text:
    Decker J. Sterling v. Wilhelmina Sterling.
    [Submitted February 27th, 1906.
    Decided April 17th, 1906.]
    1. In a suit for divorce, the uncorroborated testimony of one of the parties is insufficient to establish any of the essential facts.
    2. Where the conduct of a wife on leaving her husband is not sufficient to make out desertion, but only separation, it is ordinarily the husband’s duty to seek a reconciliation and a renewal of the matrimonial status before such separation can constitute willful and obstinate desertion ; but a demand for the return of the wife is not essential, where the circumstances justify the inference that such a demand would be wholly ineffective.
    On Dill for divorce and'exceptions to master’s report.

      Mr. Francis D. Weaver, for the complainant.
   Magie, Chancellor.

The bill in this cause sought a divorce on the ground of desertion. No answer having been interposed, the matter was referred to a master, who has reported that the evidence produced before him established a willful and continued desertion, but failed to establish that the desertion was obstinate.

To obtain a decree of divorce on the ground of desertion, the proofs must establish that the desertion was willful, continuous and obstinate. The evidence of one of the parties to the cause will not establish any of the essential facts unless the same is corroborated.

What occurred at the time defendant left the house in which she resided with her husband, and to which she returned only once, and then for the purpose of obtaining some of her property, is proved only by the evidence of the husband. If his testimony tends to produce any conviction that her leaving his house was with the intent to desert, it is wholly lacking in corroboration.

Shortty after she returned to the house to secure some of her property. At the interview with her husband at that time he declares that she used language that would indicate that she had deserted him for another person. This evidence is also uncorroborated. The son of the parties, who was present at a part of that interview at least, does not testify to the use of any such language.

It results, in my judgment, that the master had not before him sufficient proofs to justify his conclusion that the desertion was willful.

The conclusion of the master that the desertion which he found to be willful was not obstinate was, I assume, based upon the fact that the complainant made no effort to induce the wife to return to the conjugal domicile.

If there was satisfactory evidence of a willfui desertion, the question whether the husband was under a duty to seek the return of the wife would be presented. Where the evidence is not sufficient to make out desertion, but only separation, it would seem that the husband’s duty would require him to seek a reconciliation and a renewal of the matrimonial status.

But the exceptions are supported- here by the argument that the testimony discloses that no duty devolved upon the husband to seek to induce her to return. It is the result of our cases that while a demand for the return of the wife is, in general, required to be made, it is not essential where the circumstances proved justify the inference that such a demand would be wholly ineffective.

Two circumstances are claimed to show that a demand in this case would have been ineffective:

(a) It is urged that what the defendant said to the complainant, when she returned to the house to obtain her property, indicated that she had deserted him for another person. Under such circumstances a demand would seem to be absurd and unlikely to be ineffective. But this evidence comes from the plaintiff alone, and lacks &nj corroboration.

(&) The possession by the complainant of a key which he found would open the door of a house in which he says a man lived whom he suspected of being intimate with his wife.

There is corroboration that the key which complainant had would open the front door of a certain house, but there is no corroboration of complainant’s testimony that the key came from the possession of the defendant, nor that the house was one in which the man in question lived, nor that there had ever been any undue familiarity between the defendant and that man.

The result is that the master’s report must be confirmed.


source: Caselaw Access Project

author: Mague, Chancellor.

license: Public Domain

text:
    Standard Roller Bearing Company v. Crucible Steel Company of America.
    [Decided April 20th, 1906.]
    1. When an action at law is pending in which the defendant has a complete defence, this court will not withdraw the question from the law court, unless the case involves some equitable element which the law court cannot apply, but which must be applied to do complete justice, or unless the relief of defendant cannot be afforded by the law court or without the intervention of this court.
    2. Complainant and defendant are both corporations of the State of New Jersey. The defendant could prosecute the claim it asserts against complainant, and which complainant resists, in the courts of this state. It could also prosecute its claim by attachment upon a large and valuable plant of complainant in Pennsylvania. In either New Jersey or Pennsylvania the claim could be prosecuted and defended by proofs and witnesses at hand. Under such circumstances defendant simultaneously commenced, by attachment, three several suits against complainant—in Ohio, Michigan and Wisconsin—wherein, for a claim of less than $4,000, credits to an amount exceeding $20,000 were attached.—Held, (1) that this use of the process of law courts had the obvious effect to harass and oppress the defendant, and must be decreed to have been intended to do so; (2) that if complainant will, by giving proper security, put defendant in a position to enforce its claim as favorable as it has acquired by the attachments in question, it will be entitled to an injunction against the further prosecution of the attachments.

      On rule to show cause why an injunction should not issue.

      Mr. Martin V. Bergen, Jr., for the complainant.

      Mr. Charles D. Thompson, for the defendant.
   Mague, Chancellor.

The right of one claiming to be a creditor to pursue his debtor in any court of competent jurisdiction selected by him ought not to be interfered with by an injunction, unless it is made to appear clearly that the alleged creditor is using the process of the courts in an inequitable and unconscionable manner.

The bill in this cause is filed by the complainant to obtain an injunction restraining the defendant from further prosecuting three several actions against complainant, commenced by attachment, one in the State of Wisconsin, another in the State of Michigan, and the third in the State of Ohio. Upon the filing of the bill, with accompanying affidavits, a rule to show cause why the injunction prayed for should not issue was made, with an ad interim stay. The rule was brought to hearing upon the bill and accompanying affidavits, the answer of the defendant and accompanying affidayits, and an additional affidavit presented on the part of the complainant.

It is first claimed on the part of complainant that the rule should be made absolute and an injunction be issued restraining the further prosecution of the actions in question upon the ground that it is made to appear that the claim of defendant against the complainant on which those actions are founded has been satisfied and discharged, and cannot be rightly prosecuted to judgment therein.

The accord and satisfaction thus claimed will doubtless furnish, if established by sufficient proof, a complete defence to the complainant against the enforcement of defendant’s claim in said actions, or other actions if brought.

Counsel for complainant, while conceding that it had a complete defence to defendant’s claim in the actions at law, insists that it may also invoke the power of equity, and relies upon decisions of our courts to sustain that contention. He cites Cor nish v. Bryan, 3 N. J. Eq. (2 Stock.) 146; Smith v. Smith, 30 N. J. Eq. (3 Stew.) 564; Metler v. Metler, 18 N. J. Eq. (3 C. E. Gr.) 270; S. C. on appeal, 19 N. J. Eq. (4 C. E. Gr.) 457. In Cornish v. Bryan, Chancellor Williamson decreed the delivering up and cancellation of a bond and mortgage, upon satisfactory proof that the mortgagor had paid the amount due to the mortgagee before he had assigned them to the present holder, no action upon the bond then having been taken. He intimates that if a suit at law had been commenced to which there was a complete defence, the court might refuse to change the forum of litigation, unless, in the exercise of. a sound discretion, the particular case before the court required such relief. In Metier v. Metier, Chancellor Zabriskie sustained, against demurrer, a bill setting up a pending action at law on a promissory note negotiable on its face, given without consideration and on agreement that it should be given up on a contingency which had happened, and praying relief by a decree that the note should be delivered up and the action at law should be perpetually enjoined. The decision was affirmed in the court of errors and appeals. In Smith v. Smith, Vice-Chancellor Van Fleet, on final hearing, advised a decree for the surrender of promissory notes which lacked validity for want of consideration, and a perpetual injunction against actions at law which had been brought thereon. The circumstances disclosed in that case were deemed to justify a resort to this court, although there was a complete defence at law.

In the later case of Ellicott v. Chamberlin, 37 N. J. Eq. (10 Stew.) 470, Chancellor Runyon, on final hearing, dismissed a bill by the maker of a promissory note, given to procure from the payee, an executor, a renunciation of his executorship, and seeking, among other relief, a- restraint of a pending action at law upon the note. In the court of errors and appeals the decree of this court was affirmed, but Justice Parker, delivering the opinion, declared that the maker of the note could present a defence in the action at law, which seemed to have been doubted or denied in this court. Ellicott v. Chamberlin, 38 N. J. Eq. (11 Stew.) 604 In Chase v. Chase, 50 N. J. Eq. (5 Dick.) 143, Vice-Chancellor- Van Fleet, after reviewing the cases above referrecl to, declined, to interfere to decree the surrender of a bond upon which an action at law was pending and to which there was a complete defence at law.

My conclusion from this course of decisions is that where an action at law is pending in which there is a complete defence, this court will not assume jurisdiction and withdraw the question from the law court, unless the case involves some equitable element which it cannot apply and which must be applied in order that complete justice may be done, or unless the case discloses that such relief as the party is entitled to cannot be afforded by the court of law, or without the intervention of this court with its injunctive power.

Upon the ease presented by contradictory affidavits, a preliminary injunction ought not to be granted.

But there is presented a ground upon which the complainant is entitled to some relief. Upon the facts disclosed, I think it apparent that the defendant is using the process of courts of law to harass and oppress the complainant.

It appears, and is conceded, that both complainant and defendant are incorporated under the -laws of the State of New Jersey. The complainant can be sued within this state, and the claim of defendant could have been here raised within the jurisdiction of its courts. The complainant, moreover, has a large and valuable plant in the State of Pennsylvania. Defendant’s claim could have been presented by attachment in that state. It appears that the claim arose from transactions between the parties whereby complainant purchased steel from defendant, and that the claim therefor was disputed, and that the alleged accord and satisfaction is claimed to be made out by proof of the return of some of the steel purchased, and by correspondence between the officers of the companies, and the acceptance and use of a cheek of complainant for a sum less than the claim.

It is made to appear that the proofs requisite to make out the defence must be furnished by employes and officers of the parties who are in New Jersey and Pennsylvania. It is a fair inference that defendant, to maintain its claim, must rely upon documentary evidence and witnesses more conveniently presented in actions either in New Jersey or Pennsylvania. Under these circumstances the defendant did not issue process in the State of New Jersey, or attach the valuable plant of the complainant in Pennsylvania, but it went to western states, and there simultaneously issued three attachments against the complainant, attaching money in the hands of persons who are indebted to the complainant to an amount in all in excess of $20,000. The debt claimed is admitted to be only $3,652.98. Obviously this course of conduct tends to harass and oppress the complainant. It must be driven to defend three separate actions in three foreign states, simultaneously proceeding, and it will be obliged, unless it deems it proper to yield to a claim which it disputes, to carry its proofs and witnesses to distant states, or attempt to present its evidence under commission. Defendant’s counsel pointed out that the laws of the three states permit a defendant in attachment to be released from the lien of the attachment which has been issued for indebtedness by giving security. In that case, however, the complainant will still be obliged to defend the action commenced by attachment. That this course of conduct in fact harasses and oppresses the complainant was not denied, but it was insisted that the attachments were not issued with that intent, but in a bona fide desire to-collect the claim, which defendant asserts has not been discharged. That the use of attaclnnents having this obvious result was not intended to produce the result is not within the-range of belief. I think, therefore, that the complainant presents-a case for relief.

The only question that has given me any trouble has been whether the bill is not deficient in that it does not offer to do-equity. Equity will require the complainant to put the defendant in a position to enforce its claim, and in a position as favorable to that enforcement as it now possesses by means of the-attachments in question. But no objection to the bill was interposed on this ground, and at the argument the complainant; offered to submit to any equitable terms that should be imposed upon it as a condition of the restraint it seeks.

I think that it should be compelled to secure the defendant an opportunity for speedy trial and the payment of whatever claim defendant ■ establishes. If, therefore, complainant files, within ten days, a bond to the defendant in the penal sum of $8,000, with sufficient security (the form of the bond and the sufficiency of the security to be approved by Charles Y. D. Joline, special master), conditioned that if defendant applies in this cause and consents to an order of reference whereby it may be determined whether the complainant is indebted to it, and if so, for how much; or if the defendant elects so to do, and brings an action in any court of competent jurisdiction in this state upon the claim set up in the answer, that the complainant will appear to the action, plead issuably, and accept short notice of trial, and if in either way it shall be determined that the complainant owes the defendant the amount claimed, or any part thereof, that complainant will, within twenty days from the final determination, pay the amount so determined, and also the taxed costs of the defendant in this suit, and the costs of the attachments in question, upon the filing of the bond, an injunction will issue restraining the further prosecution of the actions commenced by the attachments aforesaid until the further order of this court.


author: Magib, Chancellor.

text:
    Estelle A. Brant v. Arthur Brant.
    [Decided May 11th, 1906.]
    1. The affidavit of non-collusion required by section 5 of the Divorce act must be annexed to a petition which seeks divorce from bed and board under the provisions of section 3 of that act.
    2. The notice of the order of publication to be served on an, absent defendant is required to state the object of the suit; and if the notice undertakes unnecessarily to assert the grounds upon which relief is sought, it must state grounds which give jurisdiction to the court to decree relief.

      On petition for divorce and motion for a reference, no answer having been filed by the defendant.

      Mr. George II. Bruce, for the petitioner.
   Magib, Chancellor.

There are two questions raised upon the petition and its accompanying affidavit and one upon the proofs of service of a notice under an order for publication.

The first question is whether the affidavit of non-collusion required by section 5 of the Divorce act (P. L. 1902 p. 502) must be annexed to a petition which seeks divorce from bed and board under the provisions of section 3 of that act. Under the heading “Causes for Divorce,” the act includes section 3, and thereby enacts that divorce from bed and board, forever or for a limited time, may be decreed for “extreme cruelty.”

When, by section 5, the legislature declared that the court should not exercise the jurisdiction previously granted in any cause for divorce, unless an oath or affirmation of non-collusion is annexed to the bill or petition,, the provision obviously included the case of a divorce from bed and board for extreme cruelty, for the act before provided that for extreme cruelty there might be such a divorce. It is true that complainant or petitioner is thereby required to swear or affirm that the complaint is not made by collusion for the purpose of dissolving the marriage, and a divorce from bed and board, it is well settled, does not dissolve the marriage. While the relief for the cause of extreme cruelty is a perpetual or limited separation, and no more, yet our legislation has characterized the judicial act which affords relief as a divorce. It is so designated in the Divorce act, passed February 16th, 1820 (Rev. p. 667); in the revised act of April 15th, 1846 (Rev. Stat. p. 922); in the revised act of March 27th, 1874 (Rev. p. 251), and each of said acts requires an oath of no collusion for the purpose of dissolving the marriage.

From this long course of legislation providing for divorce from bed and board for extreme cruelty, and yet requiring an affidavit of no collusion for the purpose of dissolving marriage before jurisdiction can be exercised for that canse, I' conclude that the language of the required affidavit, in its application to a bill or petition for a divorce from bed and board, must have been intended, and must be construed, as referring to a dissolution of the marriage relation pro tanto, by a separation decreed for a time limited or for life.

The affidavit required by section 5 must be annexed to any bill or petition which seeks divorce for extreme cruelty, and no jurisdiction will be acquired over the cause without it.

The next question is whether the affidavit attached to this petition is such as is required by section 5. Such an affidavit may probably be sufficient if it expresses the matter so required, although not expressed in the precise language of that section.

The petitioner therein swears that the “petition” is not made by any collusion ■ between her and the defendant “for the purpose of procuring a separation.”

• The affiant departs from the requirements of section 5 in two particulars—first, she fails to aver that her complaint is not made by collusion, and substitutes for it an averment that the petition is not made by collusion; second, she substitutes for the statutory phrase “dissolving the marriage” the words “procuring a separation.”

It is obvious that the legislative purpose in requiring an affidavit annexed to' the bill or petition as a sine qua non of jurisdiction was to exact from the suitor seeking divorce at the very outset of the cause a solemn declaration that the relief was not sought by collusion. What is required to' be sworn to is plainly set out in the act. A departure from its requirements induces suspicion. One not in conformity to tire language of the act ought not to be passed, unless it contains substantial equivalents thereto.

The affidavit attached to this petition induces suspicion. The act requires it to assert that the complaint is not made by collusion. -The complaint in such cases is the statement of the causes on which divorce is sought. That complaint is contained in the bill or petition. An affidavit made in the language of the act plainly avers that the assertion of those causes for divorce is not collusive. When the affiant in this affidavit substitutes “petition” for “complaint,” did she make oath that her complaint was not made by collusion? As the petition contains the complaint and asserts the causes for which relief is sought, as well as asks relief, I have, after some hesitation, concluded that the affidavit, in this respect, is a substantial compliance with the requirement of the act.

But I am inclined to think that the language of the act does not find a substantial equivalent in the averment of non-collusion for the purpose of procuring a separation. Petitioner seeks a divorce, and that kind of a divorce which produces a limited dissolution of the marriage relation. Procuring a. separation does not seem to me to express that idea with sufficient acc'uracv. In this respect the affidavit seems to be defective.

Another question arises with respect to the effort to bring the defendant into court so as to justify further proceeding.

Jurisdiction to proceed against this absent defendant depends upon the service of a notice to him, and the question is whether it is such ás is required by rule 58 and the statute. Service of the order of publication or of a copy of the petition cannot be of any avail to give jurisdiction to act upon the defendant.

In this case, the notice of the order of publication which was served on the defendant declares that the action is brought for a separation (not divorce), on the grounds of cruel and inhuman treatment of the petitioner by defendant, and not for extreme cruelty, which the act declares to be cause for divorce.

The notice is required to state the object of the suit (P. L. 190.3 p. IMj rules 58 and 61), and that object is divorce. The form or precedent given by Colonel Dickinson indicates that the notice may specify what kind of divorce is sought. Dicte. Oh. Free. 31. If the notice undertakes, unnecessarily, to assert the grounds upon which relief is sought, it must state grounds which, by the statute, give jurisdiction to the court to decree relief.

In my judgment, this notice is defective, (1) because it does not state the object of the suit to be divorce, and (3) because no jurisdiction to divorce is conferred for cruel and inhuman treatment, but only for extreme cruelty.

An order of reference cannot be made in this cause.


author: Pitney, Y. C.

text:
      J. Thomas Reinhardt v. The Inter-State Telephone Company.
    [Submitted February 14th, 1906.
    Decided February 23d, 1906.]
    1. Where complainant in fact owned stock in defendant corporation, he could sue for the appointment of a receiver for the corporation in insolvency proceedings, though the stock stood in the name of the broker by whom it was purchased for complainant.
    2. The holder of unpaid coupons of bonds secured by a mortgage given by defendant corporation is a creditor of the corporation for the purpose of prosecuting a suit to have defendant declared insolvent and for the appointment of a receiver.
    3. A suit by a bondholder of a corporation to throw if into insolvency and administer its assets for the benefit of all of its creditors is not a suit to collect the debt evidenced by the bond and secured by a mortgage, within the provision of the mortgage that no holder or holders of any less proportion than twenty-five per cent, of the total amount in value of the outstanding bonds or coupons secured thereby shall be entitled to institute any proceeding to foreclose the mortgage, or to execute the trust, or for the appointment of a receiver, or for any other remedy under the mortgage.
    4. Where a corporate mortgage securing bonds attempted to forbid the foreclosure of the mortgage by the ordinary process at the instance of the holders of any of the bonds, declaring that the trustee should enforce the mortgage by entering and taking possession and selling the property without the aid of the court, and that the rights and remedies secured to the holders of the bonds as against the mortgaged premises and every part thereof should be exclusive of all others, any law or usage, present or future, to the contrary notwithstanding, such provisions were impotent to deprive the court of its inherent right to supervise the conduct of the trustee in foreclosing the mortgage.
    5. Facts held sufficient to show that defendant corporation was insolvent, and could not within a short time resume its business with safety to the public and advantage to its stockholders, and was therefore subject to the appointment of a receiver in a suit by a bondholder, as authorized by the Corporation act, section 65. P. L. 1896 p. 298.

    On motion for- the appointment of a receiver in insolvency. Heard on bill and affidavit and answer and affidavit.

      Mr. Albert Chandler Wall, for the complainant.

      Mr. FranTc 8. Katzenbach, Jr., for the defendant.
   Pitney, Y. C.

The complainant, Reinhardt, is the holder of eleven bonds for $1,000 each, with interest coupons annexed, dated July 16th, 1901, issued by the Inter-State Telephone Company, a corporation of this state, and secured by a mortgage made by that company to the Trenton Trust and Safe Deposit Company.

The bonds are payable in 1931, and the coupons for the interest mature on the 1st clay of January and July of-each year.

The mortgage provides for an issue of $5,000,000 in $1,000 bonds. Of these nineteen hundred and thirteen (1,913) have been issued.

The plaintiff acquired one of his bonds in July, 1904, and ten on the 14th of June, 1905.

The coupons on his bonds, which came due on the lst-of July, 1905, were put by him in the course of collection and paid, but by whom it does not appear, the defendant denying that they were paid by it, and so far as appears none others were paid of those maturing on that day.

None of those maturing on the 1st day of January, 1906, were paid. The complainant purchased a few shares of the stock of the company in December, 1905.

On the 8th of January, 1906, he filed his bill in this court, on his own behalf and of all others who may apply to be made parties thereto, setting forth the facts hereinbefore stated, and others, to be stated farther on, and asking for an order of insolvency and the appointment of a receiver.

An order to show cause was made, returnable on the 16th of January, and on that day was adjourned to the 23d of January.

On that day the defendant appeared and filed its answer, with affidavits annexed, and the motion was argued and submitted on the affidavits annexed to the complainant’s bill and those annexed to the defendant’s answer.

Several objections were made to the complainant’s standing, both as a creditor and stockholder, which I will now consider.

With regard to the ownership of the stock, it is alleged that the complainant purchased it on December 20th, 1905, after he knew of defendant’s embarrassment, and that it was so purchased for the purpose of giving him the standing of a stockholder in a suit to- be brought against the company. This is, in substance, admitted by the complainant.

The stock stands in the name of the broker who purchased it for the complainant, but belongs to the complainant. This is sufficient to give him a standing in this court, as held by me in O'Connor v. International Silver Co., 68 N. J. Eq. 67, and affirmed on appeal, 168 N. J. Eq. 680.

With regard to his ownership of the bonds and the holding of the unpaid coupons belonging thereto, it is argued that he is not entitled to the standing of a creditor, on two grounds.

First, that an action at law under our statute of March 23d, 1881 (P. L. 1881 p. 164; Gen. Stat. p. 2112), will not lie for unpaid coupons, as held in Holmes v. Seashore Electric Railroad Co., 57 N. J. Law (28 Vr.) 16. That case is apparently precisely in point, in support of that proposition.

I say “apparently,” for unless the verbiage of the bond and mortgage there involved is the same as that here involved, it may not be in point. A reading of the act of March 23d, 1881, whose protection is here invoked, shows that the bond and mortgage covered thereby was the well-known and time-honored bond and mortgage which had been from time immemorial in use in New Jersey, namely, a bond in a penal sum d&uble the amount of the indebtedness, conditioned to pay the real indebtedness at the time specified. The mortgage was an ordinary common law conveyance in fee-simple, with a proviso that if the money secured in the bond should be paid according to the conditions thereof then the conveyance should be void, otherwise to remain in full force and virtue.

Now, it requires no argument to sustain the position that the act in question, being in derogation of the common law, must be construed strictly. It was so held by the late Chancellor Bunyon, in Crater v. Smith, 42 N. J. Eq. (15 Stew.) 348, and his decree in that case was affirmed by the court of' errors and appeals in 43 N. J. Eq. (16 Stew.) 636, and the objects of the law explained by the same learned judge, who spoke for the-supreme court in the case cited from >57 N. J. Law {28 Yr.) 16:' In the absence of the printed record in that case, I must presume that the bond and mortgage therein dealt with were-in form and character precisely within the language of the statute.

If we look at the form of the bond in the case before us, it does not answer the' description which I have given. It is a mere acknowledgment of indebtedness to the trustee and is payable to bearer, and amounts to no more than a sealed bill or promissory note under seal.

Further, .in order to bring the ease within the prohibitory’ statute, the mortgage must be one which the holder of the bond can foreclose at his option, for the act declares that in all cases where a bond and mortgage had been or might thereafter be given for the same debt, all proceedings to collect the debt should be first to foreclose the mortgage, and if, after applying the proceeds of the foreclosure there should be a deficiency, suit therefor upon the bond must be brought within six months. Now, manifestly, it could not have been the intention of the legislature to bar an action on' the bond unless the holder of it had a right to foreclose the mortgage at his will and option.

Here, again, it is to be remarked that the foreclosure proceedings spoken of in the statute are the well-known and time-honored proceedings by English bill, asking for a sale of the land by an officer of the court, and, after sold, a foreclosure of the equity of redemption.

Now, if we examine the’ mortgage here in question, we find that in its sixth article it expressly confines the remedies of the bondholders to affirmative action by the trustee, namely, that he shall enter and take possession and sell, and pay the proceeds to the bondholders, the process being given _ with considerable detail, and then follows this clause :

“and it being further distinctly understood, declared and decreed, any law or usage, present or future, to the contx-ary notwithstanding, that the rights and remedies secured to the holders of the aforesaid bonds by this indenture, and the trust therein declared, shall, as against the mortgaged premises, and every part thereof, be exclusive of all others, and especially that no part of the mortgaged premises shall be levied upon, taken into execution or sold under any jxxdgment or decree obtained by the holder or holders of any of the said bonds against the telephone company for the payment of either principal or interest of the bonds intended to be hereby secured, unless such judgment or decree shall have been entered for the purpose of enforcing the trust, or power of eiitry and sale hereinbefore contained.”

Now, under these circumstances, I think, if it were necessary so to hold, that I should feel constrained to hold that the act of 1881 does not apply to this case.

But be that as it may, the question here is not whether the complainant can lawfully bring an action at law upon his coupons (which are in the ordinary form of a simple promise to pay the bearer, on the 1st day of January, 1906, at the office of the Trenton Trust and Safe Deposit Company, of Trenton, N. J., $25, in gold coin, being six months’ interest on its mortgage bond numbered -, and signed by the treasurer), but the question is whether the complainant is a creditor of the 'defendant.

It seems to me the position that he is not a creditor is hardly arguable, and the case before cited of Smith v. Crater, 42 N. J. Eq. (15 Stew.) 348, and 43 N. J. Eq. (16 Stew.) 636, holds that he is a creditor. There a party held a bond and mortgage against a decedent whose estate was insolvent, and before foreclosing his mortgage he presented a sworn claim to the administrator, which was stricken out by the orphans court on the strength of this statute, but was reinstated and held to be valid by both the chancellor in the prerogative court and the court of errors and appeals on appeal therefrom.

And it was further held that the creditor having, after presenting his claim as just stated, foreclosed his mortgage and shown a deficiency on his bond, his claim previously presented should stand for such deficiency without any suit being brought on the bond, and after six months had elapsed after foreclosure.

Moreover, the precise question here involved was recently before Vice-Chancellor Garrison and considered by him in the unreported case of Skiddy v. Lyons & Campbell Cattle Co., and he informs me that, after consideration, he held the holder of unpaid coupons of bonds secured by a mortgage of the defendant corporation to be a creditor for the purpose of prosecuting a suit to have that defendant declared insolvent, and that he so declared it and appointed a receiver.

The next objection to the complainant’s standing is based on article No. 7 contained in the mortgage in the following language :

“Article Seventh. It is agreed that no holder or holders of any less proportion than twenty-five per cent, of the total amount in value of the outstanding bonds or coupons secured thereby shall have the right to institute any suit, action or proceeding in equity or at law for the foreclosure of this mortgage or the execution of the' trusts thereof, or for the appointment of a receiver, or for any other remedy under this mortgage, and that no such suit, action or proceeding shall be instituted without first giving thirty days’ notice in writing to the trustee of the fact that default has occurred • and continued as aforesaid, and fully indemnifying the trustee against all loss, costs or damages arising from such suit.”

It is argued by the defendant that this suit is included within that language. I do not so construe it. The bill is an ordinary bill, filed under the sixtj’-fifth section of the Corporation act of 1896, and it alleges, in the tenth and last paragraph, that the company is insolvent, and cannot carry on its business with safety to its creditors or stockholders, and that the company cannot resume business with safety to the public or with advantage to its stockholders, and prays that the company may be decreed to be insolvent; that an injunction in the usual form may issue, and that a receiver may be appointed.

This shows that the bill is not a suit to enforce or collect the debt due to the complainant, but is simply a statutory suit to throw the company into insolvency and administer its assets in this court for the benefit of all the creditors.

The defendant relies upon a decision of Judge Goff, in the circuit court of the United States, in McGeorge v. Big Stone Gap Improvement Co., 57 Fed. Rep. 262. But that case does not cover this, for two reasons. In the first place, the language of the clause relied on in that case is different from that in the present case, and in the second place, the object of the suit was quite different from that in this case.

That was not a suit to throw the company into insolvency, but rather for the appointment of a receiver to manage the affairs of the company, based on the alleged misconduct of those in control.

The language in the clause in that case was this:

“No suit, action or proceeding in law or in equity for the foreclosure of this mortgage or deed of trust, or the execution of the trust therefor, or for any other remedy, shall be brought or instituted except by, through or in the name of the trustee for the time being, and then only after notice in writing, * * * and upon the request in writing of one-fifth in amount, * * * and the offer ,to the trustee of adequate security and indemnity, * * * and such request and offer of indemnity are hereby declared to be conditions precedent for the execution of the powers and trusts of this mortgage to any action or cause of action for the foreclosure or for any other remedy hereunder.”

In the case in hand the prohibition is against instituting any suit or proceeding in equity or at láw for the foreclosure of this mortgage, or for the appointment of a receiver, or for any other remedy "under this mortgage

Now, I construe that as meaning that no action based on' the mortgage, whether in equity or at law, shall be brought, and that the receiver whose appointment is forbidden is a receiver under the mortgage, and that the clause does not apply to the present case.

If we look farther at the mortgage in this case we shall find, as before remarked, that it actually forbids, or attempts to do so, the foreclosure of the mortgage by the ordinary process at the instance of the holders of any of the bonds, for it provides that the trustee shall enforce the mortgage by entering and taking possession—apparently by the strong hand—and proceed to sell the property without the aid of any court. Then follows a clause providing

“that the rights and remedies secured to the holders of the aforesaid bonds by the mortgage shall, as against the mortgaged premises, and every part thereof, be exclusive of all others, any law or usage, present or future, to the contrary notwithstanding.”

And it provides that the mode of sale fixed by the mortgage shall be exclusive of ail others.

1 think it safe to affirm that clauses of that character, restrictive of the common-law right of a creditor who holds a plain obligation of his debtor, are not favored by the courts, and such clauses must be strictly construed. It was so held by the supreme court of the United States, in Guaranty Trust Co. v. Railroad Company, 139 U. S. 137. At p. 142, the court says: “We think such limitations upon the power of the trustee to take legal proceedings to enforce payment of the amount secured should be strictly construed.”

And then, farther on, it says: “It is true there is a subsequent provision in the deed of trust to the effect that ‘neither the whole nor any part of'the premises shall be sold, under proceedings either at law or in equity, for the recovery of the principal or interest of the bonds, it being the intention and agreement of the parties that the mode of sale provided by the mortgage shall be exclusive of all others.'’ This clause, however, is open to the objection of attempting to provide against a remedy in the ordinary course of judicial proceedings, and oust the jurisdiction of the courts, which, as is settled by the uniform current of authority, cannot be done.” Citing numerous authorities.

I am of the opinion that the clauses in the mortgage now under consideration are impotent to deprive this court of its ancient and inherent right to supervise the conduct of trustees in the execution of their trusts.

The third point made by the defendant is that it is not insolvent within the meaning of that word as used in the sixty-fifth section of the Corporation act, and has not arrived at the condition when “it is not about to resume its business in a short time thereafter with safety to the public and advantage to the stockholders.” It avers that it has not suspended its business, but is carrying it on without interruption.

So far as can be inferred from the answer and affidavits the defendant owns little or no visible property, and perhaps conducts little or no business directly. It was organized for the purpose of purchasing and. holding the capital stock of several telephone companies located in different towns and cities of this state and the adjoining State of Pennsylvania, and expended its capital stock and some of its bonds in purchasing the whole or a controlling majority of the capital stock of these companies, and, presumably, operates them through their original local organization.

The expense of carrying on the business of each of those organizations may be entirely covered by the receipts therefrom, and thus the business kept going, and yet there may be no surplus to pay the interest accruing on the cost of those local systems to the defendant company.. This, as I understand, is precisely what has happened, as shown by the defendant’s affidavits. Defendant makes no> promise and expresses no hope that it is now or soon will be ready to pay the coupons on its bonds which fell due in July, 1905, and again in January, 1906, or those which will mature hereafter.

In the face of this default, counsel argues that so long as it keeps its telephone system in operation it is not insolvent, because it has not stopped its ordinary business. Its position is this: “The New Jersey statute will not permit us to be sued on our overdue coupons, and the terms of the mortgage will not permit it to be foreclosed except at the will of the trustee in the peculiar manner therein set forth. Our business is being conducted without interruption, and so our creditors are helpless.”

Can such a position be tolerated by a court of justice? I think not.

The language above quoted from the sixty-fifth section of the present Corporation act had its origin in the act of February 16th, 1829. Ilarr. Comp. 21J±. At that time corporations had not assumed such a variety of forms and undertaken such a variety of functions as the ingenuity of lawyers and the exigencies, real or supposed, of modern business transactions have since evolved. These require that the language in question should be liberally construed to meet the varying circumstances, and that has been the course of our courts.

The' test that has been adopted is this: Can the corporation, in the present or near future, meet its maturing pecuniary obligations? Such was the view of Chancellor McGill, in Fort Wayne Electric Corporation v. Franklin Electric Light Co., 57 N. J. Eq. (13 Dick.) 7 (1898), where he says (at p. 13) : “Insolvency carries with it inability to presently pay indebtedness and suspension of that function, and the word ‘resume,’ used in the statute, is, I think, to be taken in the sense of taking up again that suspended function, so that payment of indebtedness, as well as the operation of the work of the corporation, after temporal, partial or complete paralysis, may be ‘resumed’ with safety to the public and advantage to its stockholders.”

And of late years numerous corporations have been adjudged insolvent and receivers appointed therefor without any interruption of their business and before any debt has actually matured without payment, on proof merely that the corporation would be unable to meet its immediately maturing obligations, and that a scramble would ensue among its creditors!, resulting in inequality of distribution of its assets. It is common practice to declare railroad, gas and water companies, and other public service corporations, insolvent, and appoint a receiver, without the least interruptions of their public functions.

The proofs in this case, found in the affidavit of one of its directors annexed to the answer, show that in the summer of 1905, after the default which the defendant admits it made in the payment of its interest coupons maturing July 1st, a meeting of a large number of its bondholders was held, and the situation of the company investigated and considered, and a scheme of reorganization devised and adopted.

But the defendant says it is not responsible for the action of those bondholders. That may be, but the situation remains, namely, that the very respectable and efficient business men who fill its offices do not offer anything better and manifest no ability in that direction.

One of the directors and the vice-president of the company, whose affidavit is annexed to the answer, and who was one of the committee of bondholders who have devised the plan for reorganization, states in his affidavit the circumstances under which that plan was devised, and that the condition of the company was thoroughly examined and considered by that committee. That committee, in August, 1905, sent out a circular letter to each bondholder and creditor, accompanying a proposed agreement to be signed by every creditor, and which comprised the plan of reorganization in detail. • That circular letter commences in this wise:

“Dear Sir—Of course you are aware that the Inter-State Telephone Company defaulted in respect to the interest due on mortgage bonds on July 1st, 1905. It is also quite apparent that the company will not be able to meet the interest maturing on January 1st, 1906, nor the periodical payments semi-annually maturing for some time thereafter.’’’

It seems to me, under these circumstances, it is impossible to say that the company is not insolvent.

But, say the defendant, the company is in good hands; it is being well managed and no creditors are pressing, and grant that it is insolvent, yet the court ought not to throw it into the hands of a receiver, but should allow a majority of the bondholders to reorganize it.

Let us see just what the situation is.

The complainant owns eleven bonds out of nineteen hundred and thirteen, which are the only bonds secured by this mortgage, and are clearly, in equity, entitled to be paid out of the proceeds of the sale of all the property of the company. Besides these nineteen hundred and thirteen bonds, the defendant company, in 1901, borrowed $400,000 in cash, as is alleged by the defendant, and agreed to issue bonds therefor out of the main issue of $5,000,000 as soon as the physical condition of the property owned by the company should justify the trustee in issuing those bonds, there being a restriction in the mortgage against issuing bonds- faster than a certain condition of the wires and poles and telephone machines existed—that is, they were not to be-issued any faster than the enlargement of the works of the company progressed. Upon that unsecured debt of $400,000 interest has accrued to the extent of $80,000. Besides that there-is a floating debt, not previously mentioned, of between $30,000- and $40,000, making altogether an unsecured indebtedness of' over $500,000; and, further, a pressing indebtedness of one of' the corporations owned by the defendant of $30,000.

Now, the plan of reorganization is that the old mortgage-should be disposed of, either by foreclosure or universal consent,. and two new mortgages made, viz., a first mortgage for $1,-000,000 and a second mortgage for $4,000,000, to secure the indebtedness, which is as follows:

Bonds actually issued ...................... $1,913,000
Bonds due to be issued, which have already been paid for .......................... 400,000 •
Total bond issue ..................... $2,313,000
Floating debt, approximately .........$40,000
July, 1905, coupons ................. 50,000
Accrued interest for four years, from July 1st, 1901, to July 1st, 1905... 80,000
Underlying bonds ................... 30,000
- 200,000
$2,513,000

Further, according to the plan of reorganization, the creditors must pay in fifteen per cent, of their several claims, which will amount to' $353,000, to be used by the new company in increasing its plant.

For such an advance in cash the creditors are to receive payment in first mortgage bonds of $1,000,000 at eighty cents on the dollar for the bonds, and the balance of $1,000,000 to be retained and issued for improvements. For their original indebtedness the creditors are to receive second mortgage bonds.

The result is that the present bondholder is put on a basis with the unsecured creditors and receives bonds secured by a second mortgage and is compelled to loan the company additional money.

The gain to the company, over and above the cash which it will receive, is the extinction of tire limit under the mortgage against the issue of bonds any faster than is warranted by the property which is pledged to pay them.

Now, it is manifest and is conceded that unless every creditor consents, there must be a sale of this property, either under the mortgage or by a receiver, either clear of the mortgage or subject to it. The peculiar provisions of the sixth section of the mortgage, which has already been alluded to, gives the trustee power to sell without judicial process, but this cannot be permitted by this court if any creditor shall object. It is both within the power and it is also the duty of this court to supervise such a sale at the instance of any creditor interested in it. The complainant, as the holder of only eleven bonds, could hardly be refused if he asked the aid of this court in that behalf.

He is not only entitled to the supervision of the court in the conduct of the sale, but to the aid, so to speak, of the court in seeing to it that the property shall bring its full value, and that the sale shall not be a mere nominal one for the purpose of merely extinguishing the present mortgage.

He contends that all this can bo done by the receiver, who will represent the creditors, including the bondholders, and in the meantime will see to it that the current income of the property is properly applied and confined to the payment of the current expenses, and the surplus, if any, be reserved for the mortgagee.

Upon the whole case, then, I am of opinion ás follows:

First. That the complainant is a creditor of the defendant corporation, and has a standing in this court to invoke its statutory action in the way of appointing a receiver.

Second. That such action is not forbidden by the terms of the mortgage securing his debt.

Third. That the defendant is insolvent, in the sense in which that word is used in the statute.

Fourth. That a receiver should be appointed.

Such appointment will not necessarily or naturally interfere with the present conduct of the daily routine or business of the company, or displace any of its active servants and emploj'es.

1 will hear counsel as to the choice of a receiver.


author: Pitney., Y. C.

text:
    Charlotte Bidwell, individually, and as executrix of Henry C. Bidwell, deceased, et al., v. Eliza A. Piercy.
    [Argued April 23d and 24th, 1905.
    Decided March 5th, 1906.]
    1. Where a wife died seized of certain city lots, leaving her surviving her husband and four children, after which the husband leased the lots to another, such lease terminated by operation of law on the husband’s death, the children not having joined therein.
    2. Where a grantor conveyed certain land for an inadequate consideration to the wife of his intimate friend, to whom he had rented the property, for the alleged purpose of freeing his mind from the burden of his supposed obligation to pay taxes on the tenant’s improvements, and the grantee had knowledge at the time that the grantor was an old man and had suffered a severe stroke of apoplexy, the burden was on such grantee to establish that the grantor had capacity to execute the deed.
    3. In a suit to set aside an improvident deed executed by a grantor when he was sixty years of age, and after he had been compelled to give up business because of a stroke of apoplexy, evidence held sufficient to establish that he had not sufficient capacity to execute the same.
    4. Where a grantee, holding under a deed executed by a grantor without sufficient mental capacity, had not changed her position to her prejudice because of the deed, nor spent any money in improving the property, which he would not have spent under a lease thereof that was held by her husband at the time the deed was made, the grantor’s distributees were not estopped to recover the land on placing the grantee in statu quo.

    Final hearing on bill, answer and proofs.

      Mr. Robert L. Lawrence, for the complainants.

      Mr. L. Edward Hermann, Jr., for the defendant.
   Pitney., Y. C.

(orally).

Ido not care to hear you, Mr. Lawrence.

The suit is brought by the widow and. four children, as devisees of Henry C. Bidwell, to set aside a conveyance made by him on the 29th of January, 1903, to the defendant, Mrs. Piercy, of a lot of land in the city of Jersey City for the consideration of $200.

The bill has a double aspect.

In the first place, it alleges that the whole conveyance should be set aside because the deceased, at the time he made it, was not in a state of mind and did not have the proper surroundings to enable him to make the contract.

And, second, that he did not understand that he was conveying all tire land described by the deed, and that if it be sustained, it should be sustained only for a portion of the land.

This last claim is irrespective of the degree of his mental capacity, and the complainants support the claim of mistake by a reading of the deed itself.

I will consider both of these matters together, but after stating the facts and history, I will pay attention to the description in the deed first.

Mr. Bidwell was a gentleman about sixty years old, a married man, living with his second wife. He had four adult children by his first wife, a son and three daughters, and an infant child by his second wife. His father had died many years previously, leaving a pretty large family of" children and considerable, real estate in the neighborhood where Mr. Bidwell lived, and that real estate had been plotted after the death of the elder Bidwell into building lots by Eowler & Yan Kuerin, a firm of surveyors, and there had been a partition between the heirs, carried out by conveyances.

Afterwards a street had been moved, which made it necessary to readjust the division to make it adapt itself to the change of the street, and the result was a new series of conveyances, made in 1895, I believe, which will account for a curious state of things to which I will refer directly.

Then one or two maps of the street and lots as readjusted were prepared for the purpose of an auction, to he held on the 23d of May, 1900, by Mr. Wolbert, a well-known auctioneer in Jersey City. Those maps were made and printed on paper, no doubt in great numbers, and are produced here, and when you look at them you can see that they were intended to be spread around among people to attract purchasers, and no doubt were extensively distributed.

The part of the property with which we are now dealing was near the corner of Jackson avenue and Bidwell avenue.

Mr. Henry.Bidwell, the grantor herein, lived in a house built on lot No. 58, which fronted on Jackson avenue, and was separated by one lot, No. 57, from Bidwell avenue, which was the corner lot.

Then on the other side of 58 were two others, 59 and 60, the four lots, taken together, making pretty nearly a square, fronting-on Jackson avenue, and were all used and occupied, as I understand it, in connection with the dwelling-house.

But the title to the two lots, 57 and 58, immediately connected with the dwelling had been in his first wife, and at her death descended to her four children, the complainants herein, subject, however, to his life right.

The title of lots 59 and 60 was in Mr. Bidwell; also the lot in the rear of the four lots, 57, 58, 59, '60, which fronted on Bid-well avenue, numbered 137, and is known in common language as a butt lot.

That lot was nearly forty-two feet front and one hundred and twelve feet deep. It had a peculiar shape. That depth-—one hundred and twelve feet—was greater than the combined width of the four lots Nos. 57, 58, 59 and 60, so that the butt lot extended further into the body of the block by twenty-one feet and some inches than the other four, and also had a little jog on the side of it a few feet in ufidth, making it forty-four feet and forty-five hundredths inches in width at the rear and forty-one and eighty-six hundredths in front. (See map annexed.)

Portion of the Lithographed Map of Building Lots at Jersey City Heights, belonging to the Estate of A. G. Bidwell, deceased.

Now, on lot 137 and on the lot adjoining, 136, which belonged to Dr. Bidwell, a brother of Henry, was a dwelling, a shallow, long dwelling, which stood partly on both lots, and on No. 137 was a set of greenhouses, which encroached, as I understand the evidence, ten feet on the rear of the four lots, 57, 58, 59 and 60, which I have mentioned, and which fronted on Jackson avenue.

The greenhouses extended nearly to the rear of the lot, and were occupied, and had been for many years, by Mr. Piercy, husband of the defendant, and Mr. Henry C. Bidwell was entitled to the rent of all that part which belonged to his first wife, and after her death to her four children, as tenant by curtesy.

But by arrangement of all parties, the details of which are not given here, but is admitted on all hands, Mr. Piercy had the right of removal. He had a well nigh permanent lease. The length of his lease I do not know. I asked for it, but it was not given, and it is of no consequence. It may be in existence yet for what' I know. But he had a 'lease which enabled him to remove his greenhouses and dwelling, whatever it was, on lot 137, at the end of the lease. Necessarily he would be obliged to remove it, so far as lots 57 and 58 were concerned, at the death of Henry C. Bidwell, because the title of his children would then intervene, and unless they joined in the lease, that would end it.

Now, I state this all so minutely because I wish it well understood. I wish to see if I have made any mistake, though it may not be of much consequence. Now, that was the situation.

Mr. Piercy and Mr. Bidwell were intimate friends; it is so stated in the answer, and it so appears. Mr. Bidwell and Mr. Piercy were on confidential terms; I think that is the language in the answer.

In that state of things Mr. Bidwell, in the month of August, 1902, had a very severe stroke of apoplexy, so that he was unconscious for some time—I forget how many days, but absolutely unconscious for a considerable time. Now, that involves a serious lesion or wound of the brain; it is the bursting of a blood vessel on the brain, and that is a serious matter. The extent of its seriousness depends on two or three things—first, the amount of vitality and strength in the tissue of the brain and in. the general condition of the man’s or woman’s health; and second, on the extent of the rupture.

There is as much difference in the injury to the brain from a stroke of a.poplexy, varying with the extent of the rupture, as there is between the prick of a needle and the slash of a butcher knife on the external organs. It may be very slight, it may be very severe, and according to its severity is its effect upon the brain, which is the organ of the mind and thought. And it is common knowledge that a stroke of apoplexy affects a person’s mind, because the brain is the seat of the mind and it affects the brain.

Now, without going into the extent of that injury at this time, the result was that he stopped business, substantially. He had been pursuing some business in New York, but after he got a little better—after the first effects of the apoplexy were over, and his physical disability was considerably relieved, so that his inability to use his left hand and left leg were so far improved that he could walk with assistance—he did go occasionally to bis business in New York and stajr for a little while, until it was sold out. But, substantially, he was a confirmed invalid from that time until he died. -And the doctor says other serious symptoms appeared—softening of the brain and Bright’s disease of the. kidneys, and all those things. He was able to be about, but was an invalid.

Now, I am not going into the extent of the mental impairment any more than that—that he was disabled from doing any steady business, and certainly his mind was affected to a serious extent. We all know that the effect of softening of the brain is to weaken the mind, and the intervention of Bright’s disease has the same tendency.

Then, when he was lounging around home, particularly in the next winter, he spent a great deal of the time in the greenhouses, where there is artificial heat—and we all know what that would be for a weak gentleman—and plenty of light, and there he had the benefit of the society of his friend, Mr. Piercy, and to a most confidential extent, as Mr. Piercy swears and as he states in his answer.

Now, this bare vacant lot was rented at $36 a year. But the greenhouses, of course, were of a great dea] more value than that, and everybody knew it.

But it appears that the tax bills for the greenhouses were at one time made out against Mr. Bidwell, instead of against Mr. Piercy, or^ Mrs. Piercy, and that worried Mr. Bidwell. It ought not to have worried him at all. If he had been in full health and of sound mind it would not have disturbed him. He was just in that condition—crying about the least thing, and worried about the least thing—that it did worry him.

The result was, according to Mrs. BidwelPs testimony, that he told her he was going to sell that lot, on which the greenhouses -were, to Mr. Piercy, for the amount of the appraised valuation for the purposes of taxation—$200. It does not appear that anyone of his children knew that he was about to do it. His son swears that he did not know anything about it, and his daughter, who was living at home, swears to the same thing. His other two daughters were living in Washington City and could not have any knowledge of it. And it did not appear, from Mr. Piercy’s evidence, that he (Piercy) consulted with a single member of the family. He was questioned on that subject, and he never thought it worth while to say to the son, or to his wife or to -any of the children, “I am going to buy this property of your father.” Now, that is the posture of the affair. The bargain was made between Mr. Piercy and Mr. Bidwell in his greenhouses, as he was lounging there from day to day.

Well, the wife did not object. So much is against her. Whether she knew what the real value of the property was or not I do not know; but Dr. Bidwell swears it was worth at least $600, and judging from the rent it brought ($36 a year) it ought to be worth a great deal more than $200. But Mrs. Bidwell says that in order to quiet her husband’s mind she was willing to join in the deed for the property upon which the building stood —whether she knew it was ten feet of it on other land or not does not appear—but she said it was lot 137 that she understood was to be sold, and these maps were lying about as thick as leaves in Vallambrosa, I suppose, and she- knew what lot 137 was. And she understood it was to be lot 137, and says her husband understood it was to be lot 137.

So, according to the summing up of counsel—I did not so quite understand the evidence, but I take his statement of it, and it so appears by the answer—Mr. Piercy and Mr. Bidwell went to a scrivener to have a deed drawn. They went together. None of Mr. BidwelPs friends were with'him. A man of weakened mind goes with his confidential friend to have a deed prepared from him to Iris confidential friend, with no one at his elbow to look after his rights. That was the situation—confessedly the situation.

They went to a Mr. Mumford to have the deed prepared. Now, it would have been very satisfactory to the court if Mr. Mumford had been called here as a witness, and counsel for defendant, in his very able and ingenious argument, felt that at once, and he said it was the duty of the complainant to bring Mr. Mumford here, and not the duty of the defendant. I disagree with him. Under the circumstances of this case, which I have already stated, the burden is on Mr. Piercy, or on Mrs. Piercy, to show, that Mr. Bidwell understood that contract. That burden arises out of two or three circumstances.

First, that he was palpably an invalid, unable to attend to his business, lounging around day in and day out and amusing himself in Piercy’s greenhouses. Mr. Piercy knew that he had suffered a stroke of apoplexy, and he is chargeable with knowledge'—I must hold every man of intelligence chargeable with knowledge—of the fact that a man who has had a stroke of apoplexy is more or less affected in his mind. There is no question about that.

In the second place, by the answer, he was on terms of confidential relations with Piercy, and, in my judgment, it matters not whether it be a lawyer or a trustee or a mere agent, when one man is on confidential terms with another, and a transaction takes place between them that is questionable, the burden is on the man that occupies the confidential relation and has had the benefit of .the contract to sustain it. The burden may be greater or less. You cannot draw an exact line. But the burden was on Mr. Piercy.

In. the third place, when yon come to examine the paper itself, the burden is very strongly on Piercy to explain it.

' Now I come to the deed, and it is very evident that Mr. Piercy either took one of these maps with him, and I take it he took the larger one, which shows this jog that I tried to speak of awhile ago on lot 137, or that Mnmford had one already, and he also took the deed from Evarts to Bidwell of March 20th, 1895, which covered lot 137. That both the map and the deed were before the scrivener is beyond all per adventure. Now, that deed from Evarts to Bidwell is one of those given to readjust the partition after the change in the location of the street, which I have previously "mentioned, and it is peculiar. It conveys lot 137 and parts of lots 59 and 60, viz., seventy-eight feet of the rear of those lots, which are one hundred and three feet deep,’ leaving only twenty-five feet of them in depth from the front not covered thereby, and the description is by courses and distances. But the description does not show on any map. With this material the scrivener prepared the deed apparently in his own handwriting. The description is very minute, and he copied the whole of it from the deed from Evarts to Bidwell. I believe they compare exactly, except that Mr. Mnmford, in drawing the deed in question, omitted the points of the compass of the last course, which is of no consequence. And he refers to it, and he commences this way: “All those certain lots,” in the plural, “all those certain lots, pieces or parcel of land,” &c., “known and designated as lot 137 and parts of lots 59 and 60 in block No. 13 and 119 as laid down on a certain map filed July 5th, 1894. Map of the property belonging to the estate of A. G% Bidwell, deceased, situate in Jersey City, N. J., April, 1888, by Fowler & Yan Kuerin, surveyors,” &e., and “taken together described as follows,” that is, the lot 137 and the parts of lots 59 and 60 taken together described as follows.”—Now I believe that I am right in saying that that is just the way this reads—yes, precisely the same, taken exactly from the Evarts deed. It goes on and describes the lots by metes and bounds, and includes not only 137, but parts of lots 59 and 60, and the lots as described are shown by a diagram produced here by the defendant, and shown on the map hereto annexed, hut not on any other map. So that, besides including lot 137, it includes about three-fourths, a little more than three-fourths, of the rear of lots 59 and 60.

I will not stop here to say what the effect of such a bargain as that was, but I will stop to say that the reason why the deed from Evarts to Bidwell included the rear of lots 59 and 60 was explained on the stand bjr Dr. Bidwell, a brother of Henry Bidwell, to be that the necessity for it arose out of the readjustment of the streets. I will not go into it in detail, because it is of no consequence. But the remarkable tiring is that it did include more than three-fourths of the rear of lots 59 and 60. Now tire effect of that was to convey not only lot 137, but to destroy the value of lots 59 and 60, because it only left a few feet front of them, and it was the same thing almost as selling not only 137, but the whole of 59 and 60. I shall have a word to say about that later.

' Now after getting through with that description, precisely copying it word for word from the Evarts deed, Mr. Mumford continues: “Being the same lot,” not lots, but “the same lot.” If it. had been in the plural it would have been a different thing. “The same lot shown on a map of lots to be sold at public aucüon by E. S. Wolbert, auctioneer, on Wednesday, May 31st, 1900, as per plan hereto annexed.”

Now there is a plan annexed to that deed, and it was made undoubtedly, according- to tire handwriting, by Mr. Mumford, and he must have had before him a map when he made it, because it is not made to a scale, and there are no courses or distances or numbers on those four lots facing Jackson avenue, but the lot 137 is put down on the map with substantial accuracy, and the distances of each one of the five sides are given with great care, precisely as they are given on this large map—Wolberf s map I will call it.

Now that is a remarkable circumstance. No explanation was made by Mr. Piercy of that. He even went so far as to swear that he did not know whether that little slip was annexed to the deed when it was executed or not—I understood him to say—I clo not want to do him any injustice. Who put it there? The deed was delivered to Piercy. It has been in his possession ever since, until produced here in court by the defendant, and never seen, so far as appears, except on one occasion when what is called a mistake was discovered after Mr. BiclwelPs death, and it was then shown to these ladies. The map was evidently made by Mr. Mumford, as clearly appears by the circumstance that a little space is provided for the map—a space left in the body of the manuscript—where it is pasted on, and it was made for a purpose.

Now, why did Mr. Mumford make that, and what did he mean by inserting here, I repeat, “being the same lot shown on map of lots to be sold at public auction by F. S. Wolbert, as per plan hereto annexed.” What lot of the five shown on that little) map does he refer to ? There can be but one answer. It was not one of those little ones facing on Jackson avenue, because the description calls for Bidwell avenue alone as having any facing on it. The description fixes the beginning point at the SEune distance from Bidwell avenue that this little plot shows, and thence follows the bounds of lot 137, and the only difference is that the description as he wrote it in took in the rear of- these lots on Jackson avenue, which the little plot does not.

Now, it seems to me that tire fair inference from all that is that Mumford is not a conveyancer in the sense that he knew how -to plot lots, and no man is fit to convey—draw a deed—that does not know how to plot. Now, the poor man, in my judgment—and this is my inference—was called upon to prepare a conveyance of lot 137 and was given the Evarts deed; he read that description in it of a run of seventy-eight feet out of a hundred, I believe it is, out towards Jackson avenue, and then up the width and back again seventy-eight feet, and he did not know how to make a description of lot 137. He was not sufficiently versed in mathematics, in surveying, in plotting, for that purpose, so he copied the whole description from the Evarts deed and made and affixed a copy of lot 137,.and pasted it on to know which was intended. Now, he was not here, but I'.will venture to say that if he is asked he will say that is just the way it happened.

Now, then, that description does not say “lot 137” in so many words, but it says that very thing in effect by making a plot of it a part of the description and referring to the map.

Now, it is not necessary for me to determine the question, so learnedly and ably argued by counsel for defendant, whether if that stood alone, and we have to determine here to-day which of those discordant descriptions should prevail in an action of ejectment, for instance, at law. That is not the case here to-day. The question is, under the circumstances, which of those two discordant descriptions is to prevail; which one was what the parties meant; which one did Mr. Bidwell think he was making? And is it not perfectly fair to infer that he took this deed and this map which I have here before me, pointed out lot 137 to Mumford, and said, “That is the lot I want to convey; that is the lot that Mr. Piercy’s wife’s greenhouses are on, and here is my deed for it; this Evarts deed covers it; now you make up the description.” And Mr. Mumford undertook a task that he was not- equal to, and not being able to make a new description from the map, he says:

“X will make it plain; here is the lot that Mr. Bidwell has pointed out and that Mr Piercy has agreed to. I will make a little map of that lot and I will paste that on, and that will show what it was.”

Now, that is the inference, after my experience of about fifty years or more in this kind of thing, that I put upon the transaction, and that the real intention of the parties was to convey the small lot. That was what the only witness beside Mr. Piercy says she understood it was to be.

I will refer here to Mr. Yere. Mr. Yere, the acknowledging officer, who wras sworn here yesterday, prided himself, and I am glad to believe that he was entitled to pride himself, on being particular in such matters, and I asked him, “Now, Mr. Yere, if you had seen that map there, of course you would have shown that to Mrs. Bidwell.” But he also said she had read it over. Well, she could not read it over without seeing that map there, and she said she understood that lot shown on the map was what they were conveying, ánd if she had read the description in that deed she would have been just as much at loss as Mr. Mumford was, and I am not quite sure Mr. Bi'dwell would not be at the same loss as Mr. Mumford; but Mr. Yere could point out on the map, and could see what they wanted to convey, and she could see that little map, and Mr. Yere could see it and say, “That is what you are going to convey; there is a map of it.”

Now, Mr. Piercy swore there was a particular bargain between them. He swore to it and I will refer to that now.

Mr. Piercy swore that the bargain was that he was to have all the rear of those lots.,59 and 60 because there was a well on them, and that he got his water from the well there; that the water had been cut off by the city.- What did Mrs. Bidwell say about that? Why, that everybody in the neighborhood ran there to that well—it was an unfenced lot, and it would be very discourteous and unneighborly to prevent them, as long as they did not do any harm. And Piercy says, further—if there was any one thing more than another that affected my mind toward the conclusion of the whole thing, it comes right in there— that Mr. Bidwell told him:

“Now, I want you to have this land; $200 is .what it is assessed at; you have been very good and paid it all in $36 a year, and you have paid tor it all in rent, and you have been very good, and I want you to have the roar of these lots facing on Jackson avenue, because there is a well on them which you need; I want you to have the well; you have been a very good neighbor and I want you to have the well.”

That is what Piercy swears to. Take it as true, there was never any better evidence produced in a court of justice to show that Mr. Bidwell did not know what he was about. No man of any judgment, no man who still retained his. faculty, which I tried to describe to you awhile ago—“clearly to discern and discreetly to judge”—would ever have made any such bargain. The bargain on its face condemns itself.

Now, Dr. Bidwell swears, and he is not contradicted, that a fair value of-that forty-two-foot front lot (137) is $600. It rented for $36 a year, including the ten feet belonging to the other lot, and, taking that off, about $28 a year. It was appraised by the assessor at $200—probably an old appraisement. that lias been standing there for years and years—and it was appraised and taxed, with the greenhouses put in, and collected from somebody. I suppose that Mr. Piercy paid it; I hope he did. Then wc have these two lots on Jackson avenue. The question of what their value was was not asked, but it appears that J ackson avenue is an older avenue, probably, than Bidwell, and we observe that the lots near the corner are made to face on J ackson avenue rather than Bidwell. Here are two lots, twenty feet front each, actually ruined and to no advantage to anybody. Mr. Piercy or his wife could not -use them except to put a greenhouse on, without getting the consent of the owner on the street front, and the owner of the front could not do anything with them without getting the rear. To sell them in that way is a thing that no man in his senses would ever do; and when Mr. Piercy swore deliberately that the bar-gain between him and Mr. Bidwell was that he should have the rear of those lots, if what he swore to was true, he presented the strongest reason why the court ought to set the whole thing aside. No doubt Mr. Bidwell might have said—without meaning to say that I don’t believe Mr. Piercy'—you have got the benefit of the well; you can run there to the well until the lots are sold— spoke of it in that way because he had had that advantage for all these years.

And now I come to another piece of evidence, and it is this: That every one of the complainants who have been sworn swear they never heard of this conveyance of the rear of lots 59 and 60 until the young ladies, after their father’s death, came on from Washington and wished to ascertain what they owned, and they went to searching the records, and they find that deed, with the other plot, recorded; but when they come to read the deed over they find it covered more, viz., the rear of 59 and 60, and they went to the tax office for information, and when they got to the tax office they were sent to a map office. It appears that the tax department of Jersey City very properly keeps plots—maps of all the property—in what is called a map-room. They there found that the property conveyed to Piercy had been mapped, and they got a little plot, which showed them that the rears of 59 and 60 were included in this description—it is shown here, and Mr. Piercy had the same thing. They then went and talked with their stepmother about it, and she called on Mr. and Mrs. Piercy and called their attention to it, and Piercy brought his deed over to the Bidwell house, where they were out on the lawn in the rear of the house, and showed it to them. Now, here are four witnesses—Mrs. Bidwell, Miss Bidwell, Miss Boyd and the young man Alfred—all present, and they all swear that Piercy produced the deed and said, “Why, here is what I have got,” and showed them this lot 137 on this little plot annexed to the deed. Well, the complainant produced the other slip, which they got from the tax office, and said, “They say down at the tax office that the deed took in a large part of 59 and 60 in the rear;” and they all swore that he (Piercy) said, “That is a mistake down in the tax office, for here is my map, which shows what was conveyed for lot 137.” Now, they all unite in swearing to that, and what does Mr. Piercy say ? Why, he says that he told them that the mistake was in the map annexed to the deed—Mr. Mumford’s map—and the tax office map was right, and the mistake was in Mumford’s map. Well, to say nothing of there being four to one in swearing, I am sorry to say that Mr. Piercv’s own statement is slightly misleading because he had that deed in his possession all this time; had put it on record and taken it from the records; saw it when it was executed; saw it when he paid his money for it, and he knew what that map showed before the complainants came to him to know what the deed was for. And the effect of the evidence is to show that Mr. Piercy understood, just as Mrs. Bidwell did, that they were conveying lot 137, and no more. That is a question of veracity between them that I do not care to settle at all, except that the clear presumption is that Mr. Piercy understood all about that deed from the beginning to( the end, and understood that little map. -Now, if the map had been made on the deed itself it would not have been so striking, but it is made on a little piece of paper, about four by three inches, and it is pasted with gum on a place left for it, and it is a thing that you so seldom see that it was impossible for Mr. Piercy not to see, and I was very sorry to hear him say that he did not know whether it was there when the deed was made or not.

One other thing I will refer to. Mrs. Bidwell did not recollect that Mr. Yere came there to take the acknowledgment. She says Mr. Mumford brought the deed there at night. I have no doubt that is so—brought the deed there at night—and Yere came the next morning, according to his story, about ten or eleven o’clock, and that has escaped her mind. I do not believe Mrs. Bidwell intended to prevaricate; I certainly do not believe those four witnesess invented the story they told about Mr. Piercy.

Now, let us come to* the strength of the evidence as to Bid-well’s mental capacity at that time. Now, as I have remarked in the course of the production of the evidence yesterday, it depends on the character of the business a man is about to undertake requiring mental exercise as to whether he is equal to it or not. A child can do some things better than a man, and a man can do things that a child cannot. So a man, senile with old age, weak, unable to transact important business or do a day’s work, as the saying is, can attend to the ordinary affairs of life. He knows his errands, he knows what he needs, he can go to market, he can collect his interest and his rents. That is one grade of mental capacity. But of all the things and transactions that ordinary business men have to do—especially dealing in real estate, fixing a price on it—a thing that has no stated price—• fixing the value of it and what to take for it—there is where the highest mental capacity is required. Now, we have here a man dealing with a piece of real estate that required the highest degree of mental capacity. I do not mean as high a degree of mental capacity as though he had had a great deal larger piece to deal with, or if it was a more complicated transaction. I do not mean that, but of the grade, the kind, of business that requires the highest mental capacity, because here a mistake of $50 or $100 on $200 is as great, proportionately, as it would have been if the matter was $200,000.

Now, the doctors say that Mr. Bidwell suffered a very severe stroke of apoplexy; that it produced unconsciousness for a length of time, and when he was partially recovered that the man never did regain his mental faculties in full, and that he never was capable of reasoning and judging of any serious matter ; he never was able to keep a thought or an idea in his mind long enough to compare it with another idea—that is, judgment. His mind would wander from one thing to another. He would talk along with you and enjoy himself and all that, but when it came to any mental exercise as distinguished from mere mental abandon—taking things as the}1- came along—he was not able to do it—he was not able to endure any mental labor or exercise. That is their idea of the situation. I cross-examined them very carefully. I did not put it to the witnesses just as I did to Dr. McGill and to Dr. Evans in the Gollins Gase, but I cross-examined them as to his ability to exercise his mind and handle things in his mind—keep ideas there and think about them—and they were unanimous that he had not the ability to do so, and would fall into hysterics and cry. The moment you talked with him about business, or anything that required thought, he broke right. down. That was the effect of their evidence. Now, a man in that condition is simply unfit to do important business, particularly with regard to buying and selling real estate. And this is easily believed when we understand that he had suffered a severe stroke of apoplexy, and was also suffering from softening of the brain.

My conclusion from the evidence is that his mental capacity did not come up to the standard of Chief-Justice Kirkpatrick, which I applied in Kastell v. Hillman, 53 N. J. Eq. (8 Dick.) 49, and again in Thorp v. Smith, 63 N. J. Eq. (18 Dick.) 70 (at p. 92), and again in Collins v. Toppin, 65 N. J. Eq. (20 Dick.) 439. These last two cases were affirmed on'appeal (65 N. J. Eq.), and the chief-justice, in Thorp v. Smith, adopts the last part of my opinion, including the quotation from Chief-Justice Kirkpatrick, wherein he states the true standard of testamentary capacity to be the ability “clearly to discern and discreetly to judge of all those things and all those circumstances which enter into the nature of a rational, fair and just disposition of his property.” It is a familiar rule that a less degree of mental capacity is sufficient to sustain a testamentary disposition where the testator is not subjected to undue influence than is necessary to sustain an important business transaction involving the purchase and sale of landed property.

Now, what does Mr. Piercy swear? He swears that Mr. Bid-well wanted to sell this lot because he was hard up for money; that Bidwell told him he had been trying to sell some property. Now, Mrs. Bidwell says they were not hard up; they were not in straitened circumstances, and had no occasion to sell anything. I suppose he had sold out his business and got something from that. She denies that they were in want; that the sole object, as she understood it, was to relieve his mind from this idea that 'he was going to be taxed for the greenhouses; having these tax bills come in and having to run to Mr. Piercy and sajr, “Here, you must pay this bill." That was the only reason he wanted to sell.

He was hard up for money? Well, how much did he get? Two hundred dollars. That did not relieve him to any extent, but Mr. Piercy says he wanted to sell it to Mrs. Piercy because he felt under obligations to Mr. Piercy, and Mr. Piercy had been such a good friend, and all that sort of thing. Such a moving consideration is of itself, as it seems to me, evidence that he was influenced by improper motives.

Upon the whole, I am not satisfied that the man was in a competent state of mind to transact that particular piece of business, being, as he was, under the influence of Mr. Piercy day in and day out in his greenhouse, and treating Mm as a confidential friend. Therefore, I am of the opinion, in the absence of estoppel, that the whole transaction should be set aside.

As to estoppel, there is not the least evidence before me that any change in any respect has been made by Mrs. Piercy in her business or arrangements in consequence of this deed to set up an estoppel. She has not changed a building; she has not increased the value of any building; she has not spent a dollar on the property that she would' not have spent under the old lease; they have not taken possession or encroached on the rear of 59 and 60 one particle. They say they took possession; they say they have always been in possession. They were in possession of ten feet of the rear of the Jackson avenue lots, and. that possession remains, but they had never showed their hand to prove that they had the title to the rear of the lots, and I think it will harm no one by just reeonveying this property upon the payment of the $200.

I think there is no occasion for anything to be said about rent or interest. It is not. worth taking account of. Mrs. Piercy won't lose anything and the parties won't lose anything. They have lost the rent in the meantime, except the rent for the ten feet, but it is not necessary to take any account of that here.

You are entitled to a counsel fee if you ask for it.