text:
    Helen R. Ricketts v. John P. Tompkins et al.
    [Submitted January 21st, 1908.
    Decided January 22d, 1908.]
    After the death of defendant’s aunt there was found among her effects a paper signed by her, to the effect that ’she desired defendant to have all her property, but the paper was ineffectual as a will. Defendant procured a conveyance of certain real estate which had belonged to his aunt from her two surviving sisters, but afterwards, discovering that complainant, a child of a deceased sister of the aunt, had inherited an interest, he procured a conveyance from her. He testified that he told her that the aunt had left a will, but that it was of no value except to show her intention, and that the title company would not pass the title unless it was made good by her- signature. She testified that he told her that a will had been left to him, but that there was a slight technicality in the wording of the will which would necessitate her signature in order to- obtain title Insurance, Complainant executed the conveyance without receiving any consideration, and, though the property was valuable, defendant failed .to. disclose its value, and complainant had no knowledge of the value. — field, that complainant was entitled to a cancellation of the deed for fraud.
    On'bill, answer, replication and proofs.
    Tbe bill is filed to set aside a deed made by complainant to defendant April Í8tb, 1906, for an undivided interest in certain real estate at Atlantic City. The bill alleges that the deed was procured by defendant through fraudulent representations made by him to complainant for that purpose. Fraud is denied by the answer.

      Mr. Edmund G. Gaslcül, Jr., and Mr. Ulysses G. Styron, for the complainant.

      Messrs. Thompson & Cole, for the defendant John P. Tompkins.
   Beaming, Y. C.

Complainant and defendant are cousins. Their aunt had died intestate, leaving the real estate now in question, and defendant had procured a conveyance of the property from the two surviving sisters of the deceased aunt in the belief that the property had descended to them to the exclusion of children of their deceased brothers and sisters. After taking possession of the property and exercising exclusive control over it for some months he attempted to sell it and then ascertained that his ownership only included an undivided interest and that his cousins — children of the deceased brothers and sisters of his deceased aunt — were co-tenants with him. He then visited his several cousins, including complainant, to procure from them conveyances to him for their undivided interests. Complainant executed the deed as requested by defendant, without consideration, and now seeks to avoid the deed by reason of misrepresentations made to her by defendant. It appears that among the papers of the deceased aunt defendant had found a paper on which the following was written in pencil over her signature:

“I give and bequeath to my nephew John P. Tompkins all I have and possess of real estate and personal property or may hereafter acquire. Annie H. Roberts, May, 1903.”

■ This paper defendant had in his pocket, but did not-produce, at the time he induced complainant to execute the deed in question. His testimony is that he told complainant that-his aunt (Annie H. Roberts) had left a will,-but that it was not-properly drawn and was of no value, except to show her intention, and that the title company would not pass the title unless it was made good by the signature of the different heirs. On the other hand, complainant testifies that defendant’s statement to her was that the deceased aunt had “left a will to him,” and that there was a little technical term in the wording of the will, and he wanted her to sign a paper, as the title company would not insure the title without the signature of the heirs. Complainant also testified that defendant told her, or induced her to believe that the property was of little value; that it was heavily encumbered, and also said something about the mortgage on the property being foreclosed. Other cousins of defendant, who at the request of defendant, made about the same time, signed the same deed, have testified to representations made to them by defendant of substantially the same nature as shown by the testimony of complainant. To none of the cousins did defendant disclose that the property had any substantial value above the encumbrances, whereas he had, at that time, contracted to sell the property for-about ten thousand dollars above the amount of the encumbrances against it; and to none of the cousins did he exhibit the pencil writing, which he called a will, notwithstanding the fact that the paper was in his pocket.

With this evidence before me I am unable to doubt the truth of complainant’s statements. At the hearing I was impressed that she was stating truthfully her recollection of the conversation between her and defendant. The testimony of the other cousins, to whom similar representations were made by.defendant at about the same time and for the same purpose, operates to powerfully corroborate the testimony of complainant. Assuming the statements made by defendant to have been narrated by complainant with substantial accuracy there can be no doubt as to her right to the relief now sought. The difference between a representation to the effect that a title is held under a will and that the title so held has been found by a title company to be unmarketable by reason of technical defect in the will, and a representation that no valid will existed, is all the difference between truth and falsehood. In the former case, a possible heir would be asked to surrender a possible interest; in the latter case, a certain heir would be asked to surrender a certain interest.

But another aspect of the case should not be overlooked. Whatever the exact language used by defendant to complainant may have been, it is entirely manifest, even from the testimony of defendant, that he did not make to complainant a full and fair disclosure of all the material facts touching the property which were within his knowledge and which facts he knew were not within the knowledge of complainant. While she testifies that he gave her to understand that the property was of little value, he does not even claim that he disclosed to her the real value of the property. The paper referred to by him as a will he did not exhibit to her, notwithstanding the fact that the paper was in his pocket. The evidence convinces me that it was the defined purpose of defendant to disclose to complainant as little as possible by reason of the fear that a full disclosure would .defeat his plan to procure something for nothing. That his fears were well founded I entertain no doubt; for I am satisfied that had defendant made to complainant a full, fair and open statement of the facts within his knowledge touching the property and complainant’s real relations to it, complainant would not have conveyed her interest without compensation. In this view I think the case falls within that class of cases where it is the duty of a party having knowledge of material facts to discover them to the other party. While there was no pre-existing fiduciary relation between these parties, the transaction was of such a nature that a trust relationship was necessarily created by force of the very circumstances involved. The transaction was not one between vendor and purchaser. Defendant sought to procure a conveyance to himself of a valuable interest for nothing and to that end approached an owner who was his cousin and who did not know that she owned an interest and who knew nothing about the value of the property in question. Her knowledge was wholly dependent upon the information which defendant should communicate. By reason of her confidence in defendant’s integrity she acted upon the information thus communicated and made the conveyance without charge as requested. Under these conditions it seems entirely clear that defendant was charged with the duty of full disclosure, and that any failure upon his part to perform that duty which resulted, in loss to complainant is an. equitable ground for her relief. Tinder the circumstances of this case there can be no substantial difference between an affirmative misrepresentation of facts and an incomplete and inadequate statement of what purported to be, the -material facts. Complainant was, under the existing circumstances, entitled to know and to have been apprised by defendant that she was disposing of an interest of substantial value, and that what the defendant referred to as a will was, in fact, an instrument of no manner of force. These material facts were not disclosed by him, with the result that complainant signed the deed under a misapprehension of the facts, and defendant is clearly responsible for such misapprehension, and should not profit by it. In Torrey v. Buck, 2 N. J. Eq. (1 Cr. Ch.) 366, 380, the learned chancellor says: “It is this very holding back of information, which, in this case, created all the difficulty. A suppressio veri is as good a reason for setting aside a conveyance as a suggestio falsi.”

I will advise a decree setting aside the deed and a reference to a master for an accounting.


source: Caselaw Access Project

author: Garrison, Y. C.

license: Public Domain

text:
    Marie G. Kuerzi v. Henrietta Scott et al.
    [Decided February 11th, 1908.]
    A stipulation in a bond and mortgage to secure the payment of money borrowed as to the date when the interest on the money should begin to run was controlling, though the money was not paid .over to the borrower until a much later date, where the agreement for the loan was made- at'the'time stipulated,'and the whole of the'money was then held ready for the .use-of the.¡borrower. -. -: .- . . 1 .

      Heard on bill, answer, replication and proofs, in open court.

      Mr. William ÍL. 0-slorne, for the‘complainant. -

      Messrs. Traphagen & Beehman, for the defendants.
   Garrison, Y. C.

This is a suit to foreclose a mortgage given by Henrietta Scott and her husband to Marie G. Kuerzi. The bond and mortgage are dated March 20th, 1906, and call for interest at six per cent, from the 15th day of March, 1906. •

The only question that I find necessary to advert to in the decision relates to the matter of interest. It is the contention of the defendants, the mortgagors, that interest should not be calculated from the 15th day of March, 1906, the date which, in the bond and mortgage, is fixed as the time from which the interest is to be calculated. ■ ■ .

They base this contention upon the fact that the money, or the bulk of it, at least, was not actually paid over to them until a much later date, and this is true. .

Sufficient appears to show that the defendant Mrs. Scott, was purchasing a property from a third party, and desired to obtain from Mrs. Kuerzi $7,000 to pay on account of the purchase-money. She. made an agreement with Mrs. Scott .to obtain -this money some time in February or March, and the uncontradictedtestimony is that from that time, which-is fixed by the witness, as March 15th, 1906, the whole of the $7,000, at the request of the mortgagors, was held ready for their use subject to their call. Under these circumstances; 1 fine!" that 'the stipulation ’in the bond and mortgage as to the date of interest controls, and there is no reason in equity why the mortgagors should not be called upon to pay interest from the stipulated date.

An authority in point in the State of New York will'be found in Bevier v. Covell, 87 N. Y. 52.

I will advise a decree accordingly.


author: Howell, Y. O.

text:
    William W. Crane, trustee in bankruptcy, v. Joseph H. T. Brewer et al.
    [Submitted October 17th, 1907.
    Decided October 19th, 1907.]
    1. Where the ownership of a bank deposit was in dispute, and defendant, to substantiate her statements, offered a pass-book, all the leaves of which excepting one had been destroyed by her, and her name was written on the front cover and the remaining leaf below her deceased husband’s, through which a line was drawn, the evidence was discredited, where the only explanation given was that she destroyed the entries because she thought they would never be of further use to her, and where she made no attempt to examine the bank books and verify her statements.
    2. That a husband authorizes hig wife to draw upon his bank deposit does not show a gift to her, the act being consistent with his continued ownership of the deposit.
    3. Where, when defendant made a voluntary conveyance, he owed a debt, and was thereafter indebted on a running account, it was unnecessary, on a bill to set the conveyance aside,' to prove actual fraudulent intent merely because after the conveyance he had paid sufficient on the account to pay the amount due when the conveyance was made.
    4. Under the express terms of the Bankruptcy act of July 1st, 189S (30 Stat. 565 eh. 5J/1 § 7Oe; U. 'S. Oomp. St. 1901 p. 31¡51), a trustee in bankruptcy represents all the creditors of the bankrupt, and takes all his property and rights, and may institute such proceedings to avoid illegal transactions as any of them might.
    On final hearing on bill, answer, replication and proofs.

      Mr. Edwin B. Goodell, for the complainant.

      Mr. John J. Fallon, for the defendants.
   Howell, Y. O.

The bill in this case is filed to set aside a conveyance of lands upon the ground that it is voluntary and in fraud of creditors. The facts are these: In Februarjr, 1902, Gilbert T. Brewer purchased the land in question, paying therefor $12,500 in cash and taking the title thereto in his own name. He died intestate on June 17th, 1902, leaving two sons to whom the title descended, subject to the right of dower of his widow. On July 26th, 1902, his two sons joined in a conveyance of the land to their mother. At the time of this, conveyance ■ the defendant Joseph H. T. Brewer was in business in New York City, and was indebted on account thereof, among others, to Eubenstein Brothers, to whom he owed $888. He continued to trade with Eubenstein Brothers until 1906, and, although subsequently to the conveyance to his mother, he had paid on account from time to time sufficient moneys to liquidate the amount that he owed them at the time of the conveyance, he owed at the time of his bankruptcy a larger sum.

He was adjudicated a bankrupt in November, 1906. The complainant is his trustee and he files his bill in that capacity to set aside the conveyance to the mother.

The first defence insisted on is that the original purchase-money for the property in question was paid from an account in the Morton Trust Company of New York. This account, as is claimed by the defendants, originally stood in the name of G. T. Brewer, the husband, alone; it is asserted that about three years before the husband’s death he and his wife went to the banking-house of the Morton Trust Company to insert the wife’s name in the account so that either might draw the money, and that the account stood in this position clown to and after the death of the husband, at which time there remained on deposit $1,800 which the wife drew on her check after his death. The money that was drawn to pay for the land in question was drawn by a check which the wife did not sign. This is the evidence of the wife, whose title is now attacked, and I shall assume that the check was signed by the husband alone. She produces a pass-book issued by the trust company to substantiate her statements. Instead of aiding her, I think this exhibit casts suspicion on her whole statement. The book is mutilated almost beyond recognition. It consists of a leather cover on the outside of which is some printed matter showing that it was issued by the Morton Trust Company; all the leaves containing entries, excepting one, have been torn out and destroyed by the' defendant who- produced the book; the remaining leaf contains, first, the name of G. T.' Brewer through which an' ink line'has been drawn, and the name of-the wife; tíre same names and erasure appear on the front cover of the book. A book'mutilated by the person who produces it in court as the foundation of his rights always excites suspicion, unless satisfactorily explained. Here the only' explanation is that she destroyed the entries because she thought they would never be of further use to her. This, in my opinion, does not explain the matter at all. It would have been very easy to examine the books of the Morton Trust Company and have verified the statement. The fact that this was hot done converts the suspicion into an almost established fact.

But suppose that the entry in the books of the Morton Trust Company had been proved as alleged, then the result would have been that there was on deposit with the trust company a sum of money which originally belonged to the husband, but which could be drawn by either party. This alone would not be evidence of a gift to the wife. Skillman v. Wiegand, 54 N. J. Eq. (9 Dick.) 198; Taylor v. Coriell, 66 N. J. Eq. (21 Dick.) 262. The act of authorizing the wife to draw upon the fund is entirely consistent with the husband’s continued ownership of it.

I therefore conclude that the real estate in question was purchased by the husband with his own money; that it belonged to him, and upon his death his wife had no equity to claim title to it, and hence that she has failed to show a'resulting or other trust.

The second defence is that, although the bankrupt owed Ruben-stein $888 at thé time of the conveyance, yet that this had been fully paid, and hence it w'as necessary' to prove actual fraudulent intent in order to set aside the transaction. This view is, in my opinion,' erroneous.

The point arose in 1834 before Vice-Chancellor Shadwell in Whittington v. Jennings, 6 Sim. 493. In that case there was a voluntary transfer of a sum'of money át a time when the donor was indebted'on a running account. The donor afterwards made payment on this account exceeding in amount the balance due at the time of the voluntary conveyance. The balance, however, continually increased. The creditor took proceedings to set aside the voluntary conveyance, and the same defence was set up there as is now relied upon here. The defence was overruled and the conveyance set aside.

In Spuck v. Logan, 97 Md. 152; 54. Atl. Rep. 989, it was held that where there was a running account between buyer and seller, the buyer making payments from time to time but having a debit balance continually against him, the seller is a subsisting creditor in respect to fraudulent conveyances by the buyer. There the facts were these: The voluntary conveyance was made January 11th, 1898. On the 1st day of that month (January 1st, 1898) there was a balance from the previous year of $305 owing to the complainant. This amount was paid during the month of January, but an indebtedness of $383 was incurred, which was paid in February. The balances continued to increase until they amounted to $923. It was held that the complainant was a creditor in 1898 and continued such until the filing of the bill. The court says:

“There can be no doubt that whatever fraud was committed on January 11th, 1898, continued up to the execution of the deeds of December, 1900. The real ownership of these lots was in Spuck during all that time. * * * During the whole time that Deehring thus held Spuck’s property the fraud was as great as the day it was begun by the transfer of the property, in fact, it was probably more injurious, as other people were likely to be affected by it.”

In Paulk v. Cook, 39 Conn. 572, it was contended that the debts which existed at the time the conveyance attacked was made had been paid, with one exception, and that a voluntaiy conveyance could only be impeached by existing and not by subsequent creditors, and the court thus replied:

“This principle clearly has no application when there has been a continued unbroken indebtedness. The debts are owed though they may be due to new creditors. It is a most unsubstantial mode of paying a debt to contract another of equal amount. It is the merest fallacy to call such an act getting out of debt.”

That case extended the rule to creditors who had advanced the money to pay off the old debts, and such was the decision in Savage v. Murphy, 34 N. Y. 508 (1866).

In the case at bar the creditor is the same person to whom the money was originally owing, making a much stronger case than the two last cited; the debtor was never out of debt.

To the same effect is First National Bank of Asbury Park v. White, 60 N. J. Eq. (15 Dick.) 487, but reported at much greater length in 46 Atl. Pep. 1092. The question there related to an indebtedness by promissory notes at the time of the fraudulent act complained of, and it was insisted that the promissory notes then outstanding were paid by renewals. Vice-Chancellor Reed held, and his decree was sustained on appeal, that the indebtedness was continuously the same.

The trustee in bankruptcy represents all the creditors of the bankrupt and takes all his property and rights, and he may institute such proceedings to avoid illegal transactions as any of them might. Bankr. L. § 70e (1898).

The result is that the complainant will have a decree setting aside the transaction as one violative of the statute of frauds.


text:
    John L. Conover v. William A. Tansey.
    [Decided October 21st, 1907.]
    Neither a receiver nor a manager will be appointed to execute a farming contract on a bill by the owner of the land, though he charges the farmer with bad husbandry and with breaches of important covenants, where the farmer has answered the equity of the bill, where the owner delayed for months after an attempted rescission in asking relief, permitting the farmer in the meantime to put in and partially harvest crops, where there is no provision in the contract for rescission, forfeiture or re-entry for breach thereof, and where the inconveniences attending such appointment would be very great.

      On motion to appoint receiver, &c.

      Mr. Louis H. SchencTc, for the complainant.

      Mr. Joseph Reilly and Mr. Michael J. Tansey, for the defendant.
   Howell, Y. O.

The complainant applies for an order appointing a receiver to carry out the terms of a farming contract between him and the defendant, or, failing in that, to appoint a manager under whose supervision the work provided therein may be performed.

The contract relates to the working on shares of the complainant’s farm. It bears date March 10th, 1906, and runs for three years, from April 1st, 1906. It contains rather minute directions as to the duties of the parties and the manner of planting, harvesting and dividing the crops.

Within a few months after the agreement went into operation disputes arose between the parties, which have been carried to such a pitch as to break off all friendly relations between them. On one occasion they came to actual blows. The situation at least became so embarrassing to the complainant that on September 12th, 1906, he served a notice on the defendant, the object of which was to rescind the agreement on and after April 1st, 1907. The complainant now files his bill on August 23d, 1907, nearly five months after the attempted rescission, and after the crops of 1907 had been planted, and some part of the produce of the farm harvested and sold. He charges the defendant with bad husbandry and with having defrauded him out of his equal share of the crops in the division thereof. The charges of dereliction are numerous and constitute, if true, breaches of very important covenants of the agreement. He asks that the contract may be declared to have been rescinded in pursuance of his notice, and that the parties be restored to their original position; that the defendant may account for the excess of the farm produce received by him over and above that paid and delivered to him by the defendant, and that a receiver or manager may be appointed to supervise the conduct of the business done under the contract for the remainder of its term. There is also a prayer for an injunction which will be mentioned later.

The allegations of the complainant are answered by the defendant. He has filed a full answer and exhibited supporting affidavits, which are also very full, and which are intended to deny the complainant’s assertions in matters of fact. He claims to have performed the contract on his part, and makes counter-charges of breaches of material covenants contained therein by the complainant.

A careful reading of the affidavits leads me to the conclusion that the defendant has fully met the complainant’s- charges of fact — in other words, that he has answered the equity of the complainant’s bill, and that on the facts alone the complainant is not entitled to the preliminary relief which is the subject-matter of this motion.

There are, however, other reasons arising out of the situation which ought to be considered. In the first place, the long delay of the complainant in seeking relief is an important consideration, even if he could by any possibility be otherwise entitled to the relief prayed by his bill. His notice of rescission, so called, was given in September, 1906; it purported to rescind the contract on April 1st, 1907. If his right to rescind was clear and his notice effective to cancel the contract he should have proceeded immediately after the time fixed by himself for the ending of the contract to assert his right by appropriate action. This he failed to do. He waited nearly five months, and it appears by the statements of both parties that in the meantime the spring operations for 1907 had been begun and had been carried on by the defendant, as he claims, in pursuance of the contract; that the land was cultivated; the crops sowed and planted, and that in August, 1907, when he appealed to the court, some of the crops had been gathered, and other portions thereof were ready for harvesting; considerable money had been received by the defendant for sales of produce, and all this under the eye of the complainant, who resided on the farm and who has kept an account of all the discrepancies in the performance of the contract and in the distribution of the proceeds, as is shown by his own affidavit.

In the light of these admitted facts it would be unjust to take the conduct of this farm from the defendant and subject the fruits of his summer’s labor to be handled by a stranger, or his actions supervised by an officer of the court, who necessarily would be ignorant of the farming scheme.

Again, there is no provision in the contract for rescission or forfeiture or any right of re-entry reserved for breach of the agreement, or any of its covenants. The whole affair is a matter of covenant.

In a case decided by Lord Northington in 1162 (Rayner v. Stone, 2 Eden 128), in which an attempt was made to compel specific performance of the covenants of a farming lease, the lord-chancellor said: “I am sure I shall never consider what are called common covenants in a lease, as specific covenants to be subject to the jurisdiction of this court.” Cited by Judge Stirling in Phipps v. Jackson, 56 L. J. Ch. (N. S.) 550, also a landlord and tenant case. But it is urged that the relation of landlord and tenant does not exist here. This is probably true, yet the relation between the parties is conventional and lies in covenants which relate to husbandry.

The theory of the complainant’s case is not that the parties are landlord and tenant or partners generally, but that they are joint adventurers, and are tenants in common of the growing and gathered crops. Guest v. Opdyke, 31 N. J. Law (2 Vr.) 552; Warwick v. Stockton, 55 N. J. Eq. (10 Dick.) 61, and as such are subject to at least some of the rules which regulate partnerships; among which is the rule that equity will dissolve the relation of partnership in a case where the parties have lost all confidence in each other’s ability and honesty, and in consequence thereof there is likely to be a failure of the scheme of business operations and necessary loss to both parties. This rule is invoked by the complainant upon the ground that the relation between these parties is a quasi partnership.

I have not been able to find any authority for the action suggested by the complainant, nor has counsel furnished me with any precedent. I would not be willing to venture an opinion on the validity of such a course on the consideration of a preliminary motion.

Lastly, the inconveniences attending the appointment of a receiver or manager 'would be very great. The contract is still being carried on by the defendant. He has bound himself to do the farming work required by it, and his judgment as to the manner of doing it is an essential part of the plan. What could be the scope of the powers, duties and obligations of a receiver under such circumstances? Would he do the work or employ others to do it? Could he eject the defendant from the premises ? Is it certain that he could always agree with the complainant in the performance of any of his duties? Lord Northington, in the case cited, asks: “How can a master judge of repairs in husbandry? What is a proper ditch or fence in one place may not be so in another. It is said that this is an equitable right, and it is insisted that I should now put the plaintiff in a better state than what he can be at law, but the court has no jurisdiction to strip the defendant to try the supposed breach of contract at law; besides, how can a specific performance of things of this kind be- decreed? The nature of the thing shows the absurdity of drawing these questions from their proper trial and jurisdiction.”

To put the conduct of this business in charge of a receiver, a manager, or a master of this court, would be to substitute the judgment of a stranger for the judgment of the parties, and in case of dispute there would necessarily be appeals to the court for directions which would compel a- substitution of the court as ultimate manager of what is contended by the defendant to be a continuing contract.

The bill contains a prayer that the defendant be enjoined from using, selling, encumbering or disposing of the crops gathered and to be gathered, and from collecting or in anywise selling, or transferring the proceeds from the sale of apples which have been already shipped.

It is quite apparent from the foregoing discussion that the granting of this portion of the prayer would create a situation which would be very troublesome. In fact, it would practically prevent the defendant from performing the contract.

For these reasons I am compelled to deny the motion.


author: Howelu, Y. C.

text:
    Paul C. W. Sohege et al. v. The Singer Manufacturing Company et al.
    [Submitted October 15th, 1907.
    Decided November 19th, 1907.]
    1. A plea must reduce the issue between the parties to a single point, and, though the facts and circumstances may be voluminous, they must in the last analysis be reducible to a single issue, and a plea presenting two or more distinct issues or points must be held bad, and the defendant be put to his answer and full discovery.
    2. The court of chancery has jurisdiction of a bill by a citizen and a foreigner to have shares in a New Jersey corporation held by foreign residents awarded to complainants, and to have their names placed on the stock register.
    3. Where, on a bill by a citizen and a foreigner to have shares in a New Jersey corporation held by foreign residents awarded to complainants, and to have their names placed on the stock register, the court has enjoined transfer of the shares and appointed receivers of them, the foreign defendants may be brought in by substituted service.
    On bill and pica.
    On January ?th, 1879, Mrs. Isabelle E. Singer, a widow, and a resident of England, was the owner and holder in her own right of two thousand seven hundred and eighty-seven shares of the stock of the Singer Manufacturing Company, a corporation organized under the laws of this state. Being about to contract a second marriage with the Yicompte de Bloemendaal, otherwise known as the Due de Camposelice, she, on the above-named date entered into an antenuptial agreement with her future husband, and with Messrs. Palmer and Gould, as trustees, by which she transferred the said shares to Palmer and Gould upon the trust that they should pay the income of the shares to herself during her life for her separate use with remainder to her children, unless she should by will or deed make other appointment of the fund. The contract provided that a proper deed of settlement should be executed as soon as conveniently might be, and that “these presents shall, so far as practicable, in all respects be construed and take effect in accordance with the principles of English law.” On the following day, January 8th, 1879, Mrs. Singer was married to the Due de Camposelice. He died on September 1st, 1887. In the latter part of 1891, she, then the Duchess de Camposelice, contracted a marriage with Paul C. W. Sohege, one of the complainants, in the city of Paris, in .France, at which time she appears to have been living in that city. She previously had entered into an antenuptial contract with Sohege, which, it is assumed, was properly made under the authority and according to the forms of the French law. This agreement seems to exclude from its operation the above-mentioned two thousand seven hundred and eighty-seven shares of stock and to leave the custody and control thereof in the English trustees, but for the sole benefit of the wife and her children as theretofore. On February 10th, 1898, a deed of settlement was executed with relation to the said shares between Madam Sohege, the English trustees, and A. M. Singer, W. M. G-. Singer and Lewis Rendell, by virtue of which Messrs. Palmer and Gould were relieved from the trusteeship of the said shares and A. M. Singer, W. M. G. Singer and Lewis Rendell were appointed in their stead. This deed of settlement was made in pursuance of a power reserved to that end in the original antenuptial agreement with the Due de Camposelice and by way of execution of the formal deed of settlement provided for in that instrument. This agreement or deed of settlement does not appear to alter in anjr material matter the present use and ultimate destination of the shares. Madam Sohege yet had the income from the property during her life with remainder to her children, who will hereafter be designated as the Singer heirs. It was, however, again provided that this settlement deed should be construed and take effect in accordance with the principles of the English law. The bill alleges that between January 7th, 1879, the date of the first antenuptial agreement, and January 1st, 1901, the Singer Manufacturing Company, in addition to the substantial cash dividends' which it had periodically distributed among its shareholders, had accumulated a large surplus which, on the last-named day, amounted to twenty million dollars, and that on the last-named day it declared and paid a stock dividend of two hundred per cent, which was at that time distributed to its stockholders in the form of certificates for additional shares at the rate of two to one. In this distribution there was issued to the English trustees under the deed of settlement five thousand five hundred and seventj^-four additional shares in one certificate, which was duly delivered to them and now stands in their names as trustees on the books of the company. They continued to pay to Madam Sohege all the income derived from the original shares, and from these additional shares down to the date of her death, which occurred in France on May 12th, 1904. Madam Sohege, at her death, left her surviving her husband and her children by her first marriage, known as the Singer heirs; she also left a will by which she made her husband, in the words of the bill, “her universal legatee.” There is no copy of the will in the case, but it will be assumed that Madam Sohege by this instrument made her husband her residuary legatee, and that as such he became entitled on her death to such portion of her estate as she was free to dispose of by will.
    The complainants now claim that the stock dividend, declared by the Singer Manufacturing Company in January, 1901, should not have gone to the English trustees; that it belonged to Madam Sohege exclusively as income on her original shares, and was subject to disposition by her; that it was so disposed of by her marriage agreement with the complainant Sohege, in connection with certain sections of the French code, and especially by her will, and that she had thus transferred to the complainant Sohege, all her beneficial interest in these additional shares.
    Sohege later on made an assignment to the complainant Ryan, of a fractional interest in the shares, and they join as complainants in a bill which sets up the foregoing facts and prays, among other things, that the court will award these additional five thousand five hundred and seventy-four shares to them and remove the cloud of the trustees’ claim of title therefrom; that the company may be compelled to cancel the outstanding certificate therefor and issue a new certificate to the complainants; in short, that this court may put the title to and the possession of the said additional shares in the complainants and establish their ultimate right thereto. The bill also seeks the following provisional remedies — first, an injunction to restrain the Singer Manufacturing Company from permitting any transfer of these shares to be made, and second, the appointment of a receiver to have the custody of the shares and. the income thereof pending the suit. The defendants are the Singer Manufacturing Company, the English trustees and the Singer heirs. The bill was filed on December 11th, 1905. On the following day an order for an injunction was made by virtue of which a series of duplicate writs was issued, whose object was to restrain the defendant as prayed bjr the bill. These writs are in the following form:
    ‘•You and every of you do absolutely desist and refrain from assigning or transferring- or in anywise disposing of to any person, firm or corporation any certificate or certificates representing 5,574 shares of the capital stock of the defendant, the Singer Manufacturing Company, issued by said company to Adam Mortimer Singer, Washington Merritt Grant Singer and Lewis Rendell as trustees * * * or any of said shares represented by said certificate or certificates; and you, the Singer Manufacturing Company, your officers, directors, agents and attorneys from permitting the said 5,574 shares of the capital stock .of the Singer Manufacturing Company, issued by said company to Adam Mortimer Singer, Washington Merritt Grant Singer and Lewis Rendell as trustees, * # * or any of said shares represented by said certificate or certificates to be transferred or transferring the same on the books of the corporation otherwise than to the complainants herein.”
    The injunction was duly served on the Singer Manufacturing Company in this jurisdiction and on all the other defendants without the jurisdiction in the manner directed by the order-awarding the writ.
    On the same day, December 12th, 1905, this court appointed Douglas Alexander and Frank P. McDermott as receivers pendente Hie in the cause, with authority “to receive, take into their possession and hold until the further order of this court, and subject to such orders as it may from time to time make with regard thereto, five thousand five hundred and seventy-four shares of the capital stock of the defendant, the Singer Manufacturing Company, issued by said company to Adam Mortimer Singer, Washington Merritt Grant Singer and Lewis Rendell, as trustees, on or about the 1st day of January, 1901, * * * together with the dividends that have been declared on said five thousand five hundred and seventy-four shares of stock of the said Singer Manufacturing Company since the 12th day of May,' 1904, and which may hereafter be declared.”
    On December 13th, 1905, subpoena was issued against all the defendants, which was on the same day duly served on the Singer Manufacturing Company by the sheriff of Union county, who returned all the other defendants as residents of England and France, and an order for substituted service in accordance with the course and practice of the court was made against all the other defendants. This order required them to appear, plead, answer or demur to the complainants’ bill on or before May 2d, 1906. The Singer Manufacturing Company has answered. The English trustees and the Singer heirs have joined in a plea to the jurisdiction of the court. They set up the following facts, which they claim disentitles this court to entertain jurisdiction of the bill — first, that none of them is a resident or citizen of the State of New Jersey, that an order for publication of a notice of the suit was made, published and sent by mail to the defendants, and that no process to appear has been otherwise served upon them or any of them or upon any person authorized to appear in their behalf or in behalf of any of them, and second, that jurisdiction over the present controversy had been already acquired and exercised by the courts of England, and that these courts, to wdiose jurisdiction the construction and effect of the antenuptial agreement and the deed of settlement had been committed had already made a decree which had adjudicated against the rights now and here claimed by Sohege.

      Mr. Edward M. Colie and Mr. Louis Marshall' (of the New York bar), for the complainants.

      Mr. Richard V. LAnddbury, for the defendants.
   Howelu, Y. C.

On the argument it was claimed by the counsel for the complainants that the plea above set out was defective in form, and therefore bad, because it was affected by the vice of duplicity, that is to say, that it combined a plea to the jurisdiction with a plea in bar.

It is a primary rule in chancery pleading that a plea shall reduce the issue between the parties to a single point. The facts and circumstances may be various and voluminous, but they must, in the last analysis, be reducible to a single issue, and if a plea be so framed as to present two or more distinct issues or points, it must be held bad and the defendant be put to his answer and full discovery. Hence if a plea alleges non-residence, non-service and non-appearance, this, though various, is to but one point, and would be good in form and would eventually prevail if found to be true in fact. But it is argued on behalf of the complainant that if the pleader add to this the fact that the same cause of action had already been adjudicated between the same parties, and that a decree had passed for the defendant, that would introduce into the case a diverse issue which could not be heard with the issue of non-residence, non-service and non-appearance; that one part of the plea would go to the jurisdiction of the court over the parties and that the other would tacitly admit the jurisdiction, but would set up in bar of the further action of the court the fact of the former adjudication, or, in other words, that such latter plea would be a plea in bar joined to a plea to the jurisdiction, and the latter would operate as a waiver of the former. This plea, counsel say, presents such a double aspect and must, on that account, be overruled. The defendants say in reply that they did not set out the proceedings in the English suit and the decree thereon as a plea in bar, but only for the purpose of showing the court here that another court there had entertained the same suit and had decided it, and that for such reason alone this court could not take .jurisdiction. There is grave doubt about the soundness of the defendants’ position. If they are wrong, then the plea must be overruled, and they must be put to their answer. In consequence of the view which will hereafter be taken of this case it will not be necessary to decide the question so raised at this stage of the discussion; it is only necessary to say that if the document filed by the defendants as a plea is really chargeable with duplicity it must fall.

Let us, however, estimate this plea at the value placed upon it by the defendants and treat it as a mere plea to the jurisdiction, disregarding the portion of it which the complainants make question about. Then we have a citizen of France, and a citizen of this state, exhibiting a bill in this court praying that shares in a New Jersey corporation held by residents of foreign countries may be awarded to them and that their names may be placed on the stock register; these foreign defendants alleging that they are beyond the reach of the court and that no decree can be made, inasmuch as the court is withoixt jurisdiction as to them.

The question so raised by the defendants is not new to this court. It was decided in Andrews v. Guayaquil and Quito Railway Co., 69 N. J. Eq. (3 Robb.) 211. There Andrews brought suit to compel the transfer of shares of the Guayaquil and Quito Eailway Company, which he alleged should have been assigned to him as collateral security for certain notes made to one Pruyn, and by Pruyn endorsed over to him. The Ecuador Company was interested. It had become insolvent and its receiver was made a defendant. Both corporations were organized under the New Jersey law. The receiver of the Ecuador Company answered and filed his cross-bill against Pruyn for relief growing out of the same transaction. Pruyn pleaded non-residence, non-service and non-appearance. Yice-Chancellor Stevens overruled the plea on the ground that the res of the controversy was here; that the shares in suit had their situs in this state, and that any question relating to them could be determined here; that the suit was quasi in rein and that Pruyn was a necessary party. While the opinion does not expressly state that Pruyn could be brought in by substituted service, the implication that he could be is a necessary one. The vice-chancellor bases his decision on-the recent case of Jellenik v. Huron Copper Mining Co., 177 U. S. 1. If the rule were otherwise it is difficult to see how a large class of cases could be at all cognizable in our courts. Suits for the foreclosure of mortgages and other liens, for the partition of lands, for setting aside fraudulent conveyances of real estate situated here, and many other cases that might be instanced, to which non-residents are necessary parties, could not be justiciable in our courts. It was upon this principle that the English high court oí justice made its adjudication against the complainant Sohege, which is set out in the plea and upon which the defendants in this case rely. There the defendant was brought in by substituted service and the court made its decree upon the ground that the res of the controversy was within its jurisdiction. Indeed, if the defendant's contention were correct there are many cases of injustice which could not be heard at all, here or elsewhere, because of the impracticability of finding all the necessary parties in the same jurisdiction.

Defendants' counsel argued that in the Jellenih Case there would have been no jurisdiction except for the federal statute, and by analogy there could be no jurisdiction here because there is no special statute authorizing this court to take cognizance of this class of cases. The statute referred to in the Jellenih Case is not one which relates to the subject-matter of the suit; it merely provides for a method for serving notice on the defendant without the jurisdiction in cases in which the court already has jurisdiction of the subject-matter. This is manifestly the view of Vice-Chancellor Stevens in the Guayaquil Railway Case; he compares the federal statute with that of New Jersey relating to absent defendants and pronounces them to be substantially the same. The same kind of a statute came before the United States supreme court in Roller v. Holly, 176 U. S. 406. It is article 1230 of the Texas code and reads as follows:

“Where the defendant is absent from the state, or is a non-resident of the state, the clerk shall, upon the application of any party to the suit, his agent or attorney, address a notice to the defendant requiring him to appear and answer the plaintiff’s petition at the time and place of holding the court, naming such time and place.”

Then follow directions about what the notice shall contain. A subsequent section provides that:

“Where a defendant has been served with such notice he shall be required to appear and answer in the same manner and under the same penalties as if he had been personally served with a citation within this state.”

Concerning this statute, Mr. Justice Brown says: “It is true that there is no statute of Texas specially authorizing a suit against a non-resident to enforce an equitable lien for purchase-money, but article 1230 of the code of Texas contains a general provision for the institution of suits against absent and nonresident defendants, and lays down a method of procedure applicable to all such cases. Obviously this article has no application to suits in personam [citing cases]. The article must then be restricted to actions in rem, but to what class of actions, since none is mentioned specially in the article ? We are bound to give it some effect. We cannot treat it as wholly nugatory, and, as it is impossible to say that it contemplates a procedure in one class of cases and not in another, we think the only reasonable construction is to hold that it applies to all cases where under recognized principles of law suits may be instituted against nonresident defendants.”

But the complainants in the case at bar are in a much stronger position than was the complainant in the Guayaquil Railway Case.

It appears that the shares in suit are shares of a New Jersey corporation having a situs here for purposes of attachment or other seizure by courts of this state; they are in fact in such a situation as that the courts of this state may for many purposes obtain and hold control over them. It likewise appears by the record of the case that the transfer of these shares has been enjoined and that the court has gone even further than to merely restrain their transfer; it has appointed receivers to whose charge and custody it has committed the shares in question. In other words, the record shows that there has been a seizure of the res in controversy by the strong arm of the court which can only be. released by some act of the court efficient for that purpose.

The subject-matter of this suit is within the general equity powers of courts of chancery. If the necessary parties are present a decree may undoubtedly be made which will dispose of the controversy. One of the questions in this case is whether the seizure of the subject-matter of the litigation gives the court jurisdiction to dispose of the property which it has in its custody without personal service of process within the jurisdiction on the defendants holding the paper title. In other words, whether these necessary parties may be brought in by substituted service upon a seizure of the thing about which the controversy is.

Mr. Justice Field says, in Pennoyer v. Neff, 95 U. S. 714 (at p. 727) : “Substituted service by publication, or in any other authorized form, may be sufficient to inform parties of the object of proceedings taken where property is once brought under the control of the court by seizure or some equivalent act. The law assumes that property is always in the possession of its owner in person or by agent, and it proceeds upon the theory that its seizure will inform him not only that it is taken into the custody of the court, but that he must look to any proceedings authorized by law upon such seizure for its condemnation and sale. Such service may also be sufficient in eases where the object of the action is to reach and dispose of property in the state or some interest therein, by enforcing a contract or a lien respecting the same, or to partition it among different owners, or when the public is a party to condemn and appropriate it for a public purpose. In other words, such service may answer in all actions which are substantially proceedings in rem, but where the entire object of the action is to determine the personal rights and obligations of the defendants, that is where the suit is merely in personam, constructive service in this form upon a non-resident is ineffectual for any purpose.”

To the same effect is the statement of Mr. Justice Dixon in Wilson v. American Palace Car Co., 65 N. J. Eq. (20 Dick.) 734. He says: “No doubt when the object of a suit is to enforce a specific lien upon property of the defendant within the state, or when the court obtains control over such property, or when the status of a citizen of a state is the subject for adjudication, a state court may be authorized, after reasonable effort to notify the absent defendant, to enforce the claim of the plaintiff respecting such property or status. In such cases the court acquires a jurisdiction quasi in rem sufficient to support the limited judgment, but the jurisdiction must precede the adjudication; the judgment cannot be made valid by the fact that steps might be taken to enforce it.”

The argument of the complainants is that suits of the character of the one at bar are cognizable in chancery, that the filing of the bill placed the present subject-matter within the court’s cognizance; that thereupon, by virtue of its interlocutory and provisional process, it took actual possession of the thing in dispute whereby the power to adjudicate upon the dispute over the res of the controversy became complete.

In my opinion the authorities cited on behalf of the plea do not sustain the defendants’ position. Spurr v. Scoville, 3 Cush,. 578, was an equity proceeding against a non-resident to compel the specific performance of an agreement for the conveyance of lands situated in Massachusetts. It does not appear that at that time there was any Massachusetts statute which authorized substituted service of process on non-residents, in which particular the case differs from the cases herein above cited. If that distinction did not exist it must still be said that while that case is authority in Massachusetts, the weight of authority in other states is entirely against it. The cases are collected in 9 Rose Notes U. S. Rep. 343. The other case is Hart v. Sansom, 110 U. S. 151. It has generally been understood since the decision in Arndt v. Griggs, 134. U. S. 328, that Hart v. Sansom was not a case of universal application. In fact, the federal courts have gone so far in qualifying it and modifying its effect as that it may be almost said that the principle of the case has been overruled.

I therefore come to the conclusion that the plea must be overruled and the defendants put to their answer. If the plea is double this must be the result upon the purely technical grounds heretofore stated. The same result must follow from the views herein expressed as to the merits of the plea considered as a plea to the jurisdiction. A decree will be advised in accordance with these views. •


author: Howell, V. C.

text:
    John Shepard v. New Jersey Consolidated Water and Light Company.
    [Submitted December 19th, 1907.
    Decided December 26th, 1907.]
    1. On the foreclosure of a mortgage made by the Elberon Water and Light Company to the Colonial Trust Company as trustee, to secure an issue of bonds, sale was made subject to the prior lien of outstanding receivers’ certificates, and the complainant, who had become the holder and owner of all the certificates, filed his bill to foreclose the lien created by them, as against the New Jersey Consolidated Water and Light Company, which had been organized by the purchaser at such sale for the purpose of taking over the property, and against the Columbia Trust Company, the latter being made a party defendant for the-reason that it was a trustee of a new bond issue made by the New Jersey Consolidated Water and Light Company. The Colonial Trust Company, the trustee of the old bond issue, was not made a party. Pending the foreclosure suit a voluntary reorganization committee put out a plan for the reorganization of the mortgagor which contemplated a transfer to the committee of all the claims of all the creditors, to be used by the committee in the purchase of the property at the foreclosure sale and placing the plant in good condition. The petitioner having accepted this plan and transferred its claims to the committee and deposited its bonds with the Columbia Trust Company, applied to be made a party defendant in order to set up as a defence to the foreclosure proceedings of Shepard, the complainant, the allegation that he, as the holder of the receivers’ certificates had agreed with the re,organization committee that he would accept bonds of the new company under the modified plan of reorganization in lieu of the receivers’ certificates, and so defeat the present suit.— Held, upon examining the original and modified plans of reorganization, that the petitioner could not be admitted as a party defendant upon the following grounds urged in resistance of the motion in behalf of the complainant, viz., (1) because it appears by the moving papers that while the petitioner deposited its bonds under the plan of reorganization with the Columbia Trust Company, and agreed to accept bonds of the new company for the amount of its claim, as a matter of fact it has not so accepted the new bonds, and, therefore, cannot be said to be either the owner or holder of bonds of the old company, or of bonds of the new company; (2) that as a bondholder of the old company, if it is to occupy that position, it is represented by the Colonial Trust Company under the terms of the trust mortgage, and tha t its only remedy is to seek relief through the rights of the Colonial Trust Company, if any it has; (3) that it does not appear that there was ever any binding agreement made by Mr. Shepard, the complainant, to accept bonds of the new company in lien of the receivers’ certificates which he holds.
    2. But if all the foregoing questions could have been resolved in favor of the petitioner there remains an obstacle to this proceeding which it cannot overcome. For there is no such thing known to equity practice as the admission of a stranger to a pending suit, either as complainant or defendant, unless the complainant shall consent thereto, or there be a statute within the provisions of which he may bring his application.
    3. The only statutes which relate to the subject are sections 29 and 58 of the Chancery Practice act (P. L. 1902 p. 510), and they do not permit the petitioner to be admitted as a party to the pending suit.
    On petition of C. E. Hewitt & Company to be admitted as defendant.
    The petition is filed by C. E. Hewitt & Company praying to be admitted as a defendant in this suit, with leave to answer.
    The Elberon Water and Light Company made a mortgage to the Colonial Trust Company of New York, as trustee, to secure an issue of bonds. The company defaulted in its payments thereon, and suit was begun in this court to foreclose the mortgage. In that proceeding receivers were appointed. They had authority conferred upon them to finish the works, which were in an incomplete state, and to this end to borrow money on receivers’ certificates. This they did in the aggregate sum of $130,000. These certificates were made a first lien on all property of the company, and they are all now held by John Shepard, the complainant in this suit. Meanwhile the foreclosure suit went to a final decree, which was entered on December 12th, 1906, and under it the property was sold on March 23d, 1907. The sale was made subject to the prior lien of the receivers’ certificates on account of which there has never been any payment made. The property was purchased by Mr. Ludlow, and was shortly afterwards conveyed by him to a new corporation, the New Jersey Consolidated Water and Light Company, which had been organized for the purpose of taking over the property. Pending the foreclosure suit, a voluntary reorganization committee was made up, who on October 30th, 1906, put out a plan for reorganization of the company. It contemplated a transfer to the committee of all the claims of all the creditors, to be used by the committee in its discretion in the purchase of the property at the foreclosure sale, and placing the plant in good condition. The petitioner accepted this plan on December 12th, 1906, and about the same time transferred its claims to the committee and deposited its bonds with the Columbia Trust Company.
    The scheme of reorganization put out by the committee and contemplated by this plan included the acceptance by the holders of the receivers’ certificates of bonds of the reorganized company in lieu thereof — the statement in the plan being this:
    “The purchaser of more than two-thirds of the receivers’ certificates issued and outstanding has agreed with the committee to furnish sufficient funds to liquidate and pay the outstanding receivers’ certificates due December 1st, 1906, with interest thereon, together with the amount required to liquidate the indebtedness of the receivers connected with the increased work completed and contracted for amounting in the aggregate to about $130,000, and to accept on account of the amount so advanced bonds of the corporation to be issued as in this plan provided at 80 per cent, of their par value.”
    It does not appear whether tills agreement was in writing nor by whom it was made. The committee learned later on that the certificate holders refused to carry out this agreement, and on January 28th, 1907, they sent out to the creditors a modified plan of the reorganization, which was likewise accepted by the petitioner on February 28th, 1907. The petitioner’s claim was then liquidated at $14,000, to secure which it held $20,000 of the bonds of the Elberon company, which had already been deposited with the Columbia Trust Company. In the modified plan which was sent out by the committee occurs this notice:
    “All the receivers’ certificates authorized by the court aud mentioned in the plan have been sold; the money has been paid to the receivers and a part or all thereof disbursed by them. The purchasers of the receivers’ certificates, however, notwithstanding their agreement to exchange the same for bonds to be issued under the plan, have recently notified the committee that they will not make the exchange on the basis set forth in the plan, one of the grounds alleged being that the bonded issue should be materially reduced. While the holders of the receivers’ certificates, in the judgment of the committee, are responsible, an attempt to compel an exchange by such holders would involve long litigation, and would naturally interfere with the proposed reorganization. The holders of the certificates, however, have agreed to extend the time of payment from December 1st, 1906, to June 1st, 1907. And your committee, in conformity with the provisions of the plan heretofore submitted, recommends ‘certain modifications thereinafter mentioned”
    at the end of which occurs the following sentence: “Sufficient bonds are to be reserved by the company to be used in liquidating and paying the outstanding receivers’ certificates.”
    At the time the original organization plan was sent out the receivers of the Elberon company had issued certificates aggregating $90,000. On November 20th, 1906, they received authority to issue $40,000 more, and these were all issued before the modified plan was sent out.
    The sale of the property of the Elberon company, made in March, 1907, was made subject to the prior lien of the receivers’ certificates, then aggregating $130,000 of principal. By August 13th, 1907, the complainant herein, John Shepard, had become the holder and owner of all the certificates, and on that day he filed his bill in this court to foreclose the lien created by them as against the New Jersey Consolidated Water and Light Company and the Columbia Trust Company, the latter being made a party defendant for the reason that it is the trustee of a new bond issue made by the New Jersey Consolidated Company. The Colonial Trust Company is not a party.

      Mr. John Ch'iffin, for the petitioner.

      Mr. Robert H. McCarter, attorney-general, for the complainant.
   Howell, V. C.

The petitioner now applies to the court to be made a defendant in order that it may set up as a defence to Mr. Shepard’s foreclosure proceedings the allegation that he, as the holder of the receivers’ certificates, agreed with the reorganization committee that he would accept bonds of the new company under the modified plan of reorganization in lieu of the receivers’ certificates, and so defeat the present suit. The motion is resisted on the following grounds: First. Because it appears by the moving papers that, while the petitioner deposited its bonds under the plan of reorganization with the Columbia Trust Company, and agreed to accept bonds of the new company for the amount of its claim, as a matter of fact it has not so accepted the new bonds, and therefore cannot be said to be either the owner or holder of bonds of the old company, or of bonds of the new company. Second. That as a bondholder of the old company, if it is to occupy that position, it is represented by the Colonial Trust Company, under the terms of the trust mortgage, and that its only remedy is to seek relief through the rights of the Colonial Trust Company, if any it has. Third. That it does not appear that there was ever any binding agreement made by Mr. Shepard, the complainant, to accept bonds of the new company in lieu of the receivers’ certificates which he holds.

As to the first objection, I am obliged to find that the petitioner has placed itself in a somewhat equivocal position. It has deposited its bonds in pursuance of the plan of reorganization by which it agreed to take therefor bonds in the new company, but it says, in its petition (paragraph 10), that at the time it made its deposit of bonds and at the time of the sale of the property it was not aware of the fact that the holders of the receivers’ certificates would not accept the bonds of the new company, and that when it subsequently learned this fact it did not take from the Columbia Trust Company the bonds of the new company in lieu of its bonds of the old company. As to a portion of this statement the petitioner is mistaken. It is undoubtedly true that at the time of the issue of the first plan of reorganization it did not know that the holders of the receivers’ certificates would refuse to accept bonds in the new company; but it did learn it by the issue of the modified plan of January 28th, 1901, which was accepted by it under date of February 28th, 1901, a month'before the sale of the property was made; and when it says that after it learned of this fact of refusal it did not accept the bonds in the new company, I must find that this operates as a refusal to accept such bonds, and that it can now base no right of action or defence on bonds which it has refused to accept.

As to the second objection, namely, that the petitioner’s remedy is to be worked out through the Colonial Trust Company’s rights as trustee, it is sufficient to say that the Colonial Trust Company is not a party to this record, and that it would experience the same difficulty in being made a party as does the present petitioner.

As to the third objection, I find that there is not anywhere in the moving papers any statement that the certificate holders have executed any binding agreement to take the bonds of the new company in exchange for their certificates, except the extracts herein above made, from the plan of reorganization. While it very fully appears from the modified plan that the certificate holders had refused to make the exchange, that would be no defence to the present bill, unless the petitioner, or those with whom it was privy, had made an agreement which could be enforced. It would be futile for a defendant to allege an agreement which could not be proved because it never existed, and it would be quite as futile to allow a person who is not a party to the suit to come in and set up this defence unless he could show prima facie on his moving papers that such defence existed. Mutual Life Insurance Co. v. Schwab, 51 N. J. Eq. (6 Dick.) 204; Davis v. Sullivan, 33 N. J. Eq. (6 Stew.) 569.

Taking the plan and the modified plan together as one document, the only agreement on the part of the certificate holders therein stated is that they have agreed to extend the due day from December 1st, 1906, to June 1st, 1907.

But if all the foregoing questions could have been decided in favor of the petitioner there remains an obstacle to this proceeding which it cannot overcome. There is no such thing known to equity practice as the admission of a stranger as a party to a pending suit, either as complainant or defendant, unless the complainant shall consent thereto, or there be a statute within the provisions of which he may bring his application. 1 Dan. Ch. Pr. 287, noie 2. Chancellor Cooper has collected the cases on the subject in Stretch v. Stretch, 12 Tenn. Ch. 140 (1874), and it was declared to be the rule in this state, in Jones v. Winans, 20 N. J. Eq. (5 C. E. Gr.) 98 (1869). There the petitioner sought to be made a party defendant to a foreclosure suit; he had no judgment or other lien; he had only an award in an arbitration proceeding. The court held that he was not a necessary party, and that there was no authority or precedent for such an order as was asked for; that it was against the settled principles on which the practice of the court was founded; that there was no precedent for allowing anyone not a party to the suit to intervene by petition on his own motion to be made a party, except in cases like that of Melick v. Melick, 17 N. J. Eq. (2 C. E. Gr.) 156 (1864), where a cestui que trust was permitted to litigate in the name of his trustee, who was a defendant, but was in a position to have more interest or leaning in favor of the complainant than of his cestui que trust. This exception in favor of trust suits is very clearly stated in the opinion of Chancellor Cooper, above referred to. There are cases in which the application has been granted either with the consent of the complainant or where he did not object. But here the complainant objects, and unless the petitioner can exhibit a statute which permits it he cannot be admitted to the suit. The only statutes which relate to the subject are sections 29 and 58 of the Chancery Practice act. P. L. 1902 p. 510. These acts were passed in 1870, the year after Chancellor Zabriskie decided the case of Jones v. Winans, supra. P. L. 1870 p. 40. The twenty-ninth section provides for the admission to a pending suit of any person who should acquire such an interest in the subject-matter of the suit after the filing of the bill, as would have made him a proper or necessary party if such interest had been possessed by him at the time of the commencement of the suit, and prescribes a proceeding by petition. The fifty-eighth section relates to the admission to foreclosure suits of persons claiming under conveyances or liens,- the evidence of which is not recorded. This section, however, is so far from the question now under discussion that it may be disregarded. The scope of the twenty-ninth section was explained in Mutual Life Insurance Co. v. Schwab, 51 N. J. Eq. (6 Dick.) 204. There Vice-Chancellor Green says that this section does not contemplate the admission of a party as a defendant when the right which he seeks to set up is one that requires that he should by way of answer and cross-bill place himself in a position where he can be entitled to the relief asked for. Its design is to provide an easy and inexpensive method by which the person who succeeds to or acquires pendente lite an interest in the subject-matter of a suit may take the place of his predecessor under the issues existing in the suit and just in the state or condition in which those issues are when he comes in, but it is not its design to give him the right to raise new and different issues from those existing at the time he comes in. If his interest requires, and he wants to do that, he must proceed by an original bill, or an original bill in the nature of a supplemental bill. The simple remedy of application by petition under the statute is not available for that purpose. In that case the petitioner was driven to an original bill in the nature of a supplemental bill. Hare v. Headley, 52 N. J. Eq. (7 Dick.) 496. The scope of such a bill is defined in Mitf. Eq. Pl. 118.

There have been many cases since 1870 in which parties have been admitted- as defendants, but so far as I have been able to discover they are all proceedings under the statute of 1870, and I know of no other statute under which the application could be made. A few months after the passage of the act of 1870 the case of Linn v. Wheeler, 21 N. J. Eq. (6 C. E. Gr.) 281, was decided. An application similar in principle to the one now in hand was denied. In Esterbrook v. Ahern, 31 N. J. Eq. (4 Stew.) 3, the petition was dismissed and the applicant driven to filing an original bill. In Hewitt v. Montclair Railway, 25 N. J. Eq. (10 C. E. Gr.) 100, the applicant was admitted by force of the statute, but was not permitted to answer and thus raise new issues. In all the cases, only a few of which are here cited, the court has striven to maintain the integrity of the issues raised by the original pleadings and to keep the newly-admitted parties within the scope of the original suit. The views herein above expressed do not in any way militate against the inveterate rule which permits the court to refuse to proceed for manifest want of parties. If at any stage of a cause there appears to be a lack of parties the court will order it to stand over until the complainant shall have had an opportunity to bring them in, and if he does not comply with the suggestion of the court he stands under the liability of a dismissal. Van Keuren v. McLaughlin, 21 N. J. Eq. (6 C. E. Gr.) 163; reversed on another point, 21 N. J. Eq. (6 C. E. Gr.) 379. This practice, however, has no-relation to a motion by a total stranger to the record for leave to-come in with a demand that may require a hearing on issues outside of those made between the original parties. In the case of Iauch v. de Socarras, 56 N. J. Eq. (11 Dick.) 525 (1898), Vice-Chancellor Pitney declined to permit a judgment creditor who had not been made a party to the suit to be admitted as a party to a creditor's bill, on the complainant’s consent, and against the defendant’s objection. The case contains a collection of all the authorities. The result is that the application must be denied.


text:
    Simon Sternberger et al. v. John L. Young et al.
    [Submitted January 3d, 1908.
    Decided January 9th, 1908.]
    1. In a case in which an agent, authorized to sell real estate at a certain price, conspires with the purchaser to procure the principal to accept a less price in consideration of a large benefit to be derived therefrom by the agent, the transaction cannot stand in a court of equity. This court will not lend its aid to the enforcement of an agreement of such a character, but will dismiss a bill brought for that purpose.
    2. The whole transaction is voidable at the option of the defrauded owner. .
    3. Where, however, a broker is employed to sell, and is not invested with any discretion, or his employer does not rely upon the benefit of the broker’s skill or judgment, there the broker is a mere middleman who is employed for the purpose of bringing the two principals together, and in such case he may recover commissions from both.
    On final hearing on bill, answer, replication and proofs.
    The bill in this case is hied by the complainants for an accounting. The facts are that the complainants, in 1890, were engaged in the business of real estate agents in the city of Atlantic City, and that they had on their books for sale a tract of land in that city owned by a man named John W. Wright, who at the time of the transaction herein mentioned was temporarily residing in Colorado Springs, in the State of Colorado, on account of illness.
    It appears by the bill and by the testimony that the complainants had been authorized by Mr. Wright, the owner, to make sale of the lands for $30,000, and, as Solomon Sternberger says, they had it on their books at $30,000. The complainants called the attention of the defendant John L. Young, to this tract of land. Mr. Young asked how much they wanted for the property. Mr. Solomon Sternberger said $30,000, and at the same time told Mr. Young there were several people, four or five, after it, and that it had to be sold quickly, as the owner was very low in health in Colorado Springs. Mr. Young stated that if he could buy the property for $25,000 he would take it, and Mr. Solomon Sternberger inquired if Mr. Young got the property for $25,000 “what would he get,” and it was then and there agreed that Mr. Young should pay to Sternberger Brothers two per cent, commission on all the sales and five per cent, commission on all the rents. This being agreed to, the complainants telegraphed to Mr. Wright making the offer of $25,000 for the land. Mr. Wright replied, accepting the offer, and within a week or ten days thereafter he died. Some months later the title was conveyed by representatives of Mr. Wright to the defendants Young and McShea, and the complainants were paid a commission by the grantor for making and consummating the sale. About a year later, and on April 1st, 1891, an agreement was executed between the complainants and the defendants in pursuance of the oral arrangement entered into before the telegram was sent to Mr. Wright at Colorado Springs, by which Young and McShea agreed to pay Sternberger Brothers two per cent, commission on all sales out of the tract, whether such sales were made by the complainants as agents or not, and also five per cent, commission on all the rents collected from the tenants of the property. Within the next twelve years the property was ■ sold in parcels for sums aggregating $162,800. The bill is filed to recover two per cent, commissions on that amount and five per cent, commissions on all the rents received by the defendants in the meantime.

      Mr. William I. Garrison, for the complainants.

      Mr. Clarence L. Cole, for the defendants.
   Howell, V. C.

The bill in this ease must be dismissed upon the ground that this court will not lend its aid to the enforcement of an agreement of the character above set out. One of the primary rules attending a litigation in this court requires the complainant to come to the court with clean hands.

The bill alleges that the complainants, about the 1st of January, 1890, were commissioned by John W. Wright to make sale of the tract of land in question; that the lands and premises were worth much in excess of the sum of $25,000, and. that at that price there were several persons seeking to purchase the land, among whom were the defendants, and that the complainants, acting as the agents for the then owner of the said land and premises, and of the defendants, consummated a sale of the premises to the defendants for $25,000 on or about March 20th, 1890; that at the time of the sale the complainants favored the defendants and secured the premises for them at a small purchase price, and that it was thereupon agreed between the complainants and defendants that the complainants should act as the exclusive agents for the defendants in the collection of rents from the said premises, and in the sale of same, for the compensation above mentioned, which agreement was afterwards, on April 1st, 1891, reduced to writing.

The testimony taken on the final hearing sustains this allegation, but adds to it that the complainants had it on their books at $30,000, and the further statement that they refused to communicate the $25,000 offer to Mr. Wright until they had secured from the defendants an agreement by which they were to receive the commissions as above stated.' This, therefore, is a case in which an agent, authorized to sell real estate at a certain price, conspires with the purchaser to procure the principal to accept a less price in consideration of a large benefit to be derived therefrom by the agent. Such a transaction cannot stand in a court of equity. The whole transaction is voidable at the option of the defrauded owner. Condit v. Blackwell, 22 N. J. Eq. (7 C. E. Gr.) 481; Young v. Hughes, 32 N. J. Eq. (5 Stew.) 372; Henninger v. Heald, 52 N. J. Eq. (7 Dick.) 431; Howard v. Murphy, 70 N. J. Law (41 Vr.) 141; Panama Company v. India Rubber Co., L. R. 10 Ch. App. 515; 45 L. J. Ch. 121; Grant v. Gold Exploration Co., 1 Q. B. 233 (1900); 69 L. J. Q. B. 150; Hughes v. Washington, 72 Ill. 84.

There is a class of cases to which this rule does not apply in all its strictness. Where a broker is employed to sell, and is not invested with any discretion, or his employer does not rely upon the benefit of his skill or judgment, there the broker is a mere middleman who is employed for the purpose of bringing the two principals together, and in such case he may recover commissions from both. Knauss v. G. Krueger Brewing Co., 142 N. Y. 70; McLure v. Luke, 154 Fed. Rep. 647.

That, however, is not the case here. The complainants were the agents of an owner who was almost at the point of death at the time of the transaction. They say that it was his desire to close out his ownership in the land at once in anticipation of his impending fate. It was undoubtedly his desire to obtain as large a price as possible for the property, and he was entitled, under the circumstances, to the benefit of the honest, disinterested and independent advice of the men whom he had entrusted with the sale. The transaction cannot stand. No court would sully its hands by upholding any claim for compensation under these circumstances.

The rule which denies compensation to the agent in these circumstances reaches to every collateral contract growing out of the transaction, and infects every branch of it with what the courts have denominated constructive fraud. It extends to the contract now sought to be enforced, for the reason that the defendants are quite as guilty as the complainants. They had no right, either at law or in equity, to tamper with the agent from whom they were purchasing. They had no right to make him also their agent in the premises without the knowledge and full concurrence of Mr. Wright, or his representatives after his death. They had no right to connive at placing him in a situation in which he would be tempted to neglect or violate his duty to his principal.

Hence, at the outset-the complainants meet an obstacle which cannot be overthrown, and renders an investigation into the merits of the case impossible. The parties are in pari delicto, and as to the complainants, it must be said that “he that hath committed iniquity shall not have equity.”


author: Howell, Y. C.

text:
    John Castree et al. v. Emily B. Shotwell et al.
    [Submitted January 8th, 1908.
    Decided January 18th, 1908.]
    Testator’s will provided that a share of his estate should be held in trust for a daughter, a married woman, to “her sole and separate use” during her life, so that she might enjoy the net income free from the control of any husband, that she should have power to dispose of the principal fund by will, and that, in default of such will, it should go to her heirs. — Held, that neither the principal nor the income of the fund could be subjected to the claim of her attorneys for services in advising her in relation to the management of the fund, the fund being in possession of the court, and neither the principal nor income being a “separate estate,” but the will having created a mere spendthrift trust.
    On petition.

      Messrs. Edward Q. Keasbey and George M. Keasbey, pro se.

      Mr. Burton L. B. Hare and Mr. Frederic M. P. Pearse, for the respondents.
   Howell, Y. C.

A petition is filed in this case seeking to charge Mrs. Pinckney’s interest in a fund which is under the control of the court with certain solicitors’ fees and costs incurred in the management ■of her interest, to the petitioners, who are solicitors and counselors of this court.

The will of John Shotwell made the following provision for his daughter, Mrs. Pinckney:

“My executors shall cause at least half of her share in my estate to be safely placed and settled in the hands of suitable and discreet trustees upon trust to her sole and separate use during her life, in such manner that she shall enjoy the net income thereof as it shall accrue, free from the control of any husband, and shall also have power to dispose of the principal fund or property by will, and so that in default of such will the same shall go to and belong to her heirs or next of kin.”

The fund in question came under the control of the court in the above-entitled cause, and the income of the portion of the ■estate to which Mrs. Pinckney is entitled is paid to her from time to time by direction of the court.

Mrs. Pinckney long ago employed the petitioners to aid and advise her in relation to the care and management of the trust fund, and incurred a liability to them of several hundred dollars. The justice of the claim as an indebtedness of Mrs. Pinckney is almost without dispute; not only were the services rendered as charged, but the amount demanded is reasonable and fair, and I shall assume for the purpose of the decision of this matter that Mrs. Pinckney is indebted to the petitioners in the amount set ■out in their petition.

The petition prays that the court will order the amount of the indebtedness paid to them out of either the capital or income of the fund which is being administered by the court for Mrs. Pinckney’s benefit, upon the ground that the fund is one which is set apart for Mrs. Pinckney’s “separate use,” and that it is therefore under the control of the court by virtue of well-settled equitable rules. In other words, that it is her “separate estate,” using the words in their technical sense, and is so subject to be ■charged by the court in a proper case with debts contracted by ■her for the benefit of her separate estate. In my opinion no such charge can be made against the principal of the fund, inasmuch as the respondent has no possible interest in it. She may lend her aid to guard it and protect it and to watch its investment, for out of it comes her income for the period of her life; she has a power of appointment over it, but this is a mere naked power which she may exercise or not, as she pleases. If she does not exercise it there is a devise over to her heirs or next of kin.

Manifestly the capital of the fund is in no sense the separate estate of the respondent. The fund itself is in the actual possession of the court. Mrs. Pinckney has no interest or estate in it, nor any control over it beyond such supervision as may be allowed by the court; she cannot alienate or charge it for her own benefit, nor in any way obtain for her own use a cent of it. I shall therefore dismiss the claim as to that portion of the fund without further comment.

But it is next said that if the capital of the fund may not be reached, the income may be, and that the next installment thereof may be charged with Mrs. Pinckney’s indebtedness to' her solicitors, and so much thereof as may be necessary may be taken from her to liquidate their claim. This insistment leads to an examination into the nature of the bequest made in the respondent’s favor by the will of her father. The provision is that the trustees shall take the legal title to the fund and pay to her the net income thereof as it shall accrue during her life. This, in my opinion, is what is popularly known as a spendthrift trust, and resembles in all its features that class of cases of which Blair v. Hardenburgh, 30 N. J. Eq. (3 Stew.) 645, is a familiar example. The income is not property of which the beneficiary before the due day can have either the-possession or control, nor of which she can be seized, nor of which she can make present disposition and delivery; until it shall have accrued it is not in esse; it is in the last analysis a mere provision for maintenance and support.

It is true that the will provides that the income shall be for her sole and separate use, and be free from the control of her husband; these are proper and apt words for the creation of a-“separate use,” but, in my view, they add nothing to her right to receive and dispose of the income; they do not create an es~ tate in property. If these words were absent from the will her right to the income would be the same, and they are therefore mere surplusage. See v. Zabriskie, 28 N. J. Eq. (1 Stew.) 422

Prior to the passage of the Married Woman’s act of 1852, real and personal property of married women were subject at law to certain common law incidents and disabilities. As to her real estate, the husband had the right of possession during the joint lives of himself and the wife, and he had curtesy, in a proper case, after her death. Her identity being merged in his, Riere remained in her nothing but the bare legal title; all the rest was the husband’s. As to personal estate, that became the property of the husband immediately, the marriage operating as a transfer. But the court of chancery, as a court of equity, recognized very early in its history the doctrine of separate estate or separate use by a married woman in property which was devoted to such use by the instrument which created the title in her.

The doctrine is thus summed up by Lord Langdale, M. R., in Tullett v. Armstrong, 1 Bev. 21 (1838). Pie says:

"In this court a married woman has, for more than a century, been considered as capable of possessing property to her own use independently of her husband; such property is called her separate estate, and, in respect of it, she is considered as a feme sole enjoying, and capable of exercising, her rights as such. The property may be acquired either by contract with the husband before the marriage, or by gift from him, or from any stranger wholly independent of such contract; so far as his legal rights as husband may interfere, the court will treat him as a trustee; and property held by or for the wife to her separate use, if unaccompanied by any restraint, is subject to her power of alienation, and the other incidents of property held by men or single women. * * * Property given to a woman for her separate use, independent of any husband, may, under the authority of this court, be enjoyed by her during her coverture, as her separate estate, although the property originally, or at any subsequent period or periods of time, became vested in her when discovert. In respect of such separate estate, she is by this court considered as a feme sole, although covert. Her faculties as such, and the nature and extent of them, are to be collected from the terms in which the gift is made to her, and will be supported -by this court for her protection. The words ‘independent of a husband/ whether express or implied in the terms of a gift, mean no more than that this court will not permit the marital power of the husband to be used in contravention of the enjoyment of the property, according to the terms of the gift. If the gift be made for her sole and separate use, without more, she has during the coverture an alienable estate independent of her husband. If the gift be made for her sole and separate use, without power to alienate, she has during coverture the present enjoyment of an unalienable estate, independent of her husband. In either of these cases she has, when discovert, a power of alienation; the restraint is annexed to the separate estate only, and the separate estate has its existence only during coverture.” Cited as authority by Vice-Chancellor Grey in Bristol v. Skerry, 64 N. J. Eq. (19 Dick.) 626.

Such a separate estate, or an estate to the separate use of the wife, is one which must necessarily be created by the use of the technical words used in this will, or other words of similar import. Their. absence would be fatal to the estate in contemplation. 6 Pom. Eq. Jur. § 1162, and notes. An estate of this character is one of which the married woman may be either legally or equitably seized. She may have it conferred upon her by a conveyance or devise to her directly, or a trustee may hold the legal title for her, but in either case the instrument under which she holds must express the idea of separateness by the use of apt words for the purpose, else the marital right of the husband attaches.

The idea of separate estate or separate use in addition to seizin (legal or equitable) includes the right of management, use and control free from the interference of the husband; it also includes the right of alienation and anticipation, and the estate may be charged in equity with the payment of debts contracted by the wife for the benefit of the estate so held by her. Emery v. Van Syckel, 17 N. J. Eq. (2 C. E. Gr.) 564 (1867).

These qualities cannot be attributed to an income from a fund held by trustees and administered by the court, which accrues periodically, and which must be used as it accrues for the support of the beneficiary. Such a provision can have none of the characteristics peculiar to the infinitely larger right which is being considered. The latter is an estate in fact; the former can have no such wide significance.

All the cases cited in the brief submitted on behalf of the petitioners, and all the cases which I have examined relating to the separate estates of married women, are cases in which the married woman was seized and possessed of or entitled to an estate, either legal or equitable, in the property in dispute. There exists, necessarity, and in the nature of the thing, a wide difference between a spendthrift trust and a separate use. They are derived by entirely different methods and proceed upon entirely different principles.

The several married woman’s acts which have been passed in this state have not distinguished between property subject to its common law incidents and property held under the equitable tenure of separate use. These acts, which are held to have affected the estate of the wife, and not that of the husband (Prall v. Smith, 31 N. J. Law (2 Vr.) 244, declare that the real and personal property of a married woman which she owned before or at the time of her marriage, or which she acquired subsequently thereto, and the income thereof, and all her wages and earnings, shall be her sole and separate property as if she were a single woman, and she is made liable at law for her debts as if she were a feme sole. The income from a trust fund was held by Chancellor Eunyon, sitting as ordinary in the case of See v. Zabriskie, 28 N. J. Eq. (1 Stew.) 422 (1877), to be secured to the married woman, who was the cesttii que trust, by the married woman’s acts; and this without regard to the question whether the income was specifically stated to be fox the separate use of the married woman or not.

In Perkins v. Elliott, 23 N. J. Eq. (8 C. E. Gr.) 526 (1872), the court of errors and appeals, speaking by Chief-Justice Beasle3r, holds that the entire effect of the act for better securing the property of married women is to create in favor of the married woman that kind of estate which would result if the same statutory words had been inserted in the deed or will under which, the married woman took title to the lands; that the words for the creation of a separate use are technical, have been long in use, and that their meaning and legal effect has been fully established; that they should have the same force whether found in a private instrument or in a public statute, and that the purpose of the law is entirely effectuated by putting in the wife that title to her property which is so well known to equity under the designation of her separate estate; and that it would certainly seem to be greatly incongruous to have two rules of construction appertaining to the same language, one to be applied to estates limited by settlement, and the other to estates arising by force of the same terms under the statutory provision.

And the same remedies apply to the statutory estate as formerly applied to the equitable estate. Armstrong v. Ross, 20 N. J. Eq. (5 C. E. Gr.) 109.

It will be seen, therefore, from this exposition of the nature of a married woman’s equitable or statutory estate held for her separate use, that it differs quite materially from the situation disclosed in this case; that there is no analogy between such an estate and an income derived from a fund set apart for mere maintenance and support; that while this court might charge the estate of a married woman which is set apart for her separate use with debts contracted by her for the benefit of her separate estate, there is no method by which the court can reach the' income derived from a spendthrift trust or a trust for mere maintenance and support out of the income of the trust fund.

In tills case the income is appropriated to the use of the wife as it accrues, and it is true that without regard to the statute it would be subject to her use and disposal, but it is not an estate which this court can encumber, nor of which anyone can deprive her. If the petitioners should recover a judgment at law on their claim they would be unable to enforce payment out of either the principal or income of the fund in question; - and I must therefore conclude that, while the claim appears to be a just one, there seems to me to be no remedy for the petitioners in this court.