear as in Dorothy’s case—that he had no intent to make an absolute gift of the stock to Elsie. Why should he ? Why should he give away about a third of his total wealth ? Why should he give it to two only of his four children, when everything else shows that he intended to treat them all alike? What reason was there to induce him to deprive himself of ownership of over half his land company stock and practically all of his paper company stock—to deprive himself of control over the two companies which were, so to speak, his own companies—he being vigorous and active and still in the prime of life? There is no reason suggested, and I can conceive of none. Pie intended simply to put it in Elsie’s name, but himself to have the beneficial interest; he still regarded it as under his control, and so spoke and acted afterwards. I think if any disinterested person—nay, even any one of counsel for the two girls—considering all the testimony, will suppose that Elsie at the time of the transfer had said to her father: ‘Do' you mean that this stock is to be absolutely mine; that I am to have the right to dispose of it absolutely as I wish? Of course, under all ordinary circumstances, I would follow your requests or desires, but if any extraordinary occasion should arise, have I right to deal with it irrespective of or contrary to what you wish?’ there can be no doubt that the father would have answered, ‘No.’

      “And his and her actions, or practically all of them, corroborate this conclusion. The non-delivery of the certificates to Elsie; the retention thereof in his safe, and of all but the preferred stock, which had no voting power, in his own file or box; the taking back of assignments and proxies; the exercise of authority over dividends; the opening of the special account for the dividends separate from the moneys which were really hers absolutely; the lack of knowledge, or even interest, by Elsie as to the whole matter; her lack of exercise or of attempt to exercise any control or authority or act of ownership as to stock or dividends;' the use_by him of the dividends to buy his liquors (without.her authority) and for no other purpose except to pay income tax on such dividends (Elsie’s other income was insufficient to be subject to tax), although he during the whole six months paid all her expenses except for clothing, just as he had before, and other acts which I need not reiterate. Some of these acts by themselves would of course not be conclusive—some would by themselves be not inconsistent with, or unexplainable from the standpoint of, the view that he had made a gift; but taken collectively they are incompatible with any such theory.
    “There are three points which are urged by counsel for the ‘donees’ as proving a donative intent, to which allusion should be made. One is the fact that he wanted Elsie to make a will so that the stock would go back to his estate; and that for a will to be operative presupposes ownership by the prospective testatrix. To this it may be said that it by no means appears that the request as to the will was made after the transfers; moreover, the insistment upon a will or in lieu thereof upon a reassignment, proves that his intent was that the stock should remain subject to the final disposition that he desired; and, finally, a will would operate upon the bare legal title of a trustee to carry it back to the cestui just as efficaciously as upon a complete beneficial title.
    “The second argument is that the issuance of the stock certificates by the company in the name of Elsie, at testator’s instance and procurement, in itself constituted a delivery, though the certificate was retained by testator, and that ipso

      facto the-donative intent is proven, citing and quoting from In re Roberts, 85 Pa. 84. I have not read that opinion, but I gather from defendants’ excerpts therefrom that-there was no other evidence in that case as to the donor’s intent to make a gift. If in this I am mistaken, then I m-ust beg leave to differ from the conclusions therein. In the present case, as I have shown, the evidence completely controverts the idea that testator intended that the transferee should have the absolute ownership or beneficial interest in the stock. Hence, assuming there was a valid delivery, that, at most, could establish only an intent to transfer the legal title, not a donative intent.
    “The third contention is that since testator had Elsie include the dividends from this stock in her income tax return and excluded them from his own return, he therefore must have had the donative intent as to the transfers, or, at least, then believed that he had had it at the time of the transfers; otherwise he must be convicted of deliberate tax evasion. It may be noted that there is in fact no evidence that he excluded these dividends from his own return, or in and by his return reduced his assessment from what it would, have been if the stocks stood in his own name; however, I think it may fairly and reasonably be argued that he did. My own belief is that the transfers were made by him for the purpose of lightening the burden of the income tax, since I can conceive of no other reason or motive under the evidence; 'and that one is plausible, for the high surtaxes cut so deeply into incomes such as testator’s and, for reasons which are doubtless well known and need not here be detailed, it was exceedingly difficult, except by sacrifice of capital assets, to reduce expenditures to the point correspondingly necessitated. That such a purpose, however, involved a criminal intent or moral turpitude upon the part of testator is in nowise a necessary sequence, nor do I believe it to be the fact. As I pointed out (In re Bottomley, 92 N. J. Eq. 202), there is nothing wrong in a desire or an attempt to do things, or to do them by methods, which do not come within the operation of the provisions of a taxing statute. The testator’s mind had been trained along legal lines; was accustomed in some degree to legal concepts and habits of thought—to legal refinements, distinctions and technicalities. I can conceive an honest-belief on his part that he had made a legal gift, notwithstanding his intent and purpose was to avoid the taxing provisions and not to strip himself absolutely of all interest in the stock in favor of the daughters; and that he failed to realize that because of the latter the former failed of accomplishment. There is, too, a Scylla to companion defendants’ Charybdis— for, if it be assumed that he had made an absolute and complete gift of the stock and dividends, then it was unlawful for him to take from his daughter’s funds some $3,000 for his own individual purposes.
    “In addition to the lack of donative intent, I am satisfied, too, that there was no valid delivery-—-though this, in view of the finding as to intent, is probably material only in connection with the form of the decree or the precise nature of the relief to be given. The transactions took place subsequent to the Uniform Stock Transfer act (P. L. 1916, p. 398), and are therefore subject to its provisions. Section 1 of that act provides that title to a stock certificate, ‘and to the shares represented thereby,’ can only be transferred by delivery of ■the certificate endorsed or accompanied by a written assignment or power to assign, &c. The statute does not expressly so state, but the necessary implication, of course, is that the delivery shall be made to the transferee or the transferee’s agent in that behalf.
    “The land company stock and the paper company common stock were all represented by certificates. Those certificates (though we may assume they were properly endorsed or assigned in writing) were not delivered to the transferees. The only delivery was to the companies themselves, and the companies were not the agents of the transferees to receive delivery for them.
    “The paper company preferred stock was not represented by any certificate prior to the one issued in Elsie’s name. Testator caused bonds of the company, held by or for him, to be surrendered to the company in exchange for the issue of the preferred stock in Elsie’s name, so that the transaction does not come within the provisions of the act. It might also be argued that the other transactions do not come within the spirit or intended purview of the act—that when a transfer has progressed to the point of the issue of the new certificates by the company, it has progressed past the point at which the act was directed. It may be doubted that this argument can contravene the express language of the statute, but yielding that point for the sake of the argument, it brings us to the question of whether the issuance of the new stock by the company in the name of the transferee, without delivery thereof to the transferee or her agent, can constitute a valid and sufficient delivery for a gift inter vivos. There are three points or steps in the transactions which might severally be conceived of as intended by the testator as acts of' delivery—•(!) the delivery by him to the company of the old stock certificates and assignments (the bonds in the paper company preferred stock instance); (2) the issuance by the company of the new stock certificates; (3) the delivery of the new certificates by testator to Elsie and Dorothy. As to the last of these three, I think it is clear that there never was any delivery of the new certificates by testator to.the ‘donees’—not even of the preferred stock of the paper company to Elsie. As I had occasion recently to hold, in Reiley v. Fulper, 93 N. J. Eq. 112, where the circumstances on this point were very similar, indeed, to those here sub judice—if the placing of the certificates in the safe was intended to constitute delivery, it was legally insufficient so to do. But, in my view of the testator’s mental processes, he did not intend that step as the act of delivery—certainly not in the case of the certificates of common stock, for it would be practically impossible for his mind to conceive of placing the certificates in his own file as constituting a delivery. Yet since he conceived (as in my view he did) that he had accomplished the transfer, he must have looked upon some other act as the delivery. It is improbable that it was the first of the three steps above mentioned— especially in the instance of the paper company preferred stock, for there was no transfer, or pretence thereof (at least, the recital in the minutes of the company was nothing more than a pretence or fiction), of the bonds to Elsie. They were surrendered by testator to the company. And, as to the other three transfers, his actions and statements to Mr. Brown on the transfer to Dorothy, indicate that he thought the transfer would be incomplete until the actual issuance of the new stock in her name.
    “I think, then, that he intended the issuance of the new certificates as the act of delivery. I think that such issuance, even in the name of the intended transferee, unless and until completed by delivery to such transferee or her agent, was insufficient to constitute a valid delivery. Stock holding has a dual aspect. On the one hand, it involves a contractual relationship between corporate entity and the stockholder, and on the other, it involves the ownership of property—of an interest in the corporate property. Considering the contractual aspect, the dissolution of the contractual relationship between the corporation and the old stockholder is conditioned upon, and is incomplete until, 'the perfection or completion of the contractual relationship between the corporation and the new stockholder (the transferee), and that is not complete (at any rate, in a case where the transferee has not received from the transferor the assignment of the shares and himself presented it to the company) until the delivery of the new certificate and its acceptance by the transferee. No one can become a stockholder in a company without his knowledge and consent. Great Council, &c., v. Mohican Tribe, &c., 92 N. J. Eq. 593. Obviously, then, until that time, the transferee does not become the owner of the interest in the company’s propert3r, which ownership is the other attiibute of his character of stockholder, and until that time the transfer of that interest in that property is incomplete. Considering the matter from the property aspect—the transfer of the stockholder’s owmership of property or interest in corporate assets —the transaction is one solely between transferor and transferee. The corporation has no interest in the thing from this standpoint—it is an outside party entirely. Either before or since the act of 1916, hereinbefore referred to, the change of ownership is complete upon the delivery by the transferor to the transferee of the certificates duly assigned. Matthews v. Hoagland, 48 N. J. Eq. 455, 486 et seq. Thereafter the corporation is a mere agent, so to speak, of the transferee, to •perfect his legal title, supply him with the evidence thereof and perfect his relationship to and with the other stockholders. Conversely, as it seems to me, where the transferor delivers nothing to the transferee, but delivers the certificate and assignment to the company, the latter is simply the agent of the transferor to accomplish the delivery to the transferee'. That is not done until the delivery of the new certificate to .the transferee (although it might conceivably be done by delivering the old certificate and assignment to him). Until that is done the change of ownership is not' complete; until it is done there is no relationship between the corporation and the transferee; and until it’ is done the transferor can, at least in the case of a gift, stop the agent’s action in the matter just as well as he could stop his own hand half-extended toward a manual delivery of a gift of a watch or a dollar bill. It is not done when the new certificate is delivered by the corporation, not to the transferee but back to the transferor. Until the delivery of the new certificate to the transferee, the transferor has not stripped himself completely of dominion and control—nor as nearly completely as possible under the circumstances and nature of the thing given. His retention of possession of and control over the new certificate deprives the transferee of complete dominion and control. The latter could not sell or transfer the stock to anyone else, even though he might vote and receive dividends thereon. Hence, even though so intended, it is not a legally valid and sufficient act of delivery. I think, perhaps, it is somewhat clearer if looked at from another angle. Suppose testator after receiving the new certificate from the company had changed his mind and decided that he wanted the stock for himself; that Elsie had demanded the certificate from him and he refused to give it to her. There is no doubt in my mind that Elsie’s claim of ownership, in whatever court or by whatever .form of action asserted, would not be sustained.

      “There was of course no delivery in the present case to the transferee’s-agent; assuming that testator might validly act in such capacity, he had not here been constituted such agent by the transferee.
    “The question of the legal sufficiency, as an act of delivery, of the issuance by the company of a new stock certificate without delivery thereof to the transferee, seems never to have been decided heretofore in this state; but I think the conclusion as to its insufficiency in that behalf necessarily flows from the application to the facts of the well-established principles of the law of gifts inter vivos. It is of course in conflict with the decision in In re Roberts, 85 Pa. 84. It is not, however, in conflict with such eases as East Rutherford Building and Loan Association v. McKenzie, 87 N. J. Eq. 375; New Jersey, &c., Trust Co. v. Archibald, 91 N. J. Eq. 82; Kauffman v. Edwards, 92 N. J. Eq. 554, where the thing given is not the whole of the asset owned by donor, but only a partial interest therein, and the delivery is of the kind of which the nature of the thing given is susceptible.
    “Defendants argue that it would.be absurd to require an actual delivery to Elsie and a redelivery by her, if she intended and desired her father to manage the stock for her as her agent. Doubtless, all positive rules do or may seem absurd in exceptional cases, but it must be remembered that such rules rest upon reasons of public policy, for the general good, to which the inconvenience of the few must yield. I think it cannot be questioned that the rule requiring a delivery exists, that a gift can never be made by words alone, and that it exists just as definitely and absolutely in a court of equity as in a court of law. There is no reason for equity to aid a donee—a volunteer—in the establishment of a gift (although if the gift be once established, a donee is as much entitled to the aid of equity in the protection of his ownership as an owner who has become such by any other means).
    “It results from what I have said, that testator was at his death the owner of the four blocks of stock in question, and of the indebtedness (representing the dividends on this stock prior to his death) standing on the books of the land company in the name of ‘Elsie Stevens, Jr., Special/ and ‘Dorothy Stevens, Richard Stevens, Guardian/ and to such ownership his executors succeeded. The latter are entitled (upon their surrender of the outstanding certificates now in their possession) to new certificates of stock in their own names from the two companies (who are parties to the suits); and to' the unpaid dividends on the stock since testator’s death (which have been held in abeyance during the litigation); and to the return of such moneys as have been paid since testator’s death to or for Elsie and Dorothy out of the aforesaid dividend accounts.
    ‘‘I think'the case is one where no costs should be awarded.”

      Mr. Robert H. McCarter {Mr. Maximilian T. Rosenberg and Mr. Theodosius Stevens, of the New York bar, on the brief), for the appellants.

      Mr. Josiah Stryker, for the respondents.
   Per Curiam.

The bills were filed to obtain an adjudication of the ownership of, and title to, certain shares of corporate stock owned by Richard Stevens, deceased, in his lifetime, and claimed by the executors of his will, but which were also claimed, partly by his daughter Elizabeth C. Stevens, Jr., who died pending the litigation, and partly by his daughter Dorothy P. Stevens. Each daughter claimed by virtue of an alleged gift inter vivos from her father, and the fundamental question argued before the vice-chancellor was whether there had been in fact and law such a gift. He held to the contrary in a careful and ■ lengthy opinion in which all the facts (for the most, part, if not altogether, conceded) were fully discussed, and the law applicable thereto stated. The result he reached in both cases was—first, that there was an absence of donative intent, and secondly, that even if- such intent had existed, the evidence failed to show a completed gift under the well-established rules of law governing such cases.

We think it sufficient to say that after full argument and due consideration of the matters involved, we concur with the views of the learned vice-chancellor on which he based the conclusion that there was no completed gift, and, of course, in that conclusion and for those reasons the decrees before us will be affirmed. In view of this result, the question of donative intent needs no discussion.

No. 73—

For affirmance—The Chief-Justice, Swayze, Teen-chard, Parker, Bergen, Kalisch, Black, Katzenbach, White, Gardner, Ackerson, Van Buskirk—12.

For reversal—None.

No. 74—

For affirmance—The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Kalisch, Black, Katzenbach, White, Gardner, Ackerson, Van Buskirk—12.

For reversal—None.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Florence E. Smith, respondent, v. Archibald G. Smith, appellant.
    [Decided March 6th, 1923.]
    On appeal from a decree of the court of chancery signed by the chancellor, adjudging the appellant in contempt.

      Mr. Thomas M. Simonton. for the appellant.
    2li?\ Martin P. Devlin, for the respondent.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated by the chancellor.

For affirmance — The Chiee-Justice, Swayze, Trenchard, Parker, Bergen, Kalisch, Black, Katzenbach, White, Heppenheimer, Gardner, Ackerson, Van Bus-kirk—13.

For reversal—None.


text:
    Marie E. Ziesel, respondent, v. William Ziesel, appellant.
    [Decided November 22d, 1923.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, whose opinion is reported in 93 N. J. Eq. 153.

      Mr. D. Trueman Stackhouse, for the appellant.

      Messrs. Leap, Sharpless & Way, for the respondent.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion of Vice-Chancellor Learning.

For affirmance — The ' Chiee-Justice, Swayze, Trenchard, Parker, Bergen, Kalisch, Black, Katzenbach, White, Williams, Ackerson, Van Buskirk—12.

For reversal—None.


author: Walicek, Ghan-celloe.

text:
    Clarence E. Smiley, complainant, v. May B. Hanna et al., defendants.
    [Decided May 1st, 1923.]
    1. Two assignments of a mortgage, both purporting to have been made by O. E. S. to J. K. W., to which D. (!. S., a master in chancery, signed the name of O. E. S., without his authority or knowledge, but on request of a third party who. claimed to be the beneficial owner of the mortgage, and signed Ms name as subscribing witness thereto, and filled out and signed the usual form of acknowledgment thereunder, in which he certified that personally appeared before him C. E. S., who he was satisfied was the grantor in the instrument named, and having first made known to him the contents thereof, he acknowledged that he signed, sealed and delivered the same as his voluntary act and deed, all of which was certified and signed XJ. G. S., M. O. C. of N. J., is malpractice, for which the commission of the master will be revoked and canceled.
    2. Semble: 'the above recited acts constitute contempt of court.
    On petition to- open decrees and to set aside a sheriff’s deed.

      Mr. William, M. Clevenger, for the petitioner.

      Mr. Ulysses G. Styron and Mr. John W. Wescolt, for the complainant.
   Walicek, Ghan-celloe.

This was a suit for foreclosure of a mortgage for $4,000, in which final decree was made and entered October 25th, 1920, and sale of the mortgaged premises was made December 15th, 19.20. On November 27th, 1922, a petition was filed by Narcia B. Wills, administratrix of John R. Wilson, deceased, alleging that on January 6th, 1919, the complainant, in consideration of $350, assigned to the petitioner’s intestate the bond and mortgage then in suit, which was made by Annie E. Walters to him, Clarence E. Smiley, by assignment in writing acknowledged but not recorded, and that on May 28th, 1919, he again assigned the same mortgage to petitioner’s intestate in consideration of $1,085, which was likewise acknowledged, and was recorded in the Atlantic county clerk’s office in Book 51 of Assignments of Mortgages, page 29: that petitioner’s intestate departed this life July 30th, 1922, and on August 4th, 1922, she was appointed administratrix of his estate, and immediately qualified and took upon herself the burden of administering his affairs, and found the assignments just mentioned among decedent’s effects; that so far as petitioner had been able to ascertain, no part of the mortgage was ever paid or satisfied to John R. Wilson in his lifetime, and that it had not been paid to petitioner since his death; that petitioner’s intestate was not a party to the foreclosure suit conducted by the complainant and was without knowledge of its prosecution. The prayer is for opening of the decrees (final and interlocutory) and for setting aside the sheriff’s deed.

The petitioner failed in her proofs. In fact it was affirmatively shown that the moneys procured upon the assignments were paid to Dr. Edwin R. Smiley, who claimed to be the beneficial owner of the mortgage, and were afterwards repaid by him to Mr. Wilson through Mr. Styron as attorney. Therefore, the petition must be dismissed. But in the trial of the issue an amazing situation was developed, which I shall now proceed to narrate.

Mr. Styron, solicitor for the complainant, was called as a witness on behalf of the petitioner, and was examined concerning the assignments of the mortgage above mentioned. They were produced and offered in evidence and marked Pxtiibiis P-2 and P-S, respectively. P-2 purports to be an assignment of a mortgage made by Clarence E. Smiley for $350 to John R. Wilson. It is drawn on the usual printed blank form, and the manuscript portion, including the name of the assignor, Clarence E. Smiley, is all in the handwriting of Mr. Styron, who, at the foot thereof, signed his name as subscribing witness thereto, filled out the usual printed form of' certificate so that it read that before him personally appeared Clarence E. Smiley, who, he was satisfied, was the grantor in the instrument named, and having first made ■known to him the contents thereof, he acknowledged that he signed, sealed and delivered the same as his voluntary act and deed, all of which was thereby certified, and he signed the same, “IJ. G. Styron, M. C. C. of N. J.”

P-S purports to be an assignment of a mortgage made by Clarence E. Smiley to John R. Wilson. It is drawn on the usual printed blank form and the blanks are filled in in typewriting, and the name of the assignor, Clarence E. Smiley, is in the handwriting of Mr. Styron, who, at the foot thereof, signed as subscribing witness, and also signed the usual certificate of acknowledgment, which was in printing and typewriting, and certified the same as in'the certificate to P-2. Mr. Styron’s examination at tins point proceeded as follows:

Direct examination by Mr. Clevenger.

"Q. Mi’. Styron, I show you Exhibit No. 2 for identification, being an assignment of mortgage by Clarence E. Smiley to John R. Wilson, dated January 6th, 1919, and ask you if that is your signature as subscribing witness thereto?
“A. Yes.
“Q. I show you Exhibit PS for identification, being assignment of mortgage dated May 28th, Í919, and ask you if that is your signature as subscribing witness thereto?
“A. Yes.
“Q. Now, I show you both exhibits, and ask you if you took the acknowledgments to those papers?
“A. I did.
“Q. Did you see Clarence E. Smiley sign his name to each of the papers ?
“A. No, he didn’t sign his name to either of them.
“Q. Who did sign his name?
“A. I did.
“Q. Was Mr. Smiley present at the time of the execution of the papers?
“A. He was not.
“Q. Did you have a power of attorney to sign those papers for him?
“A. Not from him, no.
“Q. Did he authorize you to sign his name to the papers?
“A. Not personally.
“Q. Whose acknowledgment did you take to the papers?
“A. No acknowledgment at all; simply filled it in and signed it.
“Q. Did you deliver the original bond and mortgage, offered in evidence, and the two assignments, to John R. Wilson?
'“A. Yes.
“Q. Now, when you got the $350 on the first assignment, was that delivered to Clarence E. Smiley?
“A. No, Clarence E. Smiley knew nothing of that transaction, so far as I know; everything was done "through his father, Edwin R. Smiley.
“Q. When you got the balance of the $1,085 named in the ssecond assignment, was that money delivered to Clarence E. Smiley?
“A. It was not—not by me.
“Q. Did Mr. Wilson understand that he was getting two assignments not executed by Clarence E. Smiley.
“A. He did.
“Q. Who owned the bond and mortgage that was assigned?
“A. At that time I supposed that Edwin R. Smiley owned it; I have since learned that it was owned by Clarence E. Smiley.
“Q. Did Mr. Wilson understand that it was owned by Dr. E. R. Smiley?
“A. Yes.
“Q. Did you assure Mr. Wilson that it was owned by Dr. E. R.Smiley ?
“A. I told him so, yes; all the transactions that I had had-■
“Q. Why didn't you get Dr. Smiley’s signature to the assignments?
"A. Why didn’t I?
"Q. Yes.
“A. I didn’t think it was necessary; he told me to sign the name of Clarence E. Smiley.
"Q. Dr. Smiley did?
“A. Yes.
“Q. And you thought that was all right?
"A. It was all right.
‘“Q. Under what theory?
“A. Upon the theory that if he owned the mortgage and had it in the name of someone else, he could certainly direct how it should be ordered.
“Q. You think he could direct you to sign Clarence E. Smiley’s signature to that?
“A. Yes.
“Q. And you can certify that Clarence E. Smiley had acknowledged it as his act and deed?
“A. Well, that was a rather foolish thing to do; I did it just the same; it was a transaction between friends; there is no justifying that feature of it that I can see.”

Cross-examination by Mr. Wescott.

“Q. Mr. Styron, how long have ,you been a member of the New Jersey bar?
“A. Since 1885.
“Q. And Edwin R. Smiley, how long did you know him?
“A. I have known him for at least thirty years.
‘‘Q. How well?
‘A. Very well.
“Q. On intimate terms with Mm?
“A. Yes.
“Q, How long did you know Mr. Wilson?
“A. I had known Mr. Wilson, I presume, for at least fifteen years.
“Q. On what terms of intimacy with him were you?
“A. Quite intimate with him for the last seven or eight years.
-‘Q. Will you explain to his honor, the chancellor, how these transactions came about, and give us the history of it, so far as you can recollect, as ¡briefly as possible?”

Mr. Styron then went on to explain the transaction as follows: He said that in 1916 Dr. Edwin R-. Smiley’s sister, Mrs. Walters, owned a property in Ventnor City on which there was a mortgage, and the doctor told him, Styron, he was about to take it up and sent him a check to the order of the solicitor of the mortgagee, and took from his sister a mortgage of $4,000, which is the one which' was foreclosed in the name of Clarence E. Smiley, the son of Dr. Edwin R. Smiley (in whose name the mortgage was taken). Annie E. Walters, the doctor’s sister, died, and he commenced foreclosure on the mortgage through Mr. Styron. The doctor wanted to get some money on the mortgage, and Mr. Styron went to petitioner’s intestate, John R. Wilson, and told him the circumstances and got from him $350 for Dr. Smiley. Clarence E. Smiley, the doctor’s son, was then ill somewhere in a sanitorium. A little later Dr. Smiley wanted some more money and Mr. Styron got $1,085 for him from Mr. Wilson. When he got the first money he signed a note in the name of Clarence E. Smiley. He had never seen his signature and did not know what it looked like and made no attempt to imitate it. The mortgage was in his name, but Mr. Wilson understood that it belonged to Dr. Edwin R. Smiley, and so did the witness, Mr. -Styron.

It was proved by the testimony of Mr. Styron, and by vouchers, that Mr. Wilson was. repaid in full through Mr. Styron, but the assignments, which were made as collateral to secure the loans, were not re-delivered.

In re Breidt and Lubetkin, 84 N. J. Eq. 222, I had before me a case of malpractice by two solicitors of this court. Lubetkin filed a bill for a receiver with three affidavits annexed purporting to have been sworn to before Breidt. Sundry affidavits were presented on the application. The principal one, made by Greenbaum, was actually sworn to before Breidt. Another affidavit bearing the signature of Greenbaum, and seven or eight other supposed affidavits, were certified by Breidt as being sworn to before him. None of these affiants except Greenbaum appeared before Breidt and made oath as attested by the jurats. What occurred was this: Lubetkin, who was an office associate of, bixt not professionally connected with, Breidt, went to him with Greenbaum and asked that he, Breidt, take the latter’s affidavit, and also that he subscribe the jurats to the other affidavits, stating that he, Lubetkin, had seen the other persons sign and had sworn them, and that being the solicitor, he could not sign the jurats, and to oblige Lubetkin, he, Breidt, took the papers, administered the oath to Greenbaum, and then signed his name to all the jurats and handed the papers back to Lubetkin. Lubetkin admitted that he did not -see three of the affiants, but as to the others he stated that he took their affidavits and later discovered that as solicitor in the cause it would be irregular to subscribe the jurats, and he asked Breidt to do so, stating that he had actually seen four of the affiants sign and took their affidavits, and Greenbaum told Breidt that he, Greenbaum, had seen the other three affiants sign and had explained the contents of the bill and affidavits to them and had told them the nature of the papers they were signing, and that thereupon Breidt swore Greenbaum and affixed his signature to the three affidavits. The defence of these young men was confession and avoidance; the avoidance, however, not constituting a defence. They only alleged and urged ignorance of the law and practice relating to the administration of oaths and the certification thereof by way of jurat, and that they were young and immature practitioners. I, of course, brushed that aside, and took* occasion to remark (at p. 227) that it was not an answer to say that the statements contained in the supposititious affidavits were true; that the power of the court could not be invoked by the mere off-hand statements of individuals; that it'acts only upon oaths and affirmations, for the falsity of which in any material respect the deponent might be punished upon indictment and conviction for perjury. The respondents made much of the fact that they were young lawyers, Breidt having been admitted a little less than three years and Lubetkin a little more than one year; but I held that that was a disingenuous excuse; that the courts had dealt with it and scouted it repeatedly, citing authorities.'

Fow, Mr. Styron has not even the excuse of youth and inexperience. He had beén a member of this bar for thirty-four years and had been engaged extensively as a practitioner. The excuse he puts forth for signing and certifying the two supposititious acknowledgments, to which he wrote the name of the alleged assignor, without his authority or knowledge, is that he did not think it necessary to get the signature of Clarence E. Smiley (who at least held the naked legal title to the mortgage), because Clarence’s father, Dr. Smiley, told him to sign his son’s name, and that he, Styron, thought it was all right upon the theory that if he, Dr. Smiley, owned the mortgage, and had it in the name of his son, he, the doctor, could direct him, Styron, to sign Clarence E. Smiley’s name to those assignments. He further says that he thought that certifying to the acknowledgment as being Clarence E. Smiley’s act and deed was a rather foolish thing to do but (he did it just the same; that it was a transaction between friends; but, he also said, there was no justifying the acknowledgment feature that he could see. Comment from me on this state of facts is unnecessary. A bare statement of them is sufficient to brand Mr. Styron, I regret to say, with a gross piece of malpractice, unexeused and unexcusable. I could not write the opinion In re Breidt and Lubetkin and fail to write this one.

In re Simon Hahn, 85 N. J. Eq. 510, the court of errors and appeals decided that the court of chancery lacked the power to discipline a solicitor, dissociated from proceeding against him for contempt of court. This is not a proceeding against Mr. Styron for contempt. I incline to the opinion, however, that his conduct amounts' to contempt of court. Whether so or not, it’ is unnecessary for me to charge him with, and compel him to answer for, contempt, as his admissions before me on oath in the pending case, not only justify but imperatively call for the action I am about to take. Unlike the case of Breidt and Dubetkin the offence here before me was not perpetrated in the prosecution of a suit, although it was done during the pendency of one. It was an act of conveyancing at common law, the object being to secure a loan of money to the asserted owner on his mortgage which happened to be in the process of foreclosure. The supposititious assignments were not projected into the foreclosure suit in any way. Repayment was made before the final decree was entered.

Although the supreme court only has the power to discipline a solicitor (except in proceedings for contempt), the chancellor, who appoints at his pleasure the masters of the court of chancery, has the power to discipline them; and there are numerous instances of his having removed them at pleasure. During Chancellor McGill’s administration a master certified that a certain married woman had made a separate acknowledgment before him to a mortgage which she signed together with her husband. It came out in proof that while the wife had signed the mortgage she did not acknowledge it, and that the husband had taken it to the master stating that he and his wife had signed it and requested him to sign the acknowledgment, which he complacently did. The chancellor revoked and canceled his master’s commission. Chancellor Pitney revoked and canceled the commissions of several masters in chancery who had been disbarred as attorneys- and solicitors, and I have done the same thing. And I feel obliged to do it now. I cannot permit a master in chancery who signed the name of the owner of the legal title to a mortgage to an assignment of that mortgage without the knowledge and authority of the owner, even if his father, who was a friend of the master, assured him that he, the father, was the owner and his son had no interest in it, and who, the master, deliberately certified over his signature that the alleged assignor personally appeared before him, that he was satisfied that he was the grantor in the instrument named, and having made known to him the contents thereof, that he, the alleged assignor, acknowledged that he signed, sealed and delivered the same as his voluntary act and deed, when each certified fact was untrue—-longer to continue in commission as a master of this court. Quite aside from the seriousness of the master’s offence, I cannot refrain from observing that there was at least a possibility that if Mr., Styron had consulted the son as to the ownership of the mortgage that stood in his name, he might have asserted ownership himself, which would have made his, Styron’s conduct, much more legally impossible. In fact, Mr. Styron said in his examination before me that while at the time he supposed Edwin R. Smiley owned the mortgage he has since learned that it was owned by Clarence E. Smiley. This demonstrates the absolute recklessness of Mr. Styron’s act, aside from its illegality,

Before a master in chancery or other officer so empowered may take an acknowledgment to a deed of conveyance or other instrument, he must be satisfied that the party making the acknowledgment is the identical grantor named in the instrument; he cannot be so satisfied unless the grantor is known to him; he need not be well known, only casually known; but in one way or another he must be known—that is, the officer taking the acknowledgment must be satisfied in his conscience that the party making it is the identical person named in and who executed the instrument. See In re H. C., Jr., 81 N. J. Eq. 8.

All that I said (In re Breidt and Lubetkin, at p. 226) to to the effect that there is no way in law whereby 'an officer authorized to take an oath may certify that he has done such an act when in fact he has not; and that in the nature of things there can be no absent administration of an oath or the administration of an absent oath; that the thing is perfectly incongruous and impossible; that the administration of an oath means something or nothing; that it cannot be distorted; that there is no room for construction, and for a violation of the law in this regard there can be no excuse, applies 'with even greater force in this case.

Let an order be entered requiring Mr. Styron to forthwith surrender to this court his commission as master in chancery, to the end that it may be vacated and canceled.


author: Walker, Chancellor.

text:
    Joseph H. Shinn, complainant, v. Edwin R. Smiley et al., defendants.
    [Decided May 22d, 1923.]
    1. Under the English practice a rehearing might be had in a chancery suit by bill of review if the decree had been enrolled, and by bill in the nature of a bill of review if there had been no enrollment, and such relief may doubtless still be afforded in chancery of this state; but it has for. a long time ‘been 'the established practice of this court to permit of applications for rehearing by petition, even after enrollment; and this practice has the sanction of rule 154 of this court.
    2. By rule 128 of this court it is provided that application for rehearing in causes heard by vice-chancellors (or advisory masters) shall be made to them; and no application for a rehearing in any such case will be considered by the chancellor save in very exceptional circumstances.
    3. No rehearing will be granted in chancery upon the ground of newly-discovered .evidence, unless the applicant shows the new matter to be of such character that, if it had been produced on the trial, it would probably have changed the result and produced an opposite result.
    On bill, &e. On petition to open decree and for rehearing.

      Mr. Clifton 0. Shinn, for the petitioner.

      Mr. Ulysses G. Styron, contra.

   Walker, Chancellor.

This was a suit for the specific performance of a contract to convey lands. The vice-chancellor who heard the cause held that the contract as sought to be imposed upon the defendant Clarence E. Smiley, who appeared to be the owner of the record title, was not proved, and the bill was therefore dismissed. The decree of dismissal was filed August 8th, 1922. On December 26th, 1922, the complainant filed a petition in which he recited certain proceedings in this cause, alleging, inter alia> that the defendant Clarence E. Smiley testified therein that the mortgage on the premises (which he foreclosed, and through the sheriff’s deed acquired title) was a gift to him from his father, Edwin R. Smiley, then deceased; and also alleging that on an application to open the decree in the foreclosure suit (Clarence E. Smiley v. May B. Hanna, 1 N. J. Adv. R. 449) Mr. Styron, who has acted as the solicitor of both Smileys, made an affidavit in which he swore that Edwin R. Smiley provided the money for the mortgage (on the property) and exercised certain acts of ownership over it, naming them, and petitioner alleged that this testimony if believed would result in a decree in the complainant’s favor in this suit instead of the decree of dismissal entered herein; that such facts were unknown to the petitioner at the trial of this cause, although Mr. Styron was sworn as a witness in behalf of the defendants herein. The petition also alleged that the defendant Edwin R. Smiley died before the hearing of this cause (which is a fact), and that his executors, Clarence E. Smiley and Bertha L. Smiley, ivere substituted as defendants in his place; but that not offering themselves as witnesses the complainant could not interrogate then with respect to transactions with, or statements by, their testator.

The written contract of sale was signed “Edwin R. Smiley, by H. G. Styron, attorney in fact.” It was incorporated in a certain lease and was an option to purchase at the end of the term, the lessee being the complainant,' Shinn. The vice-chancellor’s decision proceeded upon the ground, that the agreement, which was not made by Clarence, did not bind him; that he had neither authorized it nor ratified or confirmed it.

The defendants challenge the right of the petitioner to proceed by petition for a rehearing, and submit that his only proper procedure would be by bill of review if the decree had been enrolled, or by a bill in the nature of a bill of review if theTe had been no enrollment. This was the English practice, and, doubtless, may still be resorted to in this state. See Watkinson v. Watkinson, 68 N. J. Eq. 632. It is, however, established practice of this court to permit of applications fox rehearing by petition. In Jones v. Read-Jones, 84 N. J. Eq. 479, the court of errors and appeals held (at p. 480) that a decree may be opened on petition after enrollment. In fact the practice must have existed for more than a century, for, by rule adopted September 8th, 1817, it was provided that every petition for a rehearing shall set out concisely the matter or cause on which it is applied fox. This rule has been in force ever since and is now rule 154. There is another pertinent rule, it is 128, and it provides that applications for rehearing in causes heard by vice-chancellors (and advisory masters) shall be made to them.

In Rusling v. Bray, 38 N. J. Eq. 398, Chancellor Runyon (1884) construed this rule (then 148), which' was in form somewhat different from the present one. He said the rule was made at the time when the first act providing for vice-chancellors was passed; that under it few applications had been made for rehearings by the chancellor himself, and none such were ordered except in special circumstances, as where a vice-chancellor had gone out of office or where he himself was of opinion that the hearing should be had before the chancellor. Now, in the case at bar, when counsel for the complainant asked me to consider the application for a rehearing, he stated that he had presented his application to the vice-chancellor who heard the cause, and that he stated that he woiild prefer that counsel present the petition to me. This in and of itself was not a valid reason, but there was one, and it lies in the fact that there was at the time pending before me an application to open the decree of foreclosure in Smiley v. Hanna (above referred to), and the proof relied upon as newly-discovered evidence in this cause resided in the affidavits in the proceeding to open the decree in the foreclosure case. Therefore, I took cognizance of this matter, but desire to observe that the rule that such applications as this must be made to the member of the court who heard the cause, is to be quite strictly adhered to, and that in only very exceptional cases will the chancellor entertain these applications.

Coming now to the merits: In Kirschbaum v. Kirschbaum, 92 N. J. Eq. 7, I held that an application for a rehearing in chancery is governed by principles applicable to motions for new trials in eases at law; that to justify a rehearing in an equity case for newly-discovered evidence, the new matter must be of such character that if it had been heard on the trial, it would probably have changed the result and produced an opposite result.

How, how could the asserted newly-discovered evidence have operated to change the result in this case? The complainant argues that in an answering affidavit, Clarence E. Smiley, one of the executors of his father, relates statements made by the testator respecting the gift of the mortgage and relates other statements of his concerning transactions relating to that mortgage and the property which complainant seeks to have conveyed to him, and the instructions given to IT. G-. Styron, who was his solicitor, and that having thus offered himself and testified as a witness, his lips are no longer sealed and petitioner is now entitled to interrogate him touching all of the transactions with, and statements by, his testator relating to the matters involved in this suit. Even so, I fail to see that this is a sufficient ground for a rehearing. The complainant on this score does not set forth evidence which would move the court to say that had it been offered originally, it would'probably have changed the result. It is merely speculative. It is an assertion that if the complainant be granted a rehearing, the witness might on cross-examination give testimony contradicting his own sworn statements and thus show a sufficiently different state of facts from that developed on the hearing to make a case for the complainant. I am not pointed to any authority which holds that a rehearing should be ordered for any such reason.

Another thing: The complainant argues that Mr. Styron, in his affidavit of January 15th, 1923, herein, undertakes to qualify his recital of facts made on the hearing by saying that until about the time of the sheriffs sale under foreclosure of the mortgage he (Styron) never doubted that Edwin K. Smiley was the owner of that mortgage, and complainant asserts that that conclusion is based upon a statement of facts, which the affiant (Styron) recites. ' Now, Mr. Styron’s opinion concerning the title—for that' is practically what is involved in the statements made in his affidavit amounts to—can have no controlling effect, assuming it to be admissible evidence, which, seemingly, it is hot. And, in passing, I would say that the facts stated, plus those adduced upon the hearing, would have no controlling effect as against Clarence E. Smiley. Besides, Mr. Styron was a witness for the defence on that hearing, and there is no suggestion that cross-examination might not have elicited the very information which complainant now seeks.

As to facts relied upon by complainant as newly-discovered evidence entitling him to a rehearing, it is sufficient to say that, taken singly and together, they do not meet the requirements of the law', in that it does not appear that such facts would probably have changed the result reached on the hearing before the vice-chancellor. And in this situation the application for a rehearing must be denied.