author: Garrison, J.

text:
    The Commercial Union Assurance Company (Limited), appellant, v. The New Jersey Rubber Company, respondent.
    [Filed March 3d, 1902.]
    1. The complainant, an insurance company, and the defendant, a manufacturing corporation, entered into an agreement by which the complainant was to issue its policy of insurance upon the defendant’s plant and the defendant was to procure other concurrent insurance so distributed that the complainant, under its policy, should be liable for a proportionate part only upon any given item of loss. The complainant issued its'policy and the defendant failed to procure such concurrent and proportionate insurance. After the occurrence of a fire loss the complainant tendered to the defendant the proportionate part of such loss for which it would have been liable under its agreement with the defendant, at the same time canceling its policy and returning the unearned premium. An action at law on the policy was then brought by the defendant, to enjoin which and for equitable relief the complainant filed , its original bill. The action at law was permitted to proceed to judgment, which was that, by the cancellation of its policy, the complainant had recognized its validity..—Held, upon a demurrer to a supplemental bill, that this adjudication did not make the complainant’s liability on its policy res judicata, so as to prevent the court of equity from entertaining its bill for relief.
    2. Held, also, that where a matter in pais has acquired a fixed import at law, but may have an opposite significance in equity, a judgment according to such matter, in its strictly legal consequences, will not control the effect to be given to it by a court of equity.
    On. appeal from an order sustaining a demurrer advised by Vice-Chancellor Emery, whose opinion is reported in 16 Dick. Ch. Rep. 446.

      Mr. Richard V. Lindabury, for the appellant.
    Mr. Richard S. Kuhl and Mr. John Rellstab, for the respondent
   The opinion of the court was delivered by

Garrison, J.

This appeal presents a question of res judicata raised by a demurrer to a supplemental bill. The original bill, which was filed to enjoin an action at law and for equitable relief, was arrested pending the action at law, which resulted in an adjudication, which, when exhibited to the court of chancery by a supplemental bill, was, upon demurrer, deemed to have disposed, conclusively of the case made by the complainant under the doctrine of res judicata. The propriety of this order is the subject of the complainant’s appeal, upon which cognizance will be taken of those facts that are established by this course of pleading and by such prior adjudication.

The complainant and appellant is an insurance company, the defendant is a manufacturing corporation, having its plant in this state. In tire latter part of July, 1897, these parties entered into an agreement, which is thus described and interpreted in the opinion delivered in this court in the action at law above referred to (New Jersey Rubber Co. v. Commercial Assurance Co., Ltd., 35 Vr. 580):

“The uncontradieted evidence showed that in the negotiations for insurance by the defendant it was agreed between the plaintiff and the defendant that the latter should issue its policy to the amount of $35,000, distributed among the several items of property, and that the plaintiff should procure from other insurers policies on the same property to the amount of $75,000, at 'least, which should be concurrent and proportionate with the policy of the defendant. The true intent of this agreement was that, simultaneously with the complete execution of the defendant’s contract, the plaintiff would procure other insurance of such a character as would limit the defendant’s responsibility on its policy to one-fourth of the loss happening to any item of the property insured. This agreement was not carried out by the plaintiff.” The opinion also says: “In order to render the policy of the defendant fully operative, delivery by the defendant and acceptance by the plaintiff were necessary, and the legal effect of the agreement mentioned was to preclude the plaintiff from accepting the policy unless it had, at the same time, such other insurance as was contemplated. Since, in the present case, the plaintiff did not comply with the stipulation which was to be fully performed by it on acceptance of the defendant’s policy, it could not, and did not, lawfully accept that policy while the stipulation remained in force.”

It is therefore established that the policy of the complainant, although it had passed into the possession of the defendant, was not a contract, because of the default of the defendant. Of this default the complainant was ignorant until after the occurrence of a lire by which property described in the policy was destroyed. This was upon October 21st, 1897. On November 20th, 1897, the complainant tendered to the defendant the proportionate amount of such loss for which it would have been liable had the defendant not defaulted, at the same time canceling its policy, under its terms, and returning the unearned premium. On February 4th, 1898, the defendant commenced an action at law against the complainant upon the policy, which was in its possession. On March 4th, 1898, the complainant exhibited to the chancellor its bill, stating its case, and praying for an injunction to restrain the defendant from proceeding with its action at law, and also asking

“that it may be declared by this court that the real agreement between the parties aforesaid was that the said contract of insurance between your orator and the defendant was exactly concurrent and proportionate with the policies of insurance issued to the defendant by the said mutual companies.”

There was a prayer for specific and for general relief. In its bill the complainant stated that it had offered to pay to the defendant, and was still willing and ready to pay, the proportionate amount of said loss under its agreement. It also stated that it had defences that were available only in a court of equity, and that it was unable to interpose these defences in the said action at law, because the written contract of insurance did not contain the agreement made between the complainant and the defendant, stating that agreement as it was afterwards interpretecl in the opinion of this court, above cited. The bilí also prayed for a reformation of its said written contract of insurance.

TJpon the coming in of this bill an order to show cause, with a restraining clause, was allowed in the first instance, but, on March 39th, was so modified as to permit the action at law to proceed, reciting that it appeared

“that the complainant claims to have legal defences to the action at law set forth in its bill of complaint outside of the facts presented as the basis for equitable relief, and that the facts presented as a basis for equitable relief may also be held to be sufficient defences at law, in which event no intervention of this court would be necessary.”

The parties thereupon went to trial in the action at law, in which it was held that, by the cancellation of the written contract on which the action was básed, the defendant had recognized it as a valid instrument in force at the time of the fire; which judgment was afterwards affirmed by this court. The complainant then returned to the court of equity, and, by means of a supplemental bill, exhibited the futility of its defence to the policy in the court of law, and renewed the prayer for equitable consideration contained in its original bill, with an added prayer that the defendant be enjoined from proceeding to execute its judgment at law- To this bill a demurrer was interposed by the defendant and sustained by the court, upon the ground that the judgment at law had conclusively settled the rights of the complainant. The appeal of the complainant now presents the question of the propriety of this order.

This brief rehearsal demonstrates more satisfactorily than any mere argument could that, in its disposition of the complainant’s case, the court of chancery followed the concrete ruling of the court of law, without noting the distinction therein made between the policy of insurance and the contract between the parties. Mr. Justice Dixon, in the opinion above cited, made i't perfectly clear that the contract between the parties was not the policy of insurance. The substantial contract, he declared, was a bilateral one, in which each of the parties was an actor, and that while the complainant’s policy was contemplated as a factor of this executory contract, standing alone it imported no obligation of any sort. Keeping this distinction in mind, it is evident that the contract submitted by the complainant to the court of equity, and that upon which the defendant sued at law, were totally different affairs. Indeed, under the law of the case, their only point of similarity was that neither of them had any legal existence. The contract submitted to the chancellor was the one that would have resulted if the defendant had not made default; that upon which the defendant sued was the one that had resulted from that default. The former was sought to be validated as a contract in equity by the fact that the party who had been wronged had done equity, which very circumstance, maugre its purpose, was, by force of immemorial law, a waiver of all defences strictly legal. Por reasons presently to be stated, the court of equity might, with marked propriety, have held that the doctrine of res judicata would not suffer impairment by a decision that, where a matter in pais had acquired a fixed import at law, but might have an opposite 'significance in equity, a judgment that accorded to such matter its strictly legal consequences would not control fhe effect to be given to it by a court of equity. If this be not so, the rule in question is a snare for honest suitors. Of this the present ease is its own best illustration. The complainant, in order to merit equitable consideration, had to do equity under the terms of its legal obligation, but to recognize such obligation for any purpose was, in a.court of law, to acknowledge its existence for all purposes. Hence, to invoke equity the complainant must, at the same time, renounce law—that was its dilemma; but, if the very act by which it did equity be of itself a bar to equity, the affair is a travesty, and the way of the transgressor is made plain. This is obviously the effect of holding that the waiver of rights cognizable by the court of law was also a waiver of rights of which such court could take no cognizance.

If the broad .claim be made that the court of law had established that the policy, of insurance was for all purposes the only contract between the parties, or that its judgment so conclusively embodied all the rights of the parties that none could be elsewhere established or otherwise enforced, the answer. is that such a power did not reside in the court of law. If it were not that it would be dictum, there is a temptation to add that a court of law can never say that any writing so perfectly expresses the mind of the parties as to deprive a court of equity of its jurisdiction in those respects wherein its jurisdiction is exclusive. The order that has been brought here gives, as it seems to me, some such illicit weight of the legal judgment obtained by the defendant, and, by failing to note the distinction between the policy of insurance and the contract between the parties, has applied to the latter a judicial rule that at best could affect but the former. This fundamental error has-resulted in an inequitable treatment of the complainant’s case. It is now clear beyond any doubt that from the defendant’s default there resulted to the complainant an election to avoid all liability under its policy by standing on its legal rights, or, upon the other -hand, to recognize its liability to the extent that it had agreed to assume it, which was its equitable right. By its offer to pay the proportionate part of the defendant’s loss, together with the unearned premium and the cancellation of its policy, the complainant elected to take the equitable course, thereby abandoning all of its legal defences. Its present grievance is that its election to do equity, and the fact that it has done equitjr, are the grounds upon which it is denied a hearing in equity. Obviously this is the complainant’s plight, which 'is the same now as when it filed its original bill. The equitable phase of its ease has never been heard, and remains to be worked out upon the lines indicated by the former opinion in this court,'just as if the ineffectual episode of the legal trial had never been interposed. This is the equitable view of the complainant’s position, and to this end the order appealed from must be reversed.

It may be well to add, in the interest of clarity, that these views are based upon the idea that the remedy of the complainant is not by a reformation of its policy of insurance, but by the enforcement of its contract as binding upon the defendant, under the maxim that equity regards that as done that ought to have been done, and that the jurisdiction thus invoked does not rest upon mistake in its technical acceptation, but rather upon fraud in equity as distinguished from legal fraud. Upon this equitable fiction of fraud, and not upon actual fraud or a strained definition of mutual mistake, the jurisdiction of the court of equity may apparently be rested, unless, upon final hearing, a different state of the proofs compels a different result. For present purposes it is enough to say that the order of the chancellor, sustaining the defendant’s demurrer, must be reversed, in order that the cause may proceed towards a hearing upon its merits.

For reversal—Van Syckel, Dixon, Garrison, Collins, Garretson, Hendrickson, Vroom—7.

For affirmance—-Ti-ie Chief-Justice, Fort, Pitney, Adams, Vredenburgii—5.


source: Caselaw Access Project

author: Garretsoh, J.

license: Public Domain

text:
    Harry L. Campbell et al. v. The John W. Taylor Manufacturing Company.
    [Filed March 3d, 1902.]
    1. The eighth section of the Mechanics’ Lien law defines “fixed machinery for manufacturing purposes” to be a building; and machines furnished to become parts of such a building are materials for which a lien may be filed under that law.
    2. The bringing of such machines upon" the premises is the commencement of the building, by the twenty-eighth section of the same law.
    On appeal of the Prentiss Tool and Supply Company from an order of the chancellor, advised by Vice-Chancellor Grey (whose opinion is reported in 17 Dick. Ch. Rep. 307), affirming the determination of the receiver of the defendant, dismissing their petition, praying the receiver to consider and adjudge the petitioner’s claim to be a mechanics’ lien claim and to be prior and preferred to the claim of the common creditors of the defendant.

      Mr. John M. Perry (of the New York bar) and Mr. Charles K. Chambers, for the Prentiss Tool and Supply Company, appellant.

      Mr. Walter A. Barrows and Mr. Echará P. Budd, Jr., for the receiver.
   The opinion of the court was delivered by

Garretsoh, J.

The John W. Taylor Manufacturing Company purchased from the Prentiss Tool and Supply Company five pieces of machinery, viz., one boring mill, one boring and turning mill, one engine lathe, one feed drill, and one key-setter and counter-shaft, td be placed in the factory of the Taylor company for the purpose of manufacturing water-wheels.

In order to use the machines effectively it was necessary that they should be placed upon substantial foundations, built in or upon the ground.

The machines were all delivered upon the premises of the Taylor company, and all except the boring and turning mill were actually placed upon foundations especially prepared for them, constructed of brick, cement and timber, in or upon the ground; the plans for a foundation of like character for the boring and turning mill had been prepared, but that foundation has not actually been built.

On the 22d of January, 1901, the Prentiss Tool and Supply Company filed a lien claim for tire price of these machines against the Taylor company, upon the fixed machinery, of which these machines formed a part, and upon the land whereon the same stood, including the lot or curtilage whereon the same was erected. On the 28th of January, 1901, the chancellor appointed a receiver for the Taylor company, and afterwards the Prentiss company presented a petition to the receiver claiming a mechanics’ lien upon the premises described, and praying that the receiver would adjudge their claim for the price of these machines to be prior and preferred to the claim of the common creditors of tire Taylor company; the receiver admitted the claim of the petitioner as that of a common creditor, but denied the claim any preference or priority by reason of the lien. Prom the determination of the receiver the Prentiss company appealed to the chancellor, w'ho made an order, advised by the vice-chancellor, sustaining the adjudication of the receiver.

Prom this order of the chancellor the Prentiss company appeals to this court.

It is provided by section 8 of the Mechanics’ Lien law (P. L. of 1898 p. 538) :

“Any addition erected to a former building, and any fixed machinery or gearing, or other fixtures for manufacturing purposes, shall be considered a building, for the purposes of this act.”

By section 1 it is provided:

“Every building hereafter erected or built within this state shall be liable for the payment of any debt contracted and owing to any person, for labor performed or materials furnished, for the erection and construction thereof, which debt shall be a lien on such building and on the land whereon it stands, including the lot or curtilage whereon the same is erected.”

And it is further provided by the twenty-eighth section, that, in case of gearing or machinery, the bringing of the same upon the premisos shall be the commencement of the building.

The machines were some of the materials furnished for the erection of a building, known in the statute as “fixed machinery for manufacturing purposes.” This building was made up of the foundation, the attachment of the machines to the foundation, the machines themselves, and whatever was necessary to adapt and make it in its entirety fixed machinery suitable for the purpose for which it was intended.

The machine was as much a part of the materials furnished for •the erection and construction of the building described in the statute as the bricks, mortar and timbers in the foundations, and the bolts and fastenings which held the two together. The four machines had actually become a part of the building—fixed machinery for manufacturing purposes—and the fifth was designed and intended to also become a part thereof; it had actually been brought upon the premises, and was lying there to be put in place.

The determination of this question is one of statutory construction : it does not depend upon the law of fixtures; not upon whether the particular machines will be destroyed by an attempt to separate them from the place in which they have become fixed, or can be taken and set up in another place and there be used as in the place of their first erection. If it appears that they were not mere movable tools, but intended to be used as a part of a permanent manufacturing plant, then, under the statute, that building, of which they have become such part, is liable to a lien for their cost.

In Morris County Bank v. Rockaway Manufacturing Co., 1 McCart. 189, Chancellor Green held: “It'is objected to the claim, of the lienor, and the fact is established by the evidence, that a part of the materials furnished by him were not used in the construction of any building or fixtures for manufacturing purposes upon the mortgaged premises, but continued unused at the time of the insolvency of the mortgagors. The evidence shows that the materials were furnished to order for the construction of the converting furnace, and were delivered upon the premises of the company. The bulk of them were used in the converting furnace; a part of them at the rolling-mill; but a portion of them were left unused, the company having failed before the completion of the work. The materials having been furnished for the building, and delivered to the company or their agents in good faith, it is immaterial to the validity of the lien whether they were used in the building or not. The terms of the statute are very clear. It declares that the building shall be liable for the payment of any debt contracted and owing to any person for materials furnished for the erection and construction thereof, which debt shall be a lien on the building and the land whereon it stands, including the lot or curtilage whereon the same' is erected. The right of the lien depends upon the fact that the debt was incurred and the materials furnished for the purpose of the building. In the absence of fraud on the part of the creditor, the rights of the lienholder are not affected by a faiL ure to úse the materials or by their diversion from the purpose for which they were intended. The law upon this subject is well settled.”

The debt incurred in the purchase'of these machines was for materials entering into the construction of a building, within the meaning of the statute, and the building and the land whereon it was constructed are liable to a lien, and this debt should have been declared to be a preferred debt and payable prior to the debts of common creditors.

The order of the chancellor will be reversed, and the cause remanded to the court of chancery, to be proceeded with in accordance with this determination.

For reversal—The Oi-iiee-Justice, Yan Syckel, Dixon, Garrison, Collins, Fort, Garretson, Hendrickson, Pitney, Krueger, Adams, Yredenburgh, Yoorhees, Yroom—14.

For affirmance—None.


author: Hendrickson, J.

text:
    The Equitable Life Assurance Society of the United States, appellant, v. Ruth C. Chesley, administratrix of the estate of William P. Chesley, deceased, respondent.
    [Argued December 5th, 1901.
    Decided March 3d, 1902.
    Filed March 4th, 1902.]
    1. When an administrator has neglected to make a final settlement of his account within one year after the granting of letters of administration, any creditor of the estate, whose debt or demand is barred by a decree of the orphans court, may present a petition for relief to that court, pursuant to section 80 of the Orphans Court act (P. L. of 1898 p. 743) ; thereupon it becomes the duty of the court to investigate the circumstances of the case and the condition of the estate, and if it be made to appear that such delay was unreasonable and without sufficient cause, the court may, by decree, give the creditor relief against any assets in the hands of the administrator, in the way provided by the statute.
    2. And when such petitioning creditor has brought himself within the terms of said section of the Orphans Court act, he may lawfully file exceptions to the final account of the administrator, which, if established, would enhance the amount of assets in the hands of such officer.
    3. As against the right of the petitioner to the relief thus established, the administrator cannot crave allowance for moneys paid to liquidate the claim of another creditor, that was also barred by the decree. While, under section 68 of the Orphans Court act, the court or surrogate is enjoined to allow to the accountant for the payment of all lawful claims presented within the time limited by the rule to bar, if there be sufficient of the estate to pay such debts of equal degree in full, the administrator cannot, before final settlement, to the detriment of such petitioning creditor, pay the claim of a creditor barred by such decree, without the order or direction of the court.
    On appeal from a decree of the ordinary affirming a decree of the Hudson county orphans court, whose opinion is reported in 18 Dick Ch. Rep. 219.

      Messrs. Lewis, Besson & Stevens, for the appellant.

      Messrs. Corbin & Corbin, for the respondent.
   The opinion of the court was delivered by

Hendrickson, J.

The contest arises in this case between the appellant society, a creditor of the deceased, whose claim is barred by a decree under a rule to bar creditors, and the administratrix, who, in her final account, craves allowance for a claim paid by her which was also barred by such decree. The facts leading up to this controversy' are so well stated in the opinion of the ordinary that a general restatement of them will be unnecessary.

The administratrix and her three children were interested, as the widow and heirs of her husband, the intestate, in a parcel of land of which he died seized. It was encumbered by a mortgage, given to secure the bond of the deceased, known as the Parker bond. They made sale of this land, and in doing so found it necessary to pay the mortgage debt. For the purpose of being exonerated for this payment out of the personal estate of the deceased, they presented claims for their pro raia shares thus paid, under oath, to the administratrix, and the same were paid by her out of the funds of the estate. These payments, in four items, appeared upon the credit side of her final account, .and, if allowed to stand, would practically absorb the balance of the assets, leaving the appellant’s claim unprovided for. The respondent took out letters of. administration on October 6th, 1896, but did not file her account with the surrogate until November 20th, 1899. The required oath was attached January ■22d, 1900. On March 9th, 1900, the appellant filed a petition in the orphans court setting forth, in due form, its claim as .a creditor of'the deceased, and alleging a balance due thereon •of $2,744. The petition was framed under section 80 of the •Orphans Court act (P. L. of 1898 p. 743), and, after reciting the facts as to the grant of letters and the decree taken to bar creditors and as to its own claim being barred by the decree, .averred, among other things, that the administratrix had neglected to make a final settlement of her account within one year, and that she • then had assets in her hands as such administratrix. The petition further prayed the court to make a proper order touching the proof of the claim of the petitioner (if disputed), and for a decree giving it relief against any assets in the hands of the administratrix as might be equitable and just. The appellant thereupon exhibited exceptions to the items .showing the payments by the administratrix to herself and children in satisfaction of the Parker bond. The claim made on .account of these payments was sworn to November 17th, 1899.. The decree barring creditors bears date July 2d, 1897. So, as before stated, the bar of the decree operated against the claims excepted to.

After the hearing of the exceptions the orphans court made decree disallowing the exceptions find allowing the account as stated. One of the grounds of this decision was that the exceptions were not legally well founded. Erom this view the ordinary, on appeal, dissented, although he reached the same result as did the court below, and affirmed the decree. He reviews the question of the stains of the appellant to file exceptions, and his conclusion was that, by virtue of its petition filed under section 80 of the Orphans Court act, before referred to, it acquired a status to file exceptions to-the account. We concur in what -the ordinary has so well said in the opinion on that point, and-also as to the right of an lieir who is compelled to pay a debt of a decedent secured upon the land descended to ordinarily be reimbursed out of the personal estate of the deceased. We think, however, that, in denying to the appellant the relief sought, the ordinary has failed to follow his determination as to status in favor of the appellant to its logical result.

To start with, it is admitted that the petitioner had brought itself' within the terms of section 80; and hence, under the terms of that section, it thereupon became the duty of the court “to investigate the circumstances of the case and the condition of the estate,” and if it were made to appear that the delay in-failing to malee a final settlement within the year had been “unreasonable and without sufficient cause,” tiren the court might, “by decree, give such creditor relief against any assets” that might be in the hands of thé executor or administrator.

■ Now, what are the assets in the-hands of such an officer to which the statute extends this relief in behalf of “any creditor whose debt or demand shall be barred by such decree ?” We think it is the balance, if any, in the officer’s hands, after deducting the lawful claims presented within the time limited by the rule to bar and the lawful expenses of settling the estate. The proviso in section 68 of said act (P. L. of 1898 p. 739) points to the correctness of such a construction. Hnder it the officer, in paying the claims so presented, may pay, not only a claim duly verified under the act, but if he pay, in good -faith, a claim not so verified, if it be proven tó be a just claim on or before the final accounting, it is enjoined upon the court or surrogate to allow to the accountant the amount of such claim and demand, if there be sufficient of said estate to pay the debts of equal degree with said claim and demand in full, &c.

It is admitted that, as a consequence of the decree giving effect to the rule barring creditors who have not presented their claims, such barred creditors cannot sue the executor or administrator, nor look to such officer for payment. It is a logical deduction from this situation that, in á case like this, such officer should not, before final settlement, pay creditors thus barred by the decree, except at his own risk, without an order of the orphans court, With regard to the other creditors of the estate who may be barred, as well as to those entitled as distributees, the executor or administrator remains the trustee and custodian of the assets remaining after payment of debts and charges not within the bar of the statute until such final settlement; and before such officer can lawfully deal with the assets in payment of creditors who are barred or distributees, before final settlement, the direction of the orphans court must be sought. A justification for the payments in question is attempted, on the ground that the administratrix had no notice at the time of appellant’s claim to be a creditor; that it had not filed its claim with the respondent as such officer under oath at any time. But, upon the principle just stated, such notice was not necessary, since the administratrix was without authority to malee the payments, and it is plain that, under the eightieth section, it was not the duty of the appellant, as a barred creditor, to file its claim with the administratrix.

In Ryder v. Wilson’s Executors, 12 Vr. 9, Chief-Justice Beasley very aptly stated the duty of such a creditor, under a kindred section of the Orphans Court act, in these words: “The remedy of the creditor who is in laches, and has not put in his claim, is, I think, to present such claim to the orphans court, and to bring in at the same time property not accounted for, and, under the direction and order of the court, to have his claim established, and the newly-discovered property distributed.”

That the duty of the executor or administrator, as custodian of the assets thus remaining, is here correctly laid down, is further demonstrated by reference to other sections of the Orphans Court act bearing upon the question of relief to creditors who are thus barred. Under sections 72, 77, 78 and 79 of said act, which, in various forms, extend relief to such barred creditors, where the estate has been settled and there has been a surplus for distribution, it will be noticed that almost invariably the recovery by the creditor is limited to a ratable proportion of his claim, plainly indicating that the relief intended was to be for all such barred creditors who should avail themselves Of the remedy provided. A further effort is made to justify the payments excepted to, on the ground that the claims arose after the decree, and therefore are not within its bar. But this position is not tenable. The decedent’s bond was unpaid at the time of his death, and the obligee could have presented his claim within the time limited. He did not do so, and hence his claim was within the bar of the statute. The heirs who paid the debt of the deceased seek to be exonerated- by right of subrogation, and therefore cannot claim any equity superior to that of the obligee under.whom they claim.

Upon the principles here stated it results that the administratrix, in paying the claims excepted to without the order or direction of the orphans court, acted without lawful authority. The exceptions must therefore be sustained, not as adjudging the claims Jo have been invalid, but that the payments were such as do not entitle them to a place on the credit side of the account. To that amount the balance of assets will be correspondingly increased. It will be the duty of the orphans court, therefore, to entertain the appellant’s petition as filed and to proceed thereon in the manner pointed out by the statute already referred to. In the investigation of the matter, 'the court would necessarily have regard to the claims excepted to and filed with the administratrix, as well as to that of the appellant, requiring proof of the same if disputed. As to whether the contesting claims, if satisfactorily established, should be paid fro rata from the balance of the assets remaining, or whether either is entitled to priority in payment over the other, are questions yet to be considered by the court below in the light of these rulings, so- that we deem it proper to express no opinion thereon.

The decree of the prerogative court is reversed, and a decree will be entered therein reversing the orphans court and directing a decree in that court in accordance with the views herein expressed.

For reversal—The Chief-Justice, Yah Sycicbl, Dixon, Garrison, Port, G-arretson, Hendrickson, Pitney, Krueger, Adams, Yredenburgi-i, Yoori-iees—12.

For affirmance—None.


author: Pitney, J.

text:
    Rachel S. Christopher, administratrix, &c., of Theodore L. Christopher, deceased, complainant and appellant, v. Isaac T. Wilkins et ux. et al., defendants and respondents.
    [Submitted December 9th, 1901.
    Decided March 3d, 1902.
    Filed March 3d, 1902.]
    1. Section 11 of the statute of limitations (Gen. Stat. p. 1976), which provides that “no endorsement or memorandum of any payment written or made, after this act shall go into effect, upon any promissory note, bill of exchange or other writing, by or on behalf of the party to whom such payment shall be made, shall be deemed sufficient proof of such payment so as to take the case out of the operation of this act,” does not render such endorsements and memoranda inadmissible in evidence in cases where otherwise they would bo admissible. Its effect is to prevent their being accepted as sufficient evidence to prove the payment for the purpose of avoiding the bar of the statute, and therefore to require evidence of the payment in addition to that contained in the endorsements or memoranda.
    2. Under the revised act concerning evidence (P. L. of 1900 p. 363 § 4), in order to qualify a non-representative party to testify to transactions between such party and the person deceased, or concerning statements made by the person deceased in the hearing of the non-representative party, it is sufficient that the representative party shall have first testified in his own behalf to any transaction with or statement by the deceased. The testimony of th'e non-representative party is not to be limited to those transactions and statements concerning which the representative party has testified.

      On appeal from a decree advised by Vice-Chancellor Eeed, who delivered the following opinion:
    The bill is filed to foreclose a mortgage executed on May 29th, 1873, by Isaac T. Wilkins and Lydia Ann Wilkins, his wifé, to Theodore L. Christopher, and payable in one year. The bill charges that no interest has been paid since March 25th, 1890, and prays for an accounting and sale of the property.
    The answer of Lydia Ann Wilkins, the mortgagor, admits the execution of the mortgage, but says that no interest has been paid upon the said mortgage nor has the debt been acknowledged. She' asks for the benefit of this defence, as if she had pleaded the statute of limitations. She also filed" a cross-bill, setting up that the deceased mortgagee, in his lifetime, occupied the mortgaged premises since March, 1876, to the time of his death (he having died on June 12th, 1899), and received the profits from the same, and she asks for an accounting.
    The complainant joins issue upon the answer, and files an answer to the cross-bill. The answer admits that the deceased occupied the mortgaged premises for a portion of the time mentioned, but at a rental fixed upon by an agreement between him and Lydia Ann Wilkins. It denies that the profits were more than sufficient to pay the mortgage debt.
    The defendant Lydia Ann Wilkins joins issue on the answer to. the cross-bill..
    There is no sufficient evidence to convince me that a cent of interest was ever paid by Lydia Ann Wilkins, or anyone in her behalf, to the mortgagee.- The endorsements made upon the bond by the mortgagee are not evidential of that fact. Certain declarations of T.ydia Ann Wilkins, made at a late conference between representatives of the mortgagee and herself, are relied upon. Thejr, however, are so liable to have been misinterpreted that I am not convinced of their accuracy,'in view of the fact that, upon the stand, she swore that she had never paid any interest, and in view of the further fact that the mortgagee was in possession of the mortgaged premises from 1876 until his death, enjoying the use of them without any accounting.
    Besides, against her declarations are those which are sworn to have been made, by the mortgagee himself during his life, to the effect that the mortgage was outlawed and that no interest has been paid upon it.,
    I am constrained to the conclusion that there can be no decree for the complainant.
    if or do I see how there can be a decree for an accounting in favor of the defendant on her cross-bill. As already observed, the mortgagee took possession of the mortgaged premises in 1876, and retained possession until his death 'in 1899. Lydia Ann Wilkins denies that he was in possession as her tenant. There is nothing,-.therefore, to show that his occupancy was other than that of mortgagee in possession. The eighteenth section of the statute of limitations provides that if a mortgagee, or those under him, be in possession' of the lands, tenements and hereditaments contained in the mortgage, or any part thereof, for twenty years after default in payment by the mortgagor, then the right of equity of redemption of the mortgagor shall be forever barred. It was held in Chapin v. Wright, 14 Stew. Eq. 438, 444, that this is a peremptory provision, and is not. even affected by the fact that the mortgagee had recognized the existence of the mortgage relation, by having filed a bill to foreclose. The right to an accounting is an incident to the existing relations as mortgagor and mortgagee. Lydia Ann Wilkins denies the existence of such relation. Besides, redemption is the leading incident of such relation; when the right to redeem is gone, the relation ceases, and with it ceases the right to an account which is based upon it.
    The cross-bill must also be dismissed.

      Mr. Robert S. Clymer, for the appellant.

      Mr. Eclcard P. Budd, for the respondents.
   The opinion of the court was delivered by

Pitney, J.

The present appeal relates only to so much of the decree as dismisses the complainant’s bill for foreclosure. With respect to this, the conclusions of the learned vice-chancellor are fully sustained by the evidence, liis remark, however, that “the endorsements made upon the bond by the mortgagee are not evidential” of the fact of payments of interest, is inaccurate, unless it was made with reference to the particular endorsements before him, rather than as an expression of a general rule of evidence. No copy of the endorsements has been laid before us, but from the other evidence in the case we understand that there were successive endorsements in the handwriting of Theodore L. Christopher, some of which were dated before the time when the bond and mortgage would have-been barred by the statute of limitations and some dated at later times.

It was formerly held in England, and generally in this country, that memoranda or receipts endorsed by a creditor upon a bond or note, admitting payments of interest or part payments of principal, and appearing to have been fairly made contemporaneously with the receipt of money, were admissible in evidence, after the death of the party making them, to show partial payments by the debtor, and thereby to raise a new promise to pay the balance of the debt, so as to avoid the bar of the statute of limitations. But this was allowed only when the receipts either bore date at a time before the debt was barred, or were shown, by evidence aliunde, to have been made before the debt was barred. ' ■

They were then admitted on the ground that, when made, the memoranda were against the pecuniary interest of the persons making them. Wood Lim. § 115; Ang. Lim. §§ 241, 242; 1 Greenl. Evid. § 121; Higham v. Ridgway, 10 East 109; Sm. Lead. Cas. 1607, and cases cited in note to edition of 1888.

Under this rule it is obvious that in some circumstances the endorsement or.memorandum alone might be deemed sufficient proof of payment so as to take the case out of the operation of the statute of limitations.

In the year 1828 Lord Tenterden’s act (9 Geo. IV. c. 14) was passed, by section 3 of which it ivas enacted, in substance, that no endorsement or memorandum of any payment made or written upon any promissory note, bill of exchange or other writing, by or on behalf of the party to whom such payment was made, should be deemed sufficient proof of such payment so as to take the case out of the operation of the statute of limitations.

The provisions of this act of parliament have been very generally adopted by statute in this country, and in the year 1874 were embodied in the revision of our act for the limitation of actions. Gen. Stat p. 1974. By the eleventh section of that revision it is enacted

“That no endorsement or memorandum of any payment written or made, after this act shall go into effect, upon any promissory note, bill of exchange or other writing, by or on behalf of the party to whom such payment shall be made, shall be deemed sufficient proof of such payment so as to take the case out of the operation of this act.”

The proper scope of this section is indicated by its plain language. It does not render such endorsements and memoranda inadmissible in evidence in cases where otherwise they would be admissible, but it prevents their being accepted as sufficient evidence in and of themselves to prove the payment, for the purpose of taking the ease out of the operation of the statute of limitations. Its effect is to require evidence of the payment in addition ta the endorsement, but not to exclude the endorsement from consideration as evidence if otherwise admissible. The distinction was evidently recognized by Mr. Justice Depue in delivering the opinion of the supreme court in Parker v. Butterworth, 17 Vr. 244, 247.

The point just discussed was, of course, not involved in the case of Oberg v. Breen, 21 Vr. 145, where this court held that the books of account of a merchant are not evidence in his own favor, with respect to payments credited in them to his customer. In that case the merchant was living, the customer dead; and the decision was based on the inadmissibility of mercantile books for the purpose of proving payments of money.

Upon the argument of the present appeal it was strongly insisted that the vice-chancellor erred in admitting the testimony of Lydia A. Wilkins, the mortgagor (she being a defendant in the suit) with respect to certain statements by and transactions with Theodore L. Christopher, whose personal representative was the complainant. The case shows that Mrs. Wilkins was called as a witness in her own behalf before the complainant was called, and that on her examination she was asked to testify with respect to a transaction with Theodore L. Christopher, but, on objection by complainant’s counsel, she was prohibited from giving such evidence. Afterwards Mrs. Wilkins was recalled in behalf of the complainant, but she gave no evidence concerning any statement by or transaction with the deceased. Subsequently the complainant, being the representative of Theodore L. Christopher, was called in her own behalf in rebuttal, and, under examination by her counsel, testified that' she had seen her husband write in his lifetime and was familiar with his handwriting. Being shown the mortgage in suit, she was asked in whose handwriting were the receipts, and signatures attached to the receipts, appearing upon the mortgage. She replied that they were those of Theodore L. Christopher; that she had seen him sign one or two of those receipts; that she did not remember distinctly what date it was, but thought it was in 1894 or 1895. Thereafter Lydia A. Wilkins was recalled in behalf of the defendants and was permitted, against the objection of complainant’s counsel, to testify with regard to transactions with and statements by Theodore L. Christopher other than the supposed payments of interest upon the mortgage. These payments she at the same time denied.

It is not necessary at this time to refer to sections 3 and 4 of the revised act concerning evidence, approved March 27th, 1874 (Gen. Stat. p. 1397), and the supplement, approved February 25th, 1880. P. L. of 1880 p. 52; Gen. Stat. p. 1407. The supplement of 1880, and its bearing upon the act of 1874, were fully discussed in this court in the case of McCartin v. McCartin, 18 Stew. Eq. 265, and a majority of the court adhered to the opinion expressed by Mr. Justice Van Syekel, who said: “My conclusion is that, if the representative offers himself as a witness, and testifies to any transaction with or statement by the testator or intestate, the other party may be a witness on his own behalf as to all transactions with or statements by such testator or intestate which are pertinent to his case. But if the representative offers himself on his own behalf and does not testify to any transaction with or statement by his .testator or intestate, the other party is excluded from testifying with regard to any such transaction or statement.” .

The several acts concerning evidence were again revised by the legislature of 1900, all previous statutes on the subject being, at the same time, repealed. Section 4 of this revision (P. L. of 1900 p. 363) is as follows:

“In all civil actions any party thereto may be sworn and^ examined as a witness, notwithstanding any party thereto may sue or be sued in a representative capacity; provided, this section shall not extend to permit testimony to be given by any party to the action as to any transaction with or statement by any testator or intestate represented in said action, unless the representative offers himself as a witness on his own behalf, and testifies to any transaction with or statement by his testator or intestate, in which event the other party may be a witness on his own behalf as to all transactions with or statements by such testator or intestate which are pertinent to the issue.”

It will be observed that the legislature has'thus adopted the language of Mr. «Justice Van Syclcel in the McCartin Case almost in hcec verba. This language is so plain as to carry its own interpretation.

In the case at hand, the administratrix having offered herself as a witness in her own behalf, and testified in her own behalf to transactions with her intestate, to wit, that she had seen him write and had seen him sign certain of the receipts for interest appearing upon the mortgage in suit, the other party (Mrs. Wilkins) thereupon became a competent witness in her own behalf as to all transactions with or statements by the intestate which were pertinent to the issue. In order to qualify the non-representative party to testify concerning transactions between such party and the person deceased, or concerning statements made by the person deceased in the hearing of the non-representative_ party, it is sufficient that the representative party shall have first testified to any transaction with or statement by the deceased. It is not necessary that the testimony of the representative party shall have related to a transaction between the iron-representative party and the person deceased, or to a statement made by the person deceased in the presence of the non-representative party. Nor is the testimony of the non-repxesentative party to be limited to those transactions and statements concerning ■ which the representative party has testified. Testimony by the representative party concerning any transaction with or statement by the deceased, although the deceased and the representative party thus testifying may have been the only parties .to the transaction mentioned, and although the statement by the deceased may have been heard only by the representative party, is sufficient to qualify the non-representative party to testify concerning all transactions with and statements by the person deceased which are pertinent to the issue.

The testimony of Lydia Ann Wilkins concerning transactions with and statements by Theodore L. Christopher, given after the examination of Mrs. Christopher, the administratrix, was therefore properly admitted and considered by the learned vice-chancellor.

The decree, so far as appealed from, should be affirmed.

For affirmance—The Chief-Justice, Van Syckel, Dixon, Garrison, Collins, Eort, Garretson, Hendrickson, Pitney, Krueger, Adams, Vredenburgh, Voorhees, Vroom—14.

For reversal—None.


author: Adams, ' J.

text:
    Elena K. Clark, appellant, v. Wylie E. Clark, respondent.
    [Filed May 5th, 1902.]
    One of the essentials to the due publication of a will is that the testator, in the presence of two witnesses, present at the same time, shall declare the writing to be his last will.

      On appeal from a decree advised by Vice-Ordinary Reed in the prerogative court, whose opinion is reported in 52 Atl. Rep. 225.

      Messrs. Miller <& Meyer and Mr. Samuel Iialiscli, for the appellant.

      Mr. Joseph Coult, for the respondent.
   The opinion of the court was delivered by

Adams, ' J.

The learned vice-ordinary, who advised the decree from which an appeal has been taken, reached the conclusion that a certain paper, purporting to be the last will and testament of Phineas V. Clark, was not published according to the requirement of the act concerning wills. The weight of the evidence supports this conclusion. The testimony is discussed at length in the opinion of the vice-ordinary and need not be restated.

It appears that two persons affixed their names as subscribing witnesses, at the request and in the presence of Mr. Clark, to a document that he had»already signed. Mr. Clark did not sign in the presence of either witness, nor was it legally necessary that he should do so, as our statute makes the testator’s acknowledgment of the making of his signature equally valid. Each witness, when' he signed, saw upon the paper and recognized the signature of Mr. Clark. This instrument, which was inartificially drawn by Mr. Clark himself, has no attestation clause. It ends thus:

“In testimony whereof I have hereunto set my hand and seal and publish and declare this to be my last Will and Testament in the presence of witnesses named below. This, the 29th day of April, in the year of 1895.”

Whatever presumption of due execution might arise from the use of this formula is overthrown by the testimony. Whether Mr. Clark acknowledged the making of his signature in the presence of both witnesses,- present at the same time, or even in the presence of one of them, is at least doubtful. Another feature of the case that is of itself decisive is that Mr. Clark did not, in the presence of both witnesses, declare the writing to be his last will. Such a declaration is essential to due publication. It satisfactorily appears that neither witness was told by Mr. Clark, and that neither witness knew when he signed that the document to which he put his name was a will.

It will be observed .that the concluding clause does not contain the averment that the witnesses subscribed their names, in the presence of each other. The weight of the evidence is that they did not do so. The learned vice-ordinary, in dealing with the matter, correctly said that the statute concerning wills does not, in express words, require that the witnesses shall sign in the presence of one another. Whether sutíh a requirement, though not distinctly expressed in the act, results, by natural and necessary implication, from the statutory language, is a question that need not now be decided, and as to which we express no opinion.

The decree is affirmed.

For affirmance—The Chief-Justice, Van Syokel, Dixon, Collins, Port, Garretson, Hendrickson, Pitney, Krueger, Adams, Vredenburgh, Vroom—12.

For reversal—None.


author: Yoorhees, J.

text:
    William Odlin, complainant and appellant, v. The Bingham Copper and Gold Mining Company and The Bingham Consolidated Mining and Smelting Company, defendants and respondents.
    [Filed April 21st, 1902.]
    1. A preliminary injunction is properly refused when there exists no reasonable ground for apprehending -that the injury against which it is sought will be attempted.

      2. When the matters set forth by a complainant as ground for .the interposition of the court do not show an improper or illegal purpose, an injunction should be refused. '
    On appeal from an order advised by Vice-Chancellor Stevens, whose opinion is reported in 51 Atl. Rep. 925.

      Messrs. McGee & Bedle, for the complainant and appellant.

      Messrs. Lindabury, Depue & Faúlles, for the defendants and" respondents.
   The opinion of the court was delivered by

Yoorhees, J.

The appeal in this case brings up for review an order advised by Yice-Chancellor Stevens, revoking the interim stay and order to show cause, advised by him May 4th, 1901, wherein he directed that the defendant should desist and refrain from selling any of its assets, except such portion thereof as were disposed of in the usual course of business, and from engaging in any new or different undertaking than such as was contemplated in its certificate of incorporation.

The Bingham Copper and Gold Mining Company was created under the laws of the State of New Jersey, with a capital stock of $3,000,000, It had large assets, consisting of mines, real estate and a smelter, at and near Bingham Canon, Utah, and it was engaged in the business of mining and smelting ore.

The complainant purchased two hundred and fifty shares of the capital stock of this company, of a par value of $10 per share, on May 3d, 1901. In his bill of complaint, filed May 4th, 1901, he alleges that certain directors of the company had procured a corporation to be created under the laws of the State of Maine, called the Bingham Consolidated Mining and Smelting Company, and had issued a prospectus, directed to the stockholders of the Bingham Copper and Gold Mining Company, signed by them and printed in one of the Boston newspapers, setting forth that $5,000,000 of the stock of the Consolidated company should be issued to be exchanged for the capital stock of the old company, and containing this expression, “to take over all the property of your company,” and further stated that seventy-five per cent, of the stock of the original company had already endorsed the plan. Upon the allegations of this bill the interim stay was granted and the order to show cause was made.

The company answered, denying any purpose on its part of transferring its assets, or of denuding itself of its property or franchises, and each'of the persons named in the prospectus filed affidavits therewith, verifying the answer and denying positively any intent or design on their part, either as directors or individuals, of stripping the company of its property, or in any other way preventing it from pursuing the business authorized by its charter, and they further asserted that the only object of the prospectus was to suggest to the stockholders of the old company an opportunity to exchange their holdings for stock of the Consolidated company, if they so. desired; and the board of directors of the old company, at a meeting held June 22d, 1901, of which a notice was mailed to each stockholder, unanimously passed a resolution, as follows:

“Whereas, At a meeting of the board of directors held on the twenty-fourth day of April, 1901, a circular-letter, addressed ‘to the stockholders of the Bingham Copper and Gold Mining Company,’ was discussed and adopted by them, and was, at their direction, sent to each of the stockholders ; and
“Whereas, It has been claimed by some of the stockholders of this company that the said circular expressed an intention on the part of this board to sell and transfer its entire property and assets to the Bingham Consolidated Mining and Smelting Company, a corporation organized under the laws of the State of Maine; now, therefore, be it
“Resolved, That neither this company nor its board of directors now have, or ever have had, any intention of selling or transferring its entire property or assets to the said Bingham Consolidated Mining and Smelting Company, but that, on the contrary, it now is, and always has been, the intention of this company and its directors and officers to conduct and continue to conduct the business of this company as a separate, distinct and independent corporation in good faith, for the sole and equal benefit and advantage of all of its stockholders, unless and until the said stockholders shall, by appropriate and legal action, otherwise order and direct, and this board hereby disclaims any intention to do otherwise; and be it further
“Resolved, That the answer filed by this corporation, under its corporate seal, in the court of chancery of New Jersey, to the bill of complaint of one Odlin, is in fact the answer of this corporation, and that the allegations therein, contained are true, and that the said answer correctly and accurately sets forth the facts in relation to the action, intention and attitude of this board and company.”

The Consolidated company also answered, denying the principal averments of the bill of complaint.

Upon the presentation of the answers, affidavits and the proof of the passage of the above resolution, the vice-chancellor vacated the temporary injunction or interim stay, and we find no error in his ruling.

The principal ground on which the complainant sought the interposition of the court was that the prospectus or circular-letter showed an intent on the part of the officers of the old company to denude it of all its property by transferring the same to the new company, but a careful reading of this paper fails to disclose any such intent or purpose. It is directed to the stockholders of the Bingham Copper and Gold Mining Company; it states that a new company has been incorporated; that certain stock has been set apart to be exchanged for the stock of the old company, and it advises the stockholders of the old company to accept, in exchange for this stock, the stock of the new company. It further states that seventy-five per cent, of the stockholders have endorsed the plan and consented to the exchange of their stock. It discloses no fraud or illegal attempt upon the part of the officers of either company, and contains nothing to justify the intervention of the court by injunction.

The order advised by the vice-chancellor setting aside the preliminary injunction is affirmed.

For affirmance—Ti-ib Ci-iiee-Justice, Van Syokel, Dixon, Garrison, Collins, Fort, Garretson, Hendrickson, Pitney, Adams, Vredenbitrgi-i, Voori-iees, Vroom—13.

For reversal—None


author: Vroom, Jb

text:
    Edward Kinsey et al., complainants and respondents, v. George Feller et ux., defendants and appellants.
    [Filed March 3d, 1902.]
    1. Subsequent creditors can attack or impeach a voluntary deed made by one free from debt only by proving actual fraud, and the burden is upon them to show an actual intent in the minds of the parties at the time of the making of the conveyance to hinder, delay of defraud creditors.
    2. A wife’s separate estate will not be charged with the debt of her husband merely because she stood by in silence while he represented the property as his, and permitted the creditors to act in the belief that this representation was true. Carpenter v. Carpenter’s Executors, 12 C. E. Gr. 502, followed.
    On appeal from a decree, advised by Vice-Chancellor Pitney, whose opinion is reported in 51 Atl. Rep. 485.

      Messrs. Goddington & Bwackluimer, for the appellants.

      Mr. Alvah A. Clark, for the respondents.
   The opinion of the court was delivered by

Vroom, Jb

The bill was a creditors’ bill, and prayed that the real estate therein mentioned might be decreed to be answerable for the payment of the judgments of the complainants and that it might be sold under. execution as the properly of the defendant George Feller or that the described properties might be subjected to the lien of the said judgments.

There were two judgments, one obtained by the complainant Edward Kinsey on the 17th day of May, 1900, for the sum of $207.20, debt and costs, and the other obtained by the complainant the Plainfield Ice and Cold Storage Company on the 28th of June, 1896, for the sum of $264.54, damages and costs.

The aggregate amount of these judgments was by the decree declared and decreed a lien upon the properties, and the defendants were ordered to pay the complainants the amounts of their several judgments, and interest, together with the costs of suit, within thirty days after service óf a copy of said decree, and it was ordered that in default of such payment so much of said lands and premises as would be sufficient to raise and pay said judgments should be sold.

The real estate in question-consisted of three tracts of land in North Plainfield,- Somerset county. It is undisputed in the case that the first two tracts were originally conveyed to the defendant George Eeller in the years 1879 and 1880, and in 1881 conveyed to Mrs. Eeller, through an intermediate person, and that the conveyance for the third tract was made directly to Mrs. Eeller in 1885. The defendant George Eeller, at the time these conveyances were made, was solvent and free from debt.

The attack upon these conveyances is made by these complainants who both are subsequent creditors, and the burden then is upon them to show that at the time they were made there was an actual intent to hinder and defraud creditors. The law upon this subject may be said to be authoritatively settled in this state. It was held by this court in the case of Carpenter v. Carpenter’s Executors, 12 C. E. Gr. 502, that “to enable a subsequent creditor to impeach a conveyance made under these circumstances, it must be shown to have been made mala jide; its fraudulent character must be proved as a fact. And if the evidence does not lead to the conviction that there was a present purpose to contract future indebtedness, the payment of which was to be evaded or hindered, or some other fraudulent design to the injury of creditors or purchasers, then the conveyance will stand.”

And again in the later ease of Hagerman v. Buchanan, 18 Stew. Eq. 292, 296, the doctrine is stated with equal force. “The rule that has been recognized is that a voluntary settlement can be attacked by a subsequent creditor only upon the ground of the existence of an actual intent in the minds of the parties at the time of the execution of the conveyance to hinder, delay or defraud creditors by means of the deed.” See, also, Bouquet v. Heyman, 5 Dick. Ch. Rep. 114.

The theory of the learned vice-chancellor in establishing what he considered to be fraud in this case was that the husband was putting into property money that belonged to his creditors, and he was getting credit on the strength- of being the owner, and that he was taking money out of his business instead of paying his debts. It appears that Teller was in business and had carried it on from about the time of the first conveyance to Mrs. Feller until the year 1896, when he failed, and that his inability to meet his debts during the last three or four years of his business was due to his having lost upwards of $3,500 by bad debts. He had dealt with the complainant Kinsey upwards of eighteen years and had bought from him upwards of $1,000 worth a year. The indebtedness for which Kinsey had obtained the judgment was incurred after 1894, more than twelve years after the conveyances to the wife. From the evidence in the case no doubt can be raised as to his solvency both in 1881 and 1885, when the deeds in question were made. I am unable, after a careful examination of all the evidence, to see that it bears out the theory of the vice-chancellor or that the testimony presents any evidence of a purpose on the part of Feller to commit a fraud.

As was said by Mr. Justice Dixon in Carpenter v. Carpenter’s Executors, supra: “While the law requires that one should be astute in ferreting out the evidences of fraud, yet the law will not presume actual fraud. The evidences, when produced, must satisfy the judgment that it exists.” Now, the facts relating to the conveyance of the first two tracts to Mrs. Feller show that this conveyance was voluntary only so far as a part of the property was concerned. -In fact, Feller himself, in referring to the transfer of the two tracts to his wife, said that it was made because she had paid for the property, and her testimony satisfies me that the payments for the same were made out of her own funds, and that the mortgages given thereon were paid off by her and that she still owes, in part, for the moneys borrowed to make such payments.

That Feller made certain weekly payments to his wife, part of which her thrift enabled her to save, and that in addition to this she added to her fund for improvements the receipts from keeping. boarders, taking in washing and the sale of milk and chickens, does not alter the posture of affairs. That the husband could permit her to thus appropriate the proceeds of her labor seems to me clear, and is supported by a like position taken in Hagerman v. Buchanan, supra; Peterson v. Mulford, 7 Vr. 481; Luse v. Jones, 10 Vr. 707.

As to the property purchased in 1885, Mrs. Feller’s testimony that she herself paid the consideration therefor; that subsequently she built upon it and mortgaged it for $2,500, this encumbrance being still upon it, stands in the case without contradiction.

The difficulty with the calculations made by the court below as to the amount of money put into these properties by Mrs. Feller is that allowance was made only for the amounts estimated as having been contributed by her in cash and accounted for by her; all contributions, the result of her savings, rents and the receipts from her labor in keeping boarders, taking in washing and sales of milk, &e., were ignored. These must have amounted to a considerable sum and she expressly says all were applied by her to the payment for the lots and improvements. I do not deem it material to the disposition of this ease to examine in detail the several payments made by Mrs. Feller, nor can I concur in the estimate made by the vice-chancellor. It is sufficient, however, to say that from the facts proven and all the circumstances surrounding the transactions, no fraud is'shown, or can be inferred, which will affect the title to these properties.

Another feature of the case, however, calls for consideration. It was alleged by the complainant Kinsey that on one occasion he went to the Feller house and asked for payment of the moneys due to him, and that Feller then, in the presence'of his wife, said: “You needn’t be afraid of me, I have got this property.” Kinsey at first, in reply to the question as to whether Feller’s wife heard him say that, replied: “Yes, sir; she didn’t say nothing,” and subsequently he said: “I think she was kind of listening to what we were talking about.” Both Feller and his wife deny that such a conversation occurred, Mrs. Feller stating that she never heard her husband speak of the properties to Mr. Kinsey of anyone else. Giving to-the testimony of Mr. Kinsey its greatest force, independent of any denials, it leaves it a matter of very great doubt whether Mrs. Eeller heard the remark. But as was said in the case of Carpenter v. Carpenter’s Executors, supra: “Even if the strongest inferences of fact against her be drawn, they would not accomplish the end which the complainant seeks. Here was no actual pledge of the property to the payment of the debt to be contracted; no benefit accrued to the wife’s estate from the credit given; nothing that she did, or omitted to do, added credibility to her husband’s statement,” this court then holding that “a wife’s separate estate will not be charged with her husband’s debt merely because she stood by in silence while her husband represented himself to be the owner of such estate as an inducement to the creditor to give the credit, and by such representation deceived the creditor.”

I- do not think the conveyances to Mrs. Eeller were induced by any fraudulent intent to hinder and delay creditors.

The decree below should be reversed.

For reversal—The Chief-Justice, Van Syckel, Dixon, Collins, Eort, Garretson, Hendrickson, Krueger, Adams, Vredenburgi-i, Voorhees, Vroom—12.

For affirmance—None.


author: Per Curiam.

text:
    Joseph Frank et al., respondents, v. Clemmens Herold et al., appellants.
    [Filed March 20th, 1902.]
    On application for a rehearing of an appeal from a decree advised by Vice-Chancellor Pitney.

      Mr. James Q. Blauvelt, for the applicants.

      Mr. John W. Harding, contra.

   Per Curiam.

The appellants were adjudged guilty-'of a contempt, and were fined and sentenced to imprisonment íor a period of sixty days, by the court of chancery, for willfully violating a restraining order of that court. The appeal was dismissed, upon the ground that the proceedings were punitive in their character, taken solely for the purpose of vindicating the authority and dignity of the court, and were, consequently, not reviewable.

A rehearing of the matter is now asked for, because, as it is said, the court of chancery was without power to make the order appealed from, so far as it sentences the appellants to a term of imprisonment. This contention of the appellants is rested upon section 103 of the Chancery act (Gen. Stat. p. 392), which enacts:

“That to enforce obedience to the process, rules and orders of the court of chancery, where any person shall be in contempt according to the law, practice or course of the said court, he shall for every such contempt, and before he be released or discharged from the same, pay to the clerk in' chancery, for the use of this state, a sum not exceeding fifty dollars, as a fine for the said contempt; and the said person being in court, upon process of contempt or otherwise, shall stand committed and remain in close custody until the said process, rule or order shall be obeyed and performed, and until the fine so imposed for such contempt, w-ith the costs, be fully paid.”

This provision was enacted by the legislature June 13th, 1799 (Pat. L. of 1799 p. 434), and has ever since been upon the statute-book.

The argument is that, by.this legislation, the power which theretofore rested in the court of chancery of punishing for contumacious conduct, with respect to its authority or dignity, had been abridged, and that the only punishment which, since that enactment, the court has had power to inflict for such contempts is a fine of $50.

Whether or not, prior to the adoption of the constitution of 1844, the powers of the court of chancery were subject to be abridged by the authority of the legislature, it is not necessary, for the purpose of this case, to decide. Ackerman v. Taylor, 3 Halst. 306; S. C., 4 Halst. 69, are authorities in favor of the existence of such power in the legislature. Assuming the power to have existed, we do not think the statute has the scope Contended for by counsel for the appellants. The proceeding for contempt is of two kinds—first, purely for the purpose of punishing the contemnor, and second, as a method of affording relief inter partes. Dodd v. Una, 13 Stew. Eq. 714. The first clause of the statute declares that the purpose of its enactment is “to enforce obedience to the process, rules and orders of the court,” or, in other words, to regulate the procedure when pursued as a method of affording relief inter partes. This declaratory statement excludes üre idea that it was the legislative intent, by this enactment, to curtail or interfere in any way with the power, which had theretofore inhered in the court, of punishing contemptuous conduct in its presence, or with respect to its authority or dignity. The last clause of the statute, which provides that a person committed for contempt shall “remain in close custody until the said process, rule or order shall be obeyed and performed,” makes it manifest that the legislation is limited, in its application, to proceedings of the second kind only, and dpes not embrace those which are purely punitive in character. , ,

The application for a rehearing should be denied.


author: Pee Curiam.

text:
    Furman R. Willis et al., respondents, v. J. Herbert Jefferis et al., appellants.
    [Filed March 3d, 1902.]
    On appeal from a decree advised by Vice-Chancellor Eeed, whose opinion is reported in 51 Atl. Rep. 1110.

      Mr. David J. Pancoast, for the appellants.

      Mr. Howard Garrow, for the respondents.
   Pee Curiam.

We find the allegation of the appellants, that they were induced by fraudulent misrepresentations, made to them by the respondents, to enter into the contract which the respondents seek, by this suit, to compel them to perform, to be unsupported by the proofs. It is. therefore unnecessary to consider the soundness of the legal proposition, contained in the opinion of the vice-chancellor, that a person who has been induced to enter into a contract for the purchase of lands by the fraudulent misrepresentations of the owner thereof cannot, after accepting a deed therefor, take advantage of the fraud on a bill for specific performance filed to compel him to pay the purchase-money, if the fraud was discovered by him before such acceptance.

With the exception of this proposition, the correctness of which we neither affirm nor deny, we concur in the opinion of the vice-chancellor, and affirm the decree.

For affirmance—The Chiee-Just^je, Yan Syckel, Dixon, Garrison, Collins, Fort, Garretson, Hendrickson, Pitney^ Krueger, Adams, Yredenburgh, Yoorhees, Yroom—14.

For reversal—None.


author: Pee Cueiam.

text:
    Benjamin M. Beideman et al., respondents, v. Samuel W. Sparks, appellant.
    [Filed March 19th, 1902.]
    On appeal from an order advised by Yice-Ohancellor Grey, whose opinion is reported in 16 Dick. Ch. Rep. 226.

      Mr. George H. Peirce, for the appellant.

      Mr. John F. Flamed, for the respondents.
   Pee Cueiam.

The order in this case is affirmed, for the reasons given in the opinion of the'vice-chancellor.

For affirmance—The Chief Justice, Van Syckel, Dixon, Gabeison, Gummeee, Collins, Poet, Gaeeetson, Hendeiokson, Bogeet, Adams, Veedenbukgh, Vooehees, Veoom—14.-

For reversal—None.


text:
    Catherine Ellis et al., appellants, v. William H. Ellis, an infant, by Hannah Gallagher, his next friend, respondent.
    Testator died seized and possessed of a considerable estate, leaving a grandson, his sole descendant and the only child .of a son by his first wife, and also leaving a widow, to whom, by his will, he left his entire estate, with this provision for his grandson: “Hem. My son having departed this life leaving an only child of tender years, I have made provisions for. the care, support and education of the said child until his arrival at twenty-one years of age, leaving the entire charge and disposition of that matter, however, in the good judgment and discretion of my said wife, Catherine Ellis.” No other provision had .been made by the testator for the grandson.—Eeld, (1) that the estate of the testator in the hands of the widow was charged with the care, .support and education of the infant until he attained twenty-’one years of age; (2) that the court will-enforce this charge and fix the amount to be,appropriated for that purpose; (3) that the widow shall have the right to see to the proper expenditure of the sum .fixed by the court, and such rights will be in satisfaction of that part' of the provision giving her the charge and disposition of that matter.
    On appeal from a decree advised by Vice-Chancellor Pitnejr, who stated the following reasons therefor:

      The facts are that the testator, William H. Ellis, Sr., had an only child, William H. Ellis, 2d, who married a Miss Gallagher, and had by her one child, William H. Ellis, 3d, the infant complainant herein. The father of the complainant was the only child of the testator, and seems to have been a person of irregular habits, and did not long cohabit with his wife, but the result of the marriage was the birth of the complainant on March 7th, 1897, and at the time of the hearing he was four years old.
    The child, from its birth, was taken care of by its maternal grandmother, the guardian ad litem, and also guardian of 'the person and property of the infant complainant appointed by the orphans court of Hudson county, and as the result of some proceedings by the overseer of the poor a weekly payment of $2.50 was made to the overseer for the support o'f the child, and that money was paid to the maternal grandmother, Mrs. Gallagher, and such payments continued to the death of the son, the father of the infant, which occurred on March 30th, 1898. The grandfather died three weeks later, to wit, on April 18th, 1898, testate of a will as follows:

      “In the name of God, Amen. I, William H. Ellis, of the City of Hoboken, County of Hudson, and State of New Jersey, being of sane mind and memory and conscious of the uncertainty of this life, do make, publish and declare this to be my last will and testament in the manner following, to wit:

      “Item. I order and direct that all my just debts and funeral expenses be paid as soon as conveniently can be done after my decease.

      “Item. I give, devise and bequeath all my estate of every nature wheresoever situated unto my beloved wife Catherine Ellis, to her, her heirs and assigns forever.

      “Item. My son having departed this life leaving an only child of tender years, I have made provisions for the care, support and education of the said child until his arrival at twenty-one years of age, leaving the entire charge and disposition of that matter however in the good judgment and discretion of my said wife, Catherine Ellis.

      “Item. I hereby make, nominate and appoint my said wife Catherine Ellis the executrix of this my last will directing that she give no bonds for the performance of her trust, and I hereby revoke any and all former wills by me made.
    “In witness whereof, I have hereunto set my hand and seal this fourteenth day of April, in the year of our Lord, eighteen .hundred and ninety-eight.
    'William H. Ellis.'

      One payment was made by the testator after the death of the son, and received by Mrs. Gallagher. No payments were made after the death of the testator.
    He left a widow, who is his sole legatee and devisee. She was his second wife, and not the grandmother of the infant complainant. Demand was made upon her for the support of the child, and she offered the interest of $1,000 a year, which was declined. A suit was brought by the late Senator Daly, which slept until his death, when the present bill was filed by Mr. Besson.
    The mother of the infant has married again, and he has been taken care of and supported by his maternal grandmother.
    The estate left was admitted by the defendant at the hearing to be worth at least $9,600. Complainant’s counsel contended that it was much more than that, but that amount was finally adopted.
    Very little contest was made at the hearing over the construction of the will'. It was proven and conceded that no provision whatever for the support of his only offspring had been made by the testator, except the devise to his wife, the defendant, and the duty of the defendant under the will to provide for the support of the child was substantially admitted by her counsel. The only question was as to the amount of the support and the mode of its application.
    The maternal grandmother and the child were both in court, and were seen by me. The grandmother was a neat, wholesome-looking woman, manifestly of good habits, and the child was its own witness to its having been well taken care of, and its attachment to its grandmother was evident. No question was made as to the propriety of leaving the child with the grandmother. The defendant offered to take personal charge of the child and its rearing. But the whole matter, both of the amount of the allowance and the proper person to have charge of the infant, was left by defendant’s counsel to the court. Defendant’s counsel offered $2 a week. I thought that $2.50 was a moderate sum, and I was decidedly of the opinion that the grandmother Gallagher should have the personal care and charge of the infant, with the right of supervision by the defendant, and dictated the provisions of the decree at the moment, and for the arrears of about three years I allowed only $150.
    I have said that little or no contest was made at the hearing over the construction of 'the will. The fact that the estate devised to the defendant was charged with the support of the child was hardly disputed; nevertheless, I have given it consideration without, however, an examination of any of the authorities. The will itself contains a declaration that the testator had made a provision for the care,, support and education of his grandchild until his arrival at twenty-one years of age. It appears, with sufficient certainty, that he made none in his lifetime which would answer this declaration in the will; and by the will he gave the whole of his estate to his widow. It seems to me, then, that it follows that the provision for the child was included in the devise to the widow, and this view is strengthened by the fact that its application was confided to the widow. The result is a trust in'favor of the child. The only question is whether or not this court has a right to interfefe by reason of its general jurisdiction over the administration of trusts; and I am of the opinion that it has. I think that the case falls within the principle upon which the late chancellor dealt with the Bentley will, and his action in that matter was approved by the court of errors and appeals. Bentley v. Bentley, 38 Atl. Rep. 286; Bentley v. Dixon, 46 Atl. Rep. 689. I am unwilling to admit that it is within the power of this widow to say how much should be expended in the support of this child, without any supervision in that regard by this court. Granting that power, she might be satisfied with a wholly insufficient amount; and I think her disposition to dó so was illustrated in this case by offering the pitiable sum of the interest on $1,000 —say $50—a year for the support and maintenance of the child. I think that part of the will which leaves the entire charge and disposition of the care, support and education of the child to the good judgment and discretion of his wife is satisfied if she.shall have the opportunity to see that the money paid by direction of the court is actually used for the care, support and education of the child. Provision in that regard was made in the decree.

      Messrs. Lewis, Besson & Stevens, for the respondents.

      Mr. James F. Minturn, for the appellants.
   Per Curiam.

The decree appealed from is affirmed on the opinion above of Vice-Chancellor Pitney.

For affirmance—The Chief-Justice, Van Syokel, Garrison, Collins, Port, Garretson, Hendrickson—7.

For reversal—Dixon, Vroom—2.