text:
    Ida G. Shearman et al. v. Alpin J. Cameron, executor, &c., et al.
    [Decided December 18th, 1909.]
    1. Where a testator nominates his son as an executor, and also trustee of testator’s interest in a partnership in which the son is a partner, and it is the son’s duty, under the will, as executor, with the surviving partners, to determine testator’s interest in the partnership, and, as trustee, to agree with the surviving- partners as to the terms on which testator’s interest shall remain in the business for a given period, suit against the son by the beneficiaries under the will for discovery and accounting is properly brought in chancery, and is not barred by an accounting by the executors in the orphans court.
    2. On balancing the books of a partnership of three members, it appeared that the liabilities of a former firm taken over by the existing firm exceeded the assets so taken over by a certain sum, and that sum was thereafter carried into its suspense account and never paid.—Held, that, in ascertaining the interest of a deceased partner, it was proper to charge that interest with one-third of such amount.
    3. In ascertaining the interest of a deceased partner in the firm, an amount due one of the surviving partners by the deceased partner should not be deducted from the amount of the latter’s interest, as in ascertaining such interest nothing can be deducted except an indebtedness to the firm.
    4. Where executors of a deceased partner report to the orphans court a specified amount due from the firm, which is the total aggregate, less items, among which is a charge of a certain amount in favor of decedent’s son, who was also a partner, and there was nothing in the account to show that the son, as an individual, claimed to be a creditor of the father’s estate, the orphans court in approving the account did not pass upon the question whether the indebtedness to the son was a proper charge against the father’s interest.
    5. Where a partner by his will appoints his son a trustee of his interest in the partnership, and directs his executors to at once, upon his death, pay to his daughter an amount not exceeding $1,000, for her immediate support, to be taken out of his interest in the partnership, and the executors’ account filed in the orphans court showed that up to a date specified they had paid the daughter $704.40, and the trustee’s account, filed in the chancery court, claims credit as if the daughter had received $1,000, the trustee is only entitled to a credit for $704.40.
    6. Where the will of a deceased partner directed the trustee of his interest in the partnership to pay quarterly “from and after my death” certain annuities out of the income, the annuities should be paid from the date of his death, although by the terms of the will his interest in the partnership was to be determined as of a date three months subsequent to the date of his death.
    7. If a trustee invests money in unauthorized securities, the eestui que trust is entitled to the profits; and where a partner leaves his interest in the partnership by will to another partner in trust, and directs that such interest remain in the business for a specified time from a certain date next succeeding his death, on such terms as the trustee may think just, and after that date to be invested according to the trustee’s best judgment, and the trustee allows the interest to remain during the five-year period at an agreed rate of ten per cent., if the trustee allows the trust fund to remain in the partnership after the period specified, he should be held to account for it at the same rate.

      S. Where a son is executor of the estate of his mother, and receives a certain sum from the sale of property held jointly by the father and mother, which amount is charged to him as executor, and he permits his father to take and keep the money, and he is subsequent!}’ appointed executor of his father’s estate, it is proper for him to charge such amount against the father’s estate.
    9. Where a testator leaving real estate dies after May 20th within any given year, his personal estate is chargeable with the payment of taxes assessed as of May 20th of that year.
    10. An interest of a deceased partner was continued in the business at an agreed rate as to profits.—Held, that no charge should be made against the executors, the surviving partners, or the trustee appointed by the deceased partner’s will to hold his interest in the business on account of the good will, as such interest continued to receive the benefit of the good will.
    Heard on bill, answer, replication and proofs in open court.
    The complainants in this bill are grandchildren of Alexander J. Cameron, who, during his lifetime, was a resident of Ridge-wood, in this state. He died on the 30th of September, 1891, leaving him surviving a daughter, Mary Jane Crowley; a son, Alpin J. Cameron, one of the defendants herein; a daughter, Alice E. Cameron; Ida G-. Graydon (now Shearman), Carrie L., Alexander J., J. Alpin and Jessie M. Graydon, children of a deceased daughter; Agnes K., Alexander A., Alice A. and Kathleen Maxwell, children of a deceased daughter; Alpin W. Cameron, son of Alpin J. Cameron aforesaid; and Daniel C. and Mary C. Crowley, children of Mary Jane Crowley.
    He left a last will and testament, dated the 10th of March, 1891.
    The eighth clause of the will is as follows:
    “Whereas, I am a partner in the firsm of A. J. Cameron & Co., which consists of ’my son Alpin J. Cameron and William V. Denegre and myself, we being equal partners, now I do hereby give, devise and bequeath all my interest in the said firm and in the assets and business thereof, whether real or personal, unto my son Alpin J. Cameron of the City, County and State of New York, in' trust, however, and to, for and upon the following uses, trusts and purposes, that is to say:
    “In the first place, I desire that my executors shall take out of the business of the said firm, or out of my share thereof, such moneys as may bq necessary to pay my debts, funeral and testamentary expenses, and at once upon my death to pay to my daughter Alice E. Cameron, if she desires it, an amount not exceeding the sum of one thousand dollars, so that she may have in her hands without delay the pecuniary means necessary for her immediate support.
    “I direct my executors to take from my share of the firm the sums necessary to pay the above named three legacies to the hospital and churches within one year after my death.
    “In the second place: I wish my said executors with the surviving partners of the said firm to determine and ascertain my interest in the said firm upon the thirty-first day of December next succeeding my death, and I direct that that interest thus determined shall remain in the possession and management of the surviving partners of the said firm for a period of not over five years from and after the thirty-first December next succeeding my death, my said trustee making such equitable terms and arrangements as to the share of my estate in the profits of the said business as he may think just and. reasonable. In the third place, I direct that upon the expiration of the said five years my estate shall be severed from the said firm, and shall thereafter when paid (my executors and the said surviving- partners having a reasonable time to effect such severance and payment) be and be kept safely and securely invested by my said trustee according to his best judgment together with any accumulations of profits of my share during the said term, or before.
    “Out of the income arising from my share of the firm profits or from the said fund my said trustee shall pay quarterly from and after death to my daughter Mary Jane Crowley during- her life, the sum of six hundred dollars per annum, and to my daughter Alice E. Cameron during her life, the sum of three thousand dollars per annum besides said one thousand dollars if she requires it, and at the expiration of the said five years or as soon thereafter as my said executors and the surviving partners can separate the share of my estate from the said firm and pay it to my said trustee, I direct that the whole income shall, subject only to the said annuity to my daughter Mary Jane Crowley, belong absolutely to my daughter Alice E. Cameron for and during- the term of her natural life, my trustee collecting and paying to her the whole of the income less the said annuity to my daughter Mary Jane Crowley and the expenses of the said trust, and upon the death of my daughter Alice E. Cameron I direct that my said trustee shall pay to my said daughter Mary Jane Crowley the sum of ten thousand dollars and upon such payment her said annuity shall cease.”
    The clause then proceeds to vest a power of appointment in Alice E. Cameron, and to make other provisions which, in view of the circumstances, are not material.
    Alpin J. Cameron and Alice E. Cameron were nominated as executors of the will.
    The executors qualified and filed an account as executors in the office of the surrogate of the county of Bergen, in June, 1899. The bill charges that this is a partial account and is incomplete, and that a certain schedule therein referred to as being attached was not attached; and that in the said account there was a statement that the schedule aforesaid fixed the balance to the credit of Alexander J. Cameron in the firm of A. J. Cameron & Company at $37,741.63, and that the complainants never saw the schedule aforesaid and never received any notice of the filing or passing of the account in the orphans court.
    The bill proceeds to charge that Alexander J. Cameron was, at the time of his death, a member of the firm of A. J. Cameron & Companj-, and that the other members of the firm were Alpin J. Cameron and William P. Denegre, the three being equal partners; and that after the death of Alexander J. Cameron, the surviving partners continued the'business in the old firm name until the present time. And it is charged that the executors and surviving partners did not determine and ascertain the interest of Alexander J. Cameron in the assets and business of the firm upon the 31st day of December next succeeding his death, which was December 31st, 1891, as they should have done in pursuance of the terms of the said will; and that the ten per cent, per annum which, by the account as filed in the orphans court, was allowed upon the balance which that account found to be to the credit of Alexander J. Cameron in the business of A. J. Cameron & Company, was not a just and equitable arrangement as to the profits of the said business which should be attributed to the share of the estate of A. J. Cameron therein, as provided for in the said will.
    The bill proceeds to charge that the interest of A. J. Cameron, in the firm of A. J. Cameron & Company, upon the 31st day of December next succeeding his death, was greatly in excess of the amount shown in the account filed in the orphans court by the executors, which, it will be recalled, was $37,741.63; and that the said interest of Alexander J. Cameron, or his estate, in the said business has remained, from the time of his death to the time of the filing of the bill, in the said firm without any severance and investing, as required by the terms of the will.
    The bill further charges that Alice E. Cameron died on the 6th of May, 1905, leaving a last will and testament in which she attempted to exercise the power of appointment vested in her by the will of Alexander J. Cameron as above mentioned.

      The bill further charges that the complainants have not the knowledge concerning the interest of Alexander J. Cameron in the business of A. J. Cameron & Company at the time of his decease, and require discovery.
    The bill further charges that Alpin J. Cameron, the executor and trustee, has paid to Mary Jane Crowley and to Alice E. Cameron more money than it was proper for him to pay under the terms of the will and the trust. And it is further charged that Alpin J. Cameron, the trustee as aforesaid, and William P. Denegre, the partner, have refused to disclose to the complainants information concerning the business and the shares and the interests of the estate in the business, and that no proper and legal accounting can be had without the aid of discovery in behalf of the complainants.
    It is therefore prayed that discovery be made by Alpin J. Cameron and by William P. Denegre, and that the interest of the estate in the firm of A. J. Cameron & Company be ascertained and determined in accordance with the provisions of the will, and that, when ascertained, it shall be severed from the business of the firm, and that the said interest, and such profits as shall be legally found to be due with respect thereto, shall be accounted for by the said Alpin J. Cameron as trustee, and shall be distributed in accordance with law and the provisions of the will.
    The answer of Alpin J. Cameron admits many of the charges in the bill, but maintains that the accounting in the orphans court was final, and states that the actions of the said defendant as executor and trustee were regular and legal, and that the complainants are not entitled to relief in this court, and that the defendants should be dismissed therefrom.
    The will of Alice E. Cameron, in which she sought to exercise the power of appointment aforesaid, came before this court and was passed upon in the case of Cameron v. Crowley (Vice-Chancellor Garrison, 1907), 65 Atl. Rep. 875. Under the decision in that ease all of the grandchildren, among whom are the complainants, are cestuis que trust in this matter.

      Mr. Marshall Van Winkle, for the complainants.

      ' Mr. Cornelius Doremus and Mr. Gilbert Collins, for Alpin J. Cameron, trustee.

      Mr. William Pennington, for Mary J. Crowley, Daniel C. Crowley and Mary C. Crowley.
   Garrison, Y. C.

The first matter that required consideration was whether this was a proper case for this court to exercise its jurisdiction.

It seemed to me that it clearly was.

With respect to the subject-matter involved, the defendant Alpin J. Cameron was by the testator left in such a delicate position that the interposition of the court of chancery, under the circumstances, was practically imperative. Alpin J. Cameron, the son of the testator, was one of the executors of the will. He was one of the partners in the firm in which the testator had a very large investment, and he was also to be trustee of the interest of the testator in the said firm. Under the provisions of the will it became Ms duty, as one of the executors, to agree with himself, as one of the partners, what the interest of the testator was in the firm, and then, as trustee, to make with himself, as one of the partners, such equitable terms and arrangements as to the profits which should be allowed upon the share of the estate in the said business. His duties and interests as surviving partner, executor and trustee were such that a case was clearly made out for the court of chancery instead of leaving the matter for settlement in the orphans court. The necessity of discovery, the necessity of bringing the surviving partners before the court as parties, the need which the complainants had of the peculiar features of equity jurisdiction which are lacking in the orphans court in such a case, all made for establishing the special reasons which appeal to the jurisdiction of this court and induce it to take over the matter from the orphans court.

In my view the principles are so well settled and this case so clearly conies within them that it is unnecessary to elaborate. The authorities will be found collected in the court of chancery and the court of errors and appeals in the case of Filley v. Van Dulce (Vice-Chancellor Garrison, 1908), 74 N. J. Eq. (4. Buch.) 219; (Court of Errors and Appeals, 1909), 75 N. J. Eq. (5 Buch.) 571.

The technical objection interposed by the defendant that the accounting by the executors in the orphans court would bar-relief in this court is without merit. Under the will the trustee had cast upon him the duty of securing the interest of the testator in the business of A. J. Cameron & Company, and it is that trustee who is sought here to be brought to account. I do not think it possible that, because as executor he filed an account in the orphans court and stated the amount which he said had been ascertained as the interest of A. J. Cameron in the business aforesaid, this is conclusive upon the parties. In my view it is perfectly clear, under the circumstances of this case, that what that interest was must be ascertained and settled in this court upon equitable principles.

Upon determining that this court would assert its jurisdiction an interlocutory decree was then entered by which it was ordered that the defendant Alpin J. Cameron, as trustee, should make and render an account in this court of the estate bequeathed to him in trust, less the debts, legacies and testamentary expenses directed by the testator to be paid thereout, as such debts, legacies and testamentary expenses have been established by the accounting of the executors in the orphans court of Bergen county and the decree of the said court on the said accounting, and should further account for such income on the balance as said trustee may be lawfully chargeable with from and after the death of Alice E. Cameron. The matter was referred to a master, and the trustee was directed, within a given number of days, to present to the master his account, to which any party might present written exceptions to the master, and thereafter either party might apply to the court for directions as to the scope of the testimony that should be required or permitted under the exceptions. Various such applications were made to the court, and directions and instructions issued in pursuance thereof. By an agreement between the parties expert accountants were employed to investigate the books of A. J. Cameron & Company, and they made an extensive report which accompanies the master’s report.

■ The master’s report and the exhibits, including the report of the expert accountants aforesaid, cover many hundreds of pages. Upon the coming in of the master’s report exceptions were filed by each of the parties thereto, and since, with respect to some of them, the court desired to send the matter back to the master, all questions were reserved until the coming in of the supplemental report of the master. When that supplemental report came in all of the exceptions of the parties were considered and are now to be disposed of.

. The accounts and report are so voluminous, and the questions raised are of such a character- that, I think, in the interest of clearness, I should state the issues and findings and my determination thereon in narrative form, rather than attempt to take them up piecemeal under specific exceptions.

Prior to 1880, Alexander J. Cameron and Alpin J. Cameron were partners in a firm called A. J. Cameron & Company. W. P. Denegre was an employe of that firm. On the 1st day of January, 1880, a new firm was formed composed of Alexander J. Cameron, Alpin J. Cameron and W. P. Denegre, using the same firm name.

We have no books of the old firm. The books of the new firm, under an account headed “Old Books,” began with two items. They charge themselves with liabilities, under date of January 1st. 1880, “to sundries, $68,563.08.” They credit themselves as with assets, under the same date, “by sundries, $58,499.48.”

There is no item showing anything to the credit or debit from the old books in the individual accounts opened with Alexander J. Cameron or with Alpin J. Cameron, but under date of January 1st, 1880, Denegre’s account opens with a credit “by old ledger, 249, p. 3, $11,063.49.”

The details of the items of the “old book” account set forth above appear in a journal then opened, and that journal account does not- contain any items concerning the individual accounts of the partners, excepting the $11,000 item above alluded to, credited to William P. Denegre.

With respect to the matter of determining and ascertaining the interest of Alexander J. Cameron, the testator, in the firm of A. J. Cameron & Compan}7, which, under the eighth clause of the will, the executors with the surviving partners were to do, the facts proven are as follows :

Some time in the year 1892, and after the books had been made up as of December 31st, 1891, a brother of Alexander J. Cameron, named Allan Cameron, was requested to come to the office of the firm and go over the books, and he did so, and ascertained, in conjunction with the surviving partners, that the interest of Alexander J. Cameron in the firm of A. J. Cameron & Company, as shown by those books, was $48,306.56, and that certain deductions should, in his judgment, be made therefrom.

Subsequently, and on the 8th day of November, 1893, Alpin J. Cameron desiring to have this in writing, requested that Allan Cameron reduce it to writing, and he did so, the writing being as follows:

“New York, November 8tb, 1893.
“Mr. Alpin J. Oameron, in account with the Estate of Alexander J. Cameron.
Dec. 31st. Bal’ce to credit of Alexr J. Cameron on books of
A. J. Cameron & Co. this date................ $48,306.56
Less his 1-3 deficiency of $6,887.87.....$2,295.95
Due Alpin J. Cameron as per old books
Dec. 31, 1881...................... 8,268.98
- 10,564.93
Actual balance due Estate of Alex J:
Cameron .................................. $37,741.63
“The above account is taken by me from the books of A. J. Cameron & Co. and submitted to Alice E. Cameron for approval and which accts and Bal’ce of $37,741.63 I find to be correct.
“Allan Cameron.
“New York, Nov’r. 8th, 1893.”

Shortly after the death of Alexander J. Cameron (which occurred on the 30th of September, 1891), a new book was opened termed “Private Ledger,” and this book starts with the credit to Alexander J. Cameron (or his estate) of $48,306.56. The first item against this sum is $2,295.95. This item is the one mentioned in the memorandum of Allan Cameron as “less his 1-3 deficiency of $6,887.87 = $2,295.95.”

The first ledger opened by the new firm, in the account headed “Old Books,” as aforesaid, started, as has been stated, with sums of debit and credit. Erom an inspection it will appear that the debits exceeded the credits by something over ten thousand dollars. Sundry additions are made to each side of the account, and on the 31st of December, 1882, the account is balanced. At that time, as appears from the account, there was an excess of liabilities over assets of $6,887.87—in other words, the firm was $6,-687.87 short of making these two accounts balance, and this was distributed among the partners as a loss, upon the basis of one-third each.

In the private ledger the one-third above mentioned is charged against the account of A. J. Cameron, or the estate of Alexander J. Cameron, deceased, and thereafter the income on the amount of the interest of Alexander J. Cameron in the firm was calculated upon a total reduced by this sum.

In 1899, on the 1st of June, the executors of Alexander J. Cameron, deceased, filed in the orphans court of Bergen county an account. After stating that no inventory was taken, having been waived by the heirs, they charge themselves with some small amounts of cash, and then with the following item:

“1892.
Jan. 1. To balance to credit of Alexander J. Cameron in tlie firm of A. J. Cameron & Co. Yarn Merchants of New York and Philadelphia, of which firm Alexander. J. Cameron was a member. This balance was determined at the request of the Executors, by Allan Cameron of Westford, Mass., brother of Alexander J. Cameron. See Allan Cameron’s statement accompanying this account................................. 837,741.63”

The next item under it is as follows:

“The above interest of Alexander J. Cameron was invested with A. J. Cameron & Co. with the understanding that A. J. -Cameron & Co. would pay for five years or longer at rate of 10$ per annum on balance of the account.”

Items then appear calculating ten per cent, on $37,741.63 or less (the lesser sum or principal being arrived at by deductions therefrom with which we are not now concerned).

On the private ledger aforesaid there was no deduction of any other sum, initially, than the $2,295.95 above referred to. The $8,268.98 above referred to is not found in the private ledger, and, in fact, is not found in any of the books of account produced.

The careful examination made by the experts agrees so substantially, as to the interest of Alexander J. Cameron in the business as of December 31st, 1891, with the result reached by Allan Cameron, that I shall adopt the result reached by , the latter, and fix the initial figure of such interest at $48,306.56, as he did.

I do not think there can be any substantial dispute about the propriety of deducting from this sum the item of $2,295.95 above referred to. That sum is the one-third of the sum of $6,887.87, and this last sum is the difference between the credit and debit sides of the “old books” account above referred to. When the new firm started in 1880, the first thing that appears in their books was this account. It was taken over, evidently, from the old firm, and contained amounts to be paid and amounts to be received, which were placed under their appropriate columns in the account. Subsequently, this account was balanced, and it was shown that the liabilities thereunder exceeded the amount received by $6,887.87; and as the partners shared profits and losses equally, each partner was liable for his one-third of this sum. After the time of balancing, as aforesaid, this item of liability was carried into suspense account, and was never paid. Under these circumstances, it seems perfectly clear to me that it was proper, in ascertaining the interest in the firm' of this partner, to charge him with his one-third of this liability.

The next item which it is necessary to consider at length is that of $8,268.98.

The theories of the respective parties concerning this are as follows: The complainants contend that, since the ascertainment and determination by Allan Cameron, as now confirmed by the investigation of the experts, show that the interest of Alexander J. Cameron in the firm at the time in question was $48,306.56, the matter is practically settled, and there is.no ground upon which the defendant may properly claim the right to deduct this sum from that initial ascertainment and determination of the amount of the corpus.

By referring back to the memorandum made by Allan Cameron at the time of the ascertainment by him, it will be found that he states the matter as follows: “Due Alpin J. Cameron as per Old Books, Dec. 31, 1881, $8,268.98,” and it will be seen that he includes this sum as among those to be deducted from the aggregate sum which he finds to be the interest of Alexander J. Cameron in the business as of December 31st, 1891.

The complainants contend that if this was,a debt due from Alexander J. Cameron to Alpin J. Cameron, it should have been treated as such, and should have been proven, and that the whole subject-matter being open to inquiry, and no proofs being adduced by Alpin J. Cameron to sustain the same, there is no basis for allowing it.

On behalf of the defendant Alpin J. Cameron it was urged that since this item was deducted by Allan Cameron that fact is determinative; and further, that since the amount reported by the executors in their account to the orphans court was the total as found by Allan Cameron, less this deduction, the reduced amount thereby becomes the initial charge against the trustee, and this item of $8,268.98 must be held to have been passed upon and allowed at that time.

I do not see how it can be seriously contended that in any ascertainment of the interest of Alexander J. Cameron in the firm there could be any propriety in diminishing what the books showed was his interest by this sum of $8,268.98. It cannot possibly be correct to say that a partner’s interest in a firm is affected favorably or unfavorably by sums which he owes, outside of the firm’s business, to his partners, or by sums which, outside of the firm’s business, are owed to him by his partners. His interest in the firm’s assets, as shown upon an accounting, is utterly irrespective of what is owed to him by anyone excepting the firm, or by what he owes to anyone excepting the firm, and in this respect it makes no difference whether the amounts that he owes outside of the firm are to his partners or to strangers, or whether the amounts due to him outside of the firm are due from partners or strangers. The amount in question was certainly nothing that was owed by him by reason of the partnership relation. There is not the slightest suggestion in the testimony, or in any of the books, that this $8,268.98 had any connection, whatever with the business of the firm with which wo are concerned—that is, the firm composed of the two Camerons and Denegre, which was formed January 1st, 1880.

The only serious argument of the defendants upon this point was based upon this reasoning: That apparently there were some transactions between Alexander J. Cameron and his son Alpinj probably in connection with the old firm (the suggestion arising, undoubtedly, out of the fact that there is mention made of the "old books”), and that, as a result of these transactions, there was a credit in favor of the son against the father of this item of $8,268.98, and that when Allan Cameron came to make his determination and ascertainment of the interest of Alexander J. Cameron in the business, he considered that this debt, which he believed to be due and from the father to the son, should be deducted before the son, as executor or trustee, should be charged with the corpus of the estate to be so held by him. And, therefore, they say, when the total amount of the interest was arrived at, Allan Cameron, in his statement, deducted from such total' items, among them this one, which, as therein set forth, was for a debt due by the father, the testator, to the' son, the executor and trustee.

Bj' referring back to the item reported in the account of the executors to the orphans court, it will be found that the amount there stated to be due from the firm to the estate is $37,741.63 (which is the total aggregate, less items including the item of $8,268.98 that we are inquiring about), and that there is memorandum, "see Allan Cameron’s statement accompanying this account.” The complainants allege, and, I think, prove, that this statement did not accompany the account, and could not be found in the surrogate’s office. However this may be, there was nothing in this account to show that Alpin J. Cameron, as an individual, claimed to be a creditor of the estate of Alexander J. Cameron, of which he was one of the executors, to the amount of $8,268.98. And under these circumstances I do not think that it can be properly held that the orphans court passed upon this question at all, even technically. There is no pretence that it actually passed upon it—that is, that the matter was in any such way exhibited before the orphans court that it can honestly be said by anyone to have considered and passed upon the propriety of allowing this debt claimed to be due by the executor out of the estate of the decedent.

In my view of this case, as before expressed, it is undoubtedly the right of this court, under all the circumstances, to now ascertain and determine what amount the trustee shall be charged with as the corpus of the estate for which he is responsible, said corpus to consist of the interest of Alexander J. Cameron, his decedent, in the business of A. J. Cameron & Company as of December 31st, 1891.

In this view of the matter this item cannot be allowed as a deduction.

Excepting the reference to it contained in the memorandum of Allan Cameron, which the defendant Alpin J. Cameron produces at the trial, there is no other proof or suggestion of proof concerning it. No old books are produced in which any such item appears, and no oral testimony is produced to prove any such item. Alpin J. Cameron himself was utterly unable in any way to prove anything upon which any proper finding in his favor with respect to this item could rest.

Since I do not find that it was proper at all to consider this item in connection with the interest of Alexander J. Cameron in the firm of A. J. Cameron & Company, since it had no connection with his partnership account at all, I find that Allan Cameron’s including it in his statement is immaterial; that he should not have included it, and that no one is bound by the fact that he did include it.

Finding, as I do, that the real question is whether this item is one that Alpin J. Cameron has the right, as against the estate of his father, to charge against the latter, and that he has not produced any proof whatever to justify crediting him with the same, it would not be proper to do so, and; therefore, I find that the initial credit of $48,306.56 should be reduced by the $2,-295.95 before dealt with, but not by the $8,268.98 just dealt with.

The result, therefore, is that we have ascertained and charged the trustee with the proper corpus of the estate, subject, however, to certain other deductions, the propriety of some of which is not questioned by anyone, and the propriety of others being the subject of attack concerning which this opinion will be found to deal.

It will be recalled that, after the ascertainment provided for in the will was made, the will directs that the trustee shall arrange for an equitable and just return upon this interest, which is to remain in the business for a period not exceeding five years. The arrangement made was that ten per cent, interest should be allowed upon the ascertained interest of A. J. Cameron’s estate remaining in the firm. At first the complainants contended that this was not a just and reasonable amount to allow out of the profits. Subsequently, they conceded that it was, and all contest over this matter was abandoned before the master and before me. Therefore, it is settled in this case that ten per cent, upon the ascertained interest of the decedent in the business was proper, and all calculations are made upon that basis.

With respect to the question of payments out of income to Alice E. Cameron, a question arose by reason of the language of the will, but it seems to me that the matter is perfectly plain when carefully considered. It will be found, by referring to the clause of the will quoted in the beginning of this opinion, that the testator provides, among other things, that the executor shall take out of the business of the firm, or out of his share thereof, such moneys as may be necessary to pay debts, funeral and testamentary expenses, and at once, upon his death, to pay to his daughter Alice, if she desires it, an amount not exceeding the sum of $1,000, Avhicli, as he sets forth, was for the purpose of putting into her hands without delay the pecuniary means necessary for her immediate support. It appears from the proofs and from the accounting of the executors filed in the orphans court that up to December 31st, 1891, the executors had paid to Alice E. Cameron $704.40. In the account filed in this court by the trustee, the latter, under date of December 17th, 1891, has two items as follows:

"Alice E. Oameron, Account of annuity 3 months at
$3,000 per year............................ $750.00
“Alice E. Cameron, Legacy..................... 1,000.00”

1 am clearly of opinion that, in the light of the portion of the will just above referred to, the trustee is onfy entitled to credit for the $704.40 on account of the $1,000 legacy, and that such $704.40 should come out of the corpus of the estate, as that was clearly the intention of the testator as above stated.

It will be found that he provides that out of the corpus she is to have an amount “not exceeding $1,000, if she desires it.” All that she desired—or, at least, all of such desire that they responded to—was to the extent of $704.40; and that is the only sum that the accountant is entitled to allowance for with respect to this $1,000 legacy.

With respect to the time when the income is to be paid, I find as follows: While the will provides that the ascertainment of the amount of interest that the testator had in the business shall be determined as of December 31st succeeding his death, and that then the allowance of profits thereon shall be made, it is proper, under the law applicable here, to commence the income to the annuitants from the date of the death, namely, September 30th, 1891. The will itself provides upon this subject as follows: “Out of the income * * * my said trustee shall pay quarterly from and after my death,” &c.

It will be recalled that, under the will, $600 of income each year was to be paid to one daughter, Mrs. Crowley, and $3,000 to the other daughter, Alice E. Cameron, and that this was to continue for five years from the 31st of December, succeeding his death, which was 1891.

The trustee’s account showed that during these five years much more than these sums of money were paid out to Mrs. Crowley and to Miss Cameron by the trustee. This he had no right to do, and the accounts must be so adjusted as to comply with the requirements of the law in this respect.

Tinder the directions of the court the master has stated the accounts as the court finds that he should in these particulars. He has first ascertained the interest of Alexander J. Cameron in the firm of A. J. Cameron & Company, as of December 31st, 1891. He has then deducted the one-third of the liability which, as I have before stated, I find proper to be deducted, and the debts, funeral and testamentary expenses as provided by the will, and certain other items which need not be specifically referred to; and has thus reached what 1 should refer to as the "primary corpus"—that is, the sum upon which the allowance of profit or income is to be calculated, such profit or income, as before stated, being properly fixed at ten per cent. From the date of the death, and for the five-year period, the accountant is credited with $3,GOO a year, being the $600 of annuity to Mrs. Crowley and the $3,000 of annuity to Miss Cameron. After the five-year period, he is credited with the total income on the corpus, because after that period the entire income was payable to Miss Cameron. After Miss Cameron’s death he is to be credited with $10,000 out of the corpus, which was payable to Mrs. Crowley. After that sum is deducted a new sum is reached as the corpus, and during the time that that continued in the business, unsevered, he is chargeable with the ten per cent, as agreed upon.

With regard to the matter of the allowance of interest as against the trustee, and when the ten per cent, as the fixed amount of profits allowed on the corpus shall cease, my findings are as follows: All the books that were furnished by the trustee to the court bring the account no further down than December 31st, 1906, and, consequently, all calculations cease there. On November 13th, 1906, an order was made in this cause under which the trustee brought into this state and deposited $20,500 at three and one-half per cent, interest, and it was stipulated between the counsel for the respective parties that, as to so much of the estate chargeable against the trustee, the proper allowance of interest against the trustee is the sum of three and one-half per cent., which, as above stated, was the amount received by him on that sum.

With respect to the amount of corpus with which the trustee is found to be chargeable, over the sum of $20,500, I find that he should be charged with ten per cent, interest thereon.

So far as appears from the proofs, he has retained this sum (in excess of $20,500) in his business, and I see no reason why, while it is there, it should not receive the same allowance for profit as it always did receive from the time that it was first left in the business under such an arrangement as to profits.

lt is not necessary to cite authorities to establish the proposition that if a trustee invests money in an unauthorized security and makes profits, the cestui que trust are entitled to the profits thus made on their corpus.

Since it does not appear that there was any severance as provided for by the will, this rule applies to the trustee, and the ten per cent, on such excess of the corpus over $20,500 should have charged upon it, as against the trustee, ten per cent, interest.

Among the items passed upon by the orphans court and allowed in favor of the executors of Alexander J. Cameron was one of $1,500. Since, under my instructions, the master was to allow all of the debts, funeral and testamentary expenses, and take them out of the corpus, this item was, among others, deducted in the ascertainment of the primary corpus. The propriety of this allowance in favor of the trustee is challenged by the complainants, and the facts and my findings with respect thereto are as follows:

In the account filed by the executors of Alexander J. Cameron’s estate in the orphans court on the 1st of June, 1899, and duly passed by the decree of that court, they claim credit, among other things, for an item as follows:

“Cash. Estate of C. C. Cameron, being amount collected by Alexander J. Cameron from sale of real estate in Boston, Mass. Voucher 7.....$1,500.00”

This, together with all the other items for which the executors claim credit, were passed upon and allowed by the orphans court. The complainants now produce an account from the orphans court of Bergen county in the matter of the estate of Catherine C. Cameron, of which estate Alpin J. Cameron was the sole surviving executor. And in that account, under date of June 3d, 1899, there is, among the items with which the executor charges himself, the following:

“Proceeds of sale of property in Boston. Mass., beld jointly by A. J. and Catharine C. Gameron
$1,500.00”

The argument of the complainants upon this point was that by this last-mentioned account Alpin J. Cameron showed that he had received this $1,500 as executor of his mother’s estate, and therefore, of course, had no right to charge the same $1,500 against his father’s estate. There could be no doubt about this if these were the facts: But I do not find that the proofs produced before me show that these were the facts. It is true that they show that when he was accounting as executor of his mother’s estate he charged himself (as, of course, he should do) with whatever, as executor, came to his hands, or that for which he was responsible. Since; under the proofs, it is shown that he was responsible for the proceeds of the sale of his mother’s property, and had permitted his father to take and keep the money, it was, of course, proper for him to charge himself with this $1,500 for which he was thus responsible. But the proofs do not show that he ever actually received the money from his father—in fact, they prove that he did not. Therefore it was entirely proper for him, as against his father’s estate, to claim the $1,500 which his father owed to him as executor of his mother’s estate.

Since this matter was included in the items of charge and discharge before the orphans court in the settlement of the estate of the father, Alexander J. Cameron, and was passed upon there in favor of the executors, and since I find that it was properly allowed, I have instructed in this suit that it be included among the items to be deducted from the amount ascertained to be the interest of A. J. Cameron in the business of A. J. Cameron & Company in accordance with the provisions of the will.

The complainants object to the allowance out of principal of taxes for the year 1891, claiming that the same'was a lien upon the real estate, and should not be charged against the personal property account of the estate. I find that, under the law, where a testator leaving real estate dies after the 30th of May of any given year his personal estate is chargeable with the payment of the taxes which are assessed as of the 30th of May of that year. Brown v. Brown (Vice-Chancellor Garrison, 1907), 72 N. J. Eq. (2 Buch.) 667. The item or items in question, therefore, are properly deducted from the principal or corpus.

hTeither the master nor this court have allowed anything as against the trustee, the executors or the surviving partners on account of the good will of the business of A. J. Cameron & Company. This is in accordance with the view which I take of this case, and because I do not find it proper in this case to make any such allowance. I shall not stop to burden this already long opinion with any reference to the authorities concerning the good will of the business in which a decedent was interested at the time of his death, because I think such law inapplicable to the case in hand. All of the interest of Alexander J. Cameron in the business of A. J. Cameron & Company has been, down to the filing of the bill -in this suit, continued in the business, and an account which it has been agreed is a fair amount as that interest’s share of the profits of the said business has been allowed on it, and such allowance (excepting with respect to an amount which the complainants themselves required to be taken out) has continued down to the time of decree.

Of course, since the death of Alexander J. Cameron the firm has lacked his personal efforts, and has made what has been agreed upon all hands to be a fair allowance of profit for the amount which his estate had invested in the business. Under these circumstances, I do not think that it would be proper to hold that, in addition thereto, an allowance in favor of the estate should also be made for good will. Since I find that, under the circumstances of this case, the decedent’s interest in the firm has received the benefit of the good will, which would otherwise be attributable to his share, I conclude that no further or other allowance should be made specifically therefor.

With-respect to the complainants’ objection to the allowance of commissions to the executors of Alexander J. Cameron’s estate, and to the payments of certain other items by said executors as part of the testamentary expenses, I find in favor of the executor-trustee. It is clearly provided in the will that out of the corpus of the estate, namely, out of his interest in the business of A. J. Cameron & Company, as ascertained, there shall come, among other things, his debts, funeral and testamentary expenses, and I therefore find'that it is entirely proper, when these have been ascertained, to deduct them; and, with respect to all of such as were ascertained by the orphans court as aforesaid, I instructed the master, and do now find that it was proper to deduct them.

Since the master’s report as finally iñade embodies the various instructions given him by the court from time to time, and I have, in the preceding part of this opinion stated my views with respect to all of the disputed matters, the result is that I dismiss all such exceptions as applied to the final report, by whichever side taken, and confirm the report as made, and will decree accordingly.


source: Caselaw Access Project

author: Leaking, Y. C.

license: Public Domain

text:
    Thomas G. Hilliard, substituted administrator, &c., v. Allen Parker et al.
    [Submitted October 20th, 1909.
    Decided October 20th, 1909.]
    1. A gift of property to a personal trustee to use the income to keep certain graves in good condition forever was not a charity, but a purely private trust and void as a perpetuity, notwithstanding 1 Gen. Stat. 1895 pp. 350, 351 §§ 7, 11/, providing for the incorporation and regulation of cemetery associations.
    2. A gift of a fund, the income of which was to be expended by the executor to purchase fuel for the most needy, women in the borough of W., to be selected by the executor, excluding women living with their husbands, was a charitable trust, and therefore not objectionable as offending the rule against perpetuities.
    3. A trust to use the income of a fund to purchase fuel for the most needy women in W., to be selected by testator’s executor, excluding women living with their husbands, was not void for uncertainty.
    4. A gift of the income of a fund to be paid annually to the treasurer of a library to be expended in the purchase of books, and to be and remain always a fund for that purpose, was a valid charity; and a library association which issued stock to members, entitling each to borrow books from the library, subject to payment of fines for delay, and which also issued permits to others, not stockholders, to borrow books on payment of five cents per week for each volume, no dividends being paid to stockholders, the object of the association being to disseminate knowledge by means of books, periodicals, reviews, and other literature, was a charitable corporation, and therefore authorized to take and use the income of the trust for the purchase of books to be used in connection with the library, and hence the gift was not violative of the rule against perpetuities; the corpus of the bequest forming no part of the assets of the association.
    On bill for construction of will.

      Mr. Enoch 8. Fogg, for the complainant.

      Mr. Howard B. Keasbey, for Allen Parker and others.

      Mr. Morris H. Stratton, for the Baptist Society at Woods-town, in the county of Salem.

      Messrs. French & Richards, for the trustees of the Pilesgrove Library Association.
   Leaking, Y. C.

The bill is filed for the purpose of obtaining a judicial construction of certain clauses in the will of Thohias Enoch, deceased.

The first clause in question is as follows:

“Fourth. I do order that my one remaining share of Bank Stock shall be and remain as a fund and' the dividends arising therefrom shall be expended as may be necessary and shall be used in keeping my grave-yard lot in good condition, and if the said dividends shall not all be required to keep my own lot in condition the residue annually shall be used first in keeping the graves of Naomi Jess and Samuel Ernst in condition then for the balance of the grave-yard where I may be buried forever.” * * *

It is to be regretted that this provision of the will cannot be sustained. Our law does not permit the creation of trusts in perpetuity except for charitable or public purposes. It has been repeatedly determined in this court that a trust for the purpose of keeping in repair the burial place of testator is a purely private trust and is not a trust the object of which is a charity. Detwiller v. Hartman, 37 N. J. Eq. (10 Stew.) 347, 353; Hartson v. Elden, 50 N. J. Eq. (5 Dick.) 522, 525; Corle’s Case, 61 N. J. Eq. (16 Dick.) 409, 410. In Corle’s Case it is pointed out that the provision for the general improvement' of the cemetery will not remove the trust from the operation of the defined rule. Our statute touching incorporated cemetery associations can in no way aid the infirmity of this bequest. 1 Gen. Stat. pp. 350, 351 §§ 7, 14; Moore’s Executor v. Moore, 50 N. J. Eq. (5 Dick.) 554; Corle's Case, supra. The cemetery here in question is not owned by an incorporated cemetery association, and the bequest is not to a cemetery association directing it to take and hold the property bequeathed in trust to apply its income in a manner directed. I am obliged to treat the bequest above quoted as void because in conflict with the law against perpetuities.

The second provision of the will which is now brought in question is as follows:

“I do order that the sum of two thousand dollars now in the hands of and owed to me by Iteuben Woolman shall remain in his hands as long as he will keep it and the not interest arising therefrom shall be annually expended by my executor in the purchase of fuel for the most needy women of the Borough of Woodstown, to be selected by my surviving executor as he shall judge of their needs; provided the same shall not extend to women living with their husbands, and shall be a perpetual fund forever.”

The $2,000 here referred to has since been paid by Reuben Woolman to the executor and the bequest is now challenged as void for indefiniteness. _

I am convinced that the trust created by this bequest is a valid one. The trust is clearly a charitable trust, and as such there can be no objection to its creation in perpetuity. Goodell v. Union Association, 29 N. J. Eq. (2 Stew.) 32, 34; Trustees v. Wilkinson, 36 N, J. Eg. (9 Stew.) 141; S. C., 38 N. J. Eq. (11 Stew.) 514; Green v. Blackwell, 35 Atl. Rep. 375. I think it must also be said to be settled in this state that a trust of this nature is not void for uncertainty. In Goodell v. Union Association, supra, the trust was that the income “be applied to alleviating the wants and sufferings of the deserving poor of the town of Mount Holly,”-and the trust was sustained. In Hesketh v. Murphy, 35 N. J. Eq. (8 Stew.) 23, the trust was to employ certain income “for the relief of.the most deserving poor of the city of Paterson aforesaid forever, without regard to color or sex; but no person who is known to be intemperate, lazy, immoral or undeserving, to receive any benefit from said fund.” This gift was held to be a valid charity as against the objections that it was too indefinite, and that it failed to provide a power of selection of its objects. This decision was affirmed in 36 N. J. Eq. (9 Stew.) 304. The principles defined by the eases already cited fully support the gift now in question.

The third provision of the will which is now brought in question is as follows:

“I do order that the sum of live hundred dollars be placed at interest on good freehold security and that the net interest thereof be annually paid to the Treasurer of the Woodstown Library to be expended in the purchase of books, and to be and remain always a fund for that purpose.”

It is conceded that a bequest for the promotion of learning is a gift for charitable uses within the exception to the rule against perpetuities. See Stevens v. Shippen, 28 N. J. Eq. (1 Stew.) 487, 532; Taylor v. Trustees of Bryn Mawr College, 34 N. J. Eq. (7 Stew.) 101. It is also admitted that by the Woodstown library, as referred to in the will, testator referred to a certain library association at Woodstown, the exact name of which is “The Trustees of the Pilesgrove Library Association.” It is also admitted that this library association is incorporated under the act “to promote societies for the promotion of learning” (2 Gen. Stat. p. 1925); that the association has a collection of books of a general character for loan to citizens of Woodstown and others, and that the association has certificates of corporate stock which it issues to its members at a nominal payment of one dollar per share, each member being entitled to hold as many shares as he may care to take, but each holder of stock being entitled to but one vote in the management of the affairs of the association, and each member is required to pay into the treasury of the association each year dues equal to one dollar for each share of stock held, and is entitled to borrow from the library of the association one book on each share of stock so held, but subject to the payment of fines for detention of books longer than the time authorized by the general rules of the association, and members, and others not members, are privileged to borrow from the library of the association on permits issued for that purpose such other books as they may desire on payment of five cents per week for each volume so borrowed. It is also admitted that no dividends or profits are paid or contemplated by the association to its stockholders, and that all receipts for stock, annual dues, permits and fines are turned into the treasury for the purpose of purchasing books and the payment of the current expenses of the association. It is also admitted that the constitution of the library association defines its object to be “the dissemination of knowledge by means of books, periodicals, reviews and other literature,” and that the. association in its work has been giving a course of free lectures, and that its library for years has been the meeting place of the Uaturalist Field Club,'and also the meeting place of the1 University Extension Centre, which societies have free access to such books as are needed in their work; that free use of the library has been given to the professor and teachers of the public schools, and awards of merit have been at times given by the library association to children of the public schools.

I think it manifest that the donee in this bequest referred to must be regarded as an association charitable in a legal sense so far as the rule against trusts in perpetuity is concerned. It is manifestly an association formed and conducted for the public good in the dissemination of learning and in no sense for private gain or profit. The bequest directs that the income be expended for the purchase of books and the admitted facts touching the work and objects of the library association render it apparent that testator’s intention was the creation of a trust for the benefit of the public in its use of the books so purchased. In Alfred University v. Hancock, 69 N. J. Eq. (3 Robb.) 470, it is said: “All gifts for the promotion of education are charitable in a legal sense, where the elements of private gain are wanting, and where the scheme is, in part, supported by public or private contributions.” I do not think the fact that stock is held in the library association by its members in the manner already stated, and that at dissolution the surplus assets of the association may be lawfully distributable among its stockholders, will operate to defeat the bequest now under consideration. The corpus of the bequest forms no part of the assets of the association, and the income from the bequest will, so long as used as directed by the-testator, serve its manifest purpose.

I will advise a decree in accordance with the views herein expressed.


author: Leaming, Y. C.

text:
    Emma Burke Elmer v. Trenton Trust and Safe Deposit Company, administrator, &c.
    [Submitted November 1st, 1909.
    Decided November 3d, 1909.]
    1. Where the principal of a wife’s separate estate comes to the possession of her husband, and is used by him, the presumption of law is against a gift.
    2. Evidence held to show that money coming to the possession of a husband from his wife’s separate estate was not a gift.
    On bill, answer, replication and proofs.

      Messrs. Thompson ■<£• Qole, for the complainant.

      Messrs. Vroom, Diclcinson & Scammell, for the defendant.
   Leaming, Y. C.

The evidence establishes the fact that Dr. Elmer received'from his wife and deposited in his own bank account money to the amount of $8,862.21. I-Iis wife also.paid for him to Collins $1,198.41, and to Katzenbach & Company, $549.30. All of the money referred to was the separate estate of Mrs. Elmer. Most of the money so paid was from the principal of Mrs. Elmer’s estate; a smaller portion was from its income. A considerable portion of the money referred to was undoubtedly expended in improving the residence property of Dr. Elmer which was at the time occupied by him and his wife.

Since Adoue v. Spencer, 62 N. J. Eq. (17 Dick.) 782, the law must be regarded as settled in this state to the effect that where the principal of a wife’s separate estates comes to the possession of the husband and is used by him the presumption of law is against a gift, although the opposite presumption may exist as to income from the wife’s separate estate. See, also, Brady v. Brady, 58 Atl. Rep. 931; Small v. Pryor, 69 N. J. Eq. (3 Robb.) 606; Mayer v. Kane, 69 N. J. Eq. (3 Robb.) 733, 738. These presumptions, however, can only be controlling in the absence of satisfactory evidence of a contrary purpose. Evidence inconsistent with the idea of a loan existed in Black v. Black, 30 N. J. Eq. (3 Stew.) 215. In the present case the evidence is wholly inconsistent with the idea of a gift of either the principal or income. During the period of the advances in question the husband repeatedly signed statements showing the amount of money he was receiving from his wife, and in his bank book most of the deposits made by him of money, received from his wife were marked by him in pencil with his initials. These acts on his part cannot be reconciled with the idea that any of the money so received by him were gifts to him.

I will advise a decree for complainant for the aggregate of the amounts above stated.


text:
    Katherine McCullough v. Rose Ward et al.
    [Submitted October 19th, 1909.
    Decided November 11th, 1909.]
    1. For misjoinder of parties defendant those only can demur who are improperly joined.
    2. Where the demurrer raises the objection that the bill discloses that the real estate sought to be partitioned is in the possession of the demur-rant under a claim of title adverse to the title asserted by the complainant, the demurrer will be allowed.
    On several demurrers of Loretta Plunkett and Michael Reilly to bill for partition.

      Mr. Winfield Si Anglemm, for the demurrants.

      Mr. Arthur II. Bissell, for the complainant.
   Leaming, Y. C.

1. The bill having been amended by the elimination of the clause relating to unknown descendants of deceased brothers and sisters of Jane Reilly, the demurrer of Lauretta Plunkett presents the single objection that tenants by the curtesy initiate are not proper parties defendant to a bill for partition of real estate.

It is unnecessary to give consideration to the merits of the objection here urged. Por a misjoinder of parties as defendants, those can only demur who are improperly joined. Story Eq. Pl. § 544; Miller v. Jamison, 24 N. J. Eq. (9 C. E. Gr.) 41, 44; Herman & Grace v. Freeholders, 64 Atl. Rep. 742, 746. I am not able to reach the conclusion that a different rule should obtain in a suit for partition of real estate. It is of interest to a co-tenant that no unnecessary cost be made a charge against the land sought to be partitioned, hut that interest can be appropriately protected at such time as complainant may seek to make the costs a charge. The demurrer of Lauretta Plunkett must be overruled.

2. The demurrer of Michael Reilly raises the additional objection that the bill discloses that the real estate sought to be partitioned is in the possession of demurrant under a claim of title adverse to the title asserted by complainant.

The title which complainant asserts in behalf of herself and her co-tenants is a title by descent from Jane Reilly, deceased. The averments of the hill touching demurrant Michael Reilly are as follows:

“And your oratrix further shows that Michael Reilly, who was the husband of the said Jane Reilly, deceased, is now living; that he was appointed administrator of the estate of said Jane Reilly, deceased, and is in possession of the said premises, and has let a part thereof to one Mr. Rees, and another part thereof to one A. Werner, and another part thereof to a Mrs. Lewby, and another part thereof to a Mrs. Fisher, as your orator is informed and believes, and collects and retains from said Mr. Rees, A. Werner, Mrs. Lewby and Mrs. Fisher, the rents thereof, notwithstanding the fact that as there were no issue of the marriage of the said Jane Reilly and Michael Reilly, the said Michael Reilly is not entitled to any right of curtesy in the said premises, and that his possession thereof and his appropriation of the rents, issues and profits arising therefrom, whether as administrator as aforesaid, or individually, are without right and contrary to the rights and interest of your oratrix and the other heirs of the said Jane Reilly, deceased.”

These averments of the bill disclose the fact that the premises sought to be partitioned are in the possession of demurrant as a stranger to the title under which complainant and her eo-tenants claim, ahd that demurrant is exercising the right to execute leases of parts of the premises and is appropriating the rents, issues and profits of the land. From these averments, taken in connection with other averments of the bill which specify the several co-tenants and their respective shares, it must be here assumed as a fact that demurrant Reilly is not an owner of any interest in the land in question which is derivative of the common source of title under which complainant and her co-tenants claim, and that demurrant now holds possession of the lands adversely to the rights asserted by the bill in behalf of complainant and her co-tenants.

It is entirely clear that under these averments demurrant Reilly cannot he brought into this court as a defendant in a suit for partition of the lands in question. Demurrant is made defendant solely because he is in possession of the premises adversely to the claim of right asserted in behalf of the co-tenants, and this court is, in effect, asked to retain him as defendant to the end that his wrongful possession may be adjudicated and the possession lie restored to the legal title. That remedy is found in an action of ejectment. Demurrant is entitled to he dismissed.

I have not found it necessary to consider whether this court can properly entertain a bill for partition which on its face discloses that the premises are in the adverse possession of a stranger to the title under which the several co-tenants claim. Demur-rant Reilly is not a proper party defendant and can have no interest in that question, as no rights of his can be affected by the subsequent proceedings in the suit.


author: I/EAMiisre, Y. C.

text:
    Wilhelmina D. Bowen v. Vivian B. Smith.
    [Submitted November 5th, 1909.
    Decided November 20th, 1909.]
    1. Where the owner of land lays it out into streets and lots, and adopts a restrictive covenant regarding the location and use of buildings to be erected on the lots, with a view to secure the defined conditions named in the covenant for the benefit of the entire tract which he seeks to develop, and inserts the covenant in all deeds as a part of the defined scheme and as an exaction from all purchasers for the benefit of each purchaser, the equitable right to enforce the covenant enures to each purchaser, irrespective of the time of his purchase.

      2. A restrictive building covenant in a deed of platted land, providing that it was the object of the covenants to secure and perpetuate the health, beauty and general improvement of the locality, and that it was expressly agreed that such covenants should run with the land, and that any subsequent conveyance should be made subject to the same covenants, &c., was a covenant for the benefit of the remaining portion of the grantor’s land.
    3. The record of a deed containing a restrictive building covenant was notice to all persons to whom the grantee’s title subsequently passed.
    4. The foreclosure of a mortgage, given by the grantee in a^deed containing restrictive building covenants to the grantor, did not extinguish the notice given by the record of the deed that the grantee had bound himself and his heirs and assigns to the preservation of such covenants.
    o. The equitable right to enforce restrictive building covenants may be lost by a degree of acquiescence in their violation amounting to an abandonment of the right of complainant.
    G. A common grantor, who has parted with his title to a portion of the land for the benefit of which a restrictive covenant has been imposed on other land theretofore conveyed by him, may not thereafter release or modify the covenant so far as it operated to benefit the land previously conveyed.
    7. Evidence held insufficient to show a loss by complainant of the’right to enforce restrictive, building covenants through failure to seek to enjoin the erection of certain buildings.
    8. A covenant in a deed establishing a building line is valid.
    On bill for injunction to enforce restrictive building covenants. Heard on application for a preliminary injunction.

      Messrs. Thompson & Cole, for the complainant.

      Mr. John B. Slack, for the defendant.
   I/EAMiisre, Y. C.

Tt is settled in this state that when an owner of a tract of land lays it out into streets and lots and adopts a restrictive covenant with reference to the location and use of buildings to be erected on the lots with a view to secure the defined conditions named in the covenant for the benefit of the entire tract which he seeks to develop, and inserts the covenant in all deeds as a part of the defined scheme and as an exaction from all purchasers for the benefit of each purchaser, the equitable right to the enforcement of the covenant enures to each purchaser irrespeetive of the time of his purchase. See DeGray v. Monmouth Beach Co., 50 N. J. Eq. (5 Dick.) 329; Hasselman, 69 N. J. Eq. (3 Robb.) 612; Barton v. Slifer, 72 N. J. Eq. (2 Buch.) 812.

I think it unnecessary, however, to here - consider the evidence in this case to determine to what extent rights may have arisen through any scheme adopted by either the Chelsea Beach Company or the Chelsea Land and Improvement Company for the development of the tract along the lines of a defined general plan, for the deed made to ‘William T. Eunkle by the Chelsea Land and Improvement Company, which deed contains the covenants now in question and under which deed defendant derives his title, was made prior to the conveyance by that company to Edward Geschke, under which conveyance complainant now holds through sundry mesne conveyances. In such case the right of the subsequent purchaser of all or a part of the remaining land of the common grantor for the benefit of which the covenant was made to enforce the covenant against the prior grantee and his grantees with notice has long been recognized in this state. I think the law of this state in the aspect last referred to is accurately summarized by me in McNichol v. Townsend, 73 N. J. Eq. (3 Buch.) 276, as follows:

“The equitable grounds on which restrictions of this nature may be enforced at the instance of a subsequent grantee of the common grantor are well defined. One owning a tract of land may convey a portion of it, and by appropriate covenant or agreement may lawfully restrict the use of the part conveyed for the benefit of the unsold portion, providing that the nature of the restricted use is not contrary to principles of public policy. In such case a subsequent purchaser of all or a part of the remaining land for the benefit of which the stipulation was made may in equity enforce the observance of the stipulation against the prior grantee upon the principle that the rights created by such stipulation are transferable as part of the land to which they are attached (Coudert v. Sayre, 46 N. J. Eq. (1 Dick.) 386), and such subsequent purchaser may in equity enforce the stipulation against a person who holds title under the prior purchaser, who has acquired title, with notice of the restriction, upon the principle which prevents a party having knowledge of the just rights of another from defeating such rights. Brewer v. Marshall, 19 N. J. Eq. (4 C. E. Gr.) 537, 542. As no privity exists between the subsequent purchaser from the common grantor and the original grantee or the persons holding under him, the right of action is necessarily dependent upon the existence of the fact that the stipulation was originally made for the benefit of the remaining land of the common grantor.” Rogers v. Hosegood (1900), 2 Ch. 388, 404.

The covenants contained in the conveyance from the Chelsea Land and Improvement Company to William T. Eunkle, defendant’s predecessor in title, must be regarded as a covenant made for the benefit of the remaining portion of the land of the grantor. The language of the covenant permits no other conclusion. It is:

“Under the subject, nevertheless, to the covenants and conditions contained herein, which are hereby made a part of the consideration of this conveyance and are accepted herewith by the party of the second part. * * * It being the object of these covenants and agreements to secure and perpetuate the health, beauty, ornamentation and general improvement of the locality; it is expressly understood and agreed that the said several covenants on the part of the said party of the second part, above specified, shall attach to and run with the land, and any subsequent conveyance of the premises herein conveyed shall be made subject to the same restrictions and covenants as herein set forth, which shall be made a part of the said transfer or sale, and so stated in every deed, and it shall be lawful not only for the said party of the first part, its successors and assigns, but also for the owner or owners of any lot or lots adjoining in the neighborhood of the premises hereby granted, deriving title through the said party of the first part, to institute and prosecute any proceedings at law or in equity against the person or persons violating or threatening to violate the same; it being understood, however, that this covenant is not to be enforced personally for damages against the said party of the second part, his heirs or assigns, unless he or they be the owner or owners of the said premises or of some part thereof at the time of a violation of the said covenant or of a threatened or attempted violation thereof; but the said covenant may be proceeded in for an injunction of and for a specific execution thereof against the said party of the second part, his heirs or assigns, and for damages against the party or parties violating the said covenant or their heirs, executors or assigns.”

The deed to Euukle containing these covenants was duly recorded and the record afforded notice to all persons to whom' Runkle’s title subsequently passed. Brewer v. Marshall, 19 N. J. Eq. (4 C. E. Gr.) 537, 541. Hayes v. Waverly and Passaic Railroad Co., 51 N. J. Eq. (6 Dick.) 345, 350.

Complainant’s deed does not contain any restrictive covenants, but his title emanates through the deed from the Chelsea Land and Improvement Company to Geschke, above referred to, and that deed, which was duly recorded, contained restrictive covenants which were exactly the same as the covenants contained in the Runkle deed except that part of the covenants touching the size of the lots. The title of Geschke was thereafter extinguished by the foreclosure of a mortgage executed b3r him to his grantor, the block of land being purchased at the foreclosure sale by the land company, and the lot now held by complainant was therefore sold without restrictive covenants to one Culbert and by Culbert to complainant. But the foreclosure of the Geschke mortgage did not extinguish the notice which the record of the Geschke deed gives that Geschke had bound himself and his heirs and assigns forever to the preservatio'n of the covenants contained in his deed. The Geschke covenants can be enforced against complainant to the same extent as they could have been had the title not again passed through the land company, for the second holding of the lots by the land company was under the Geschke covenants.

In the Runkle deed the covenants say:

“It is expressly understood and agreed by and between the parties hereto that the dimensions o£ the lots herein conveyed shall not be reduced in size.”

In the Geschke deed that' part of the covenant touching the size of the lots is:

"It being expressly understood and agreed by and between the parties hereto that the dimensions of the lots herein conveyed shall not be reduced in size smaller than forty feet front by one hundred twenty-five feet in depth on Montpelier and Chelsea Avenues, nor smaller than forty feet by ninety feet on Baltic and Sunset Avenues.”

This difference in the language of the covenants touching the size of the lots manifestly arises by reason of thb fact that the lots on the northwesterly side of Baltic (now Eairmount) avenue formerly fronted on tlie streets running northwesterly and southeasterly, the sides of the lots being on Baltic avenue. The map which disclosed lots on the northwesterly side of Baltic avenrie as fronting on that avenue does not appear to have been filed until March 4th, 1908, but as the Geschke deed of November 1st, 1902, contemplates these lots as -fronting on Baltic avenue, it seems manifest that tlie original plan as to the frontage of these lots had been modified as early as that date. That accounts for the change in that part of the covenant in the Geschke deed. Otherwise the covenants are the same as in the Runkle deed. It seems clear that this change in the frontage of lots on the northwesterly sicle of Baltic avenue, whenever it was made, could not operate to defeat complainant’s right to the enforcement of the restrictive covenants in defendant’s chain of title. Regarding the covenants in the Runkle deed as made for the benefit of the remaining portion of the land of grantor land company, I see no reason why that company could not exercise the right to change the subdivisions of the remaining portion of its lands to suit its purposes or even sell the remaining lots without restrictive covenants without in any way lessening its right or the right of its grantees to enforce the Runkle covenants. The theory upon which complainant’s equitable right to enforce the covenant in the Runkle deed is sustained is set forth with great clearness in Coudert v. Sayre, 46 N. J. Eq. (1 Dick.) 386. I think complainant’s equitable right to enforce the covenants in question is clear, unless it shall be found that she has lost tlie right through her acquiescence or through the acquiescence of her predecessors in title while owners of the lot now owned by complainant in the violation of similar covenants in other deeds.

The building which defendant is erecting is a brick building within one foot of the front property line of defendant’s lot. The covenant in question is: “That no building shall at any time be erected nearer than twenty feet of the front property line of any street or avenue.”

The lots of complainant and defendant are on opposite sides of Baltic (now Eairmonnt) avenue and nearly opposite each other.

It is well settled that the equitable right to enforce restrictive covenants of this nature may be lost by a degree of acquiescence in their violation amounting to an abandonment of the right of complainant. In Chelsea Land and Improvement Co. v. Adams, 71 N. J. Eq. (1 Buch.) 771, Vice-Chancellor Bergen had occasion to say:

“If the original grantor of one hundred and fifty lots by deeds, with restrictions as to building lines, allows two-thirds of the grantees to violate it without protest, it cannot enforce it against a single grantee for the purpose of benefiting its remaining lands, for the grantee thus assailed is entitled to the common privileges accorded to other purchasers who are subject to like restrictions.”

But the conditions stated in the language quoted differ radically from those presented by the present case. When a common grantor has parted with his title -to a portion of the land for the benefit of which a restrictive covenant has been imposed on other land theretofore conveyed by the common grantor, it is not thereafter possible for the common grantor to release or modify the covenant, so far as it operated to confer a benefit on the land which he had previously conveyed. Couderi v. Sayre, supra (at p. 396). A town site proprietor, owning lots on various parts of the tract, may be directly interested in violations of such covenants upon any part of the entire tract and acquiescence on his part may appropriately deny to him the equitable right to enforce the covenants; but a violation of a restrictive covenant at a point on the tract distant from the lot of an individual lot owner may be of no interest whatever to such an owner and cannot appropriately call for affirmative action on his part. It seems to me clear that any claim of bar asserted against the rights of an owner of a single lot by reason of acquiescence in the violation of restrictive covenants of this nature must be measured in its force by the relation of the asserted violation to the individual lot. I am unable to discern any duty, the failure of performance of which should operate as an equitable bar, upon the part of an owner of a single lot on a tract of land similar to the one now in question, to apply to the courts for the enforcement of restrictive covenants the violation of which in no appreciable manner affect such owner. This was, I think, the view entertained by Vice-Chancellor Emery in Morrow v. Hasselman, 69 N. J. Eq. (3 Robb.) 612, and this view was followed by me in Barton v. Slifer, 72 N. J. Eq. (2 Buch.) 812, and again in Brigham v. Mulock Company, 74 N. J. Eq. (4 Buch.) 287. It may also be noted that the covenants in the Bunkle deed, under which defendant holds, are defined as for the improvement of the locality and in express terms give the right of enforcement in a court of equity to owners of lots in the neighborhood of the lot granted.

The covenants contained in the Bunkle deed embody a great number of restrictions. In addition to the restrictions already referred to, there are restrictions fixing the minimum cost of any building to be erected on the lot; that the top of the first floor joists of any building except stables shall not be less than seven feet and not more than eight and one-half feet higher than the grade of the sidewalk level; that only one building for dwelling-house purposes shall be built on a lot; that certain enumerated uses of buildings shall not be permitted; that double buildings must cost at least a certain amount; the location of stables are defined; sundry other details are also provided touching the uses permitted of buildings to be erected. The affidavits filed in behalf of defendant disclose that fifty-seven houses have been erected and are in course of erection on the tract in question, and point out all instances in which violations of any of the covenants have occurred. These violations include seven instances in which the height of the first floor joists of buildings are not within the limits defined. One instance is noted where three lots have been converted into four lots, and another where a lot “seems to have been diminished in size.” Two chimneys axe shown to extend over the side line restriction. Several buildings are shown to be used for storage. One building is used as an apartment house. A building at Ho. 104 Sovereign avenue is one and eight-tenths feet over the front building line, and another building on the same avenue has a second story which projects over'the front building line, and a building at 114 Chelsea avenue projects seven feet over the front building line, and some violations of the side and rear lines covenants are also shown. The location where the violations already referred to have occurred are given by street numbers, and I am unable to accurately locate them, but they are manifestly all far from the lot of complainant and in no way affect the desirability of complainant’s lot. There is also a brick structure at the rear of the lot adjoining defendant’s lot, which is used for building boats, and the location of the building appears to violate the covenants relating to rear and side lines, and at the front of that lot is a shed which extends to the propert]r line. This is the only violation of the covenants in which I think complainant can be said to be reasonably concerned. From the description of the shed, T do not think it proper to regard it as a structure of such a permanent or substantial nature as to justify the conclusion that its existence should operate to deny to complainant the privilege of asserting his rights against defendant. The rear or side line encroachments of the brick building is necessarily a matter of little or no concern to complainant. Such encroachments are of little interest to persons other than owners of adjacent lots. There are also several houses'in process of erection on Sovereign avenue, northwesterly of Fainnount avenue, which extend five feet over the front building line. These buildings cannot reasonably concern complainant so far as the desirability of the property is concerned. Three buildings are also being erected on Fairmount avenue, southwesterly of Sovereign avenue, which extend five feet over the front building line. These are the only buildings on the avenue on which complainant’s lot is situated which extend over the front building line, except the shed already referred'to, and these buildings are how in process of erection. I do not think that complainant’s rights against defendant can be properly considered as lost by reason of her failure up to this time to seek to enjoin the erection of the buildings last referred to. See Bridgewater v. Ocean City Railway Co., 62 N. J. Eq. (17 Dick.) 276, 292; affirmed, 63 N. J. Eq. (18 Dick.) 798.

From this review of the facts touching violations of the covenants in'the Runkle deed, it seems clear that there have been no such violations as have substantially changed the- contemplated character of the neighborhood or have defeated the general purposes sought to be accomplished by these covenants. The locality is that of a summer seaside, resort. The general purpose of the covenants, as stated in the Runkle deed, is “to secure and perpetuate the health, beauty, ornamentation and general improvement of the loealit}r.” So far as the important covenant which requires buildings to be set back twenty feet from the front property line is concerned, it appears that of about fifty completed buildings now on the tract nearly all have respected that covenant. In this view it approaches a question of public as well as private concern that the spirit of this covenant made to preserve the health and comforts of the neighborhood be maintained.

I have thus far referred to the covenant touching the building line as one creating only an equitable right in complainant to enforce its observation. A reference to the terms of the covenant will disclose that it not only declares its purpose to be to protect the health and beauty of the locality, but by its terms it is declared that the covenant shall attach to and run with the land, and that it shall be lawful not only for the grantor and its successors and assigns, but also for the owner of any lot in the neighborhood deriving title from or through the grantor to institute proceedings at law or in equity against any person violating or threatening to violate the covenant, except only that no action at law for damages shall be maintained against the grantee or his heirs or assigns, unless he or they be the owner of the premises or of some part thereof at the time of the violation of the covenant. The present case is therefore one in which the parties to the Runkle deed have, by their stipulations, agreed that the lot conveyed shall, as to the front twenty feet thereof, become permanently burdened with an easement in favor of the surrounding property to the end that the twenty feet referred to shall never be built upon, but shall remain open for .the health and beauty of the neighborhood. The covenant is expressly defined as running with the land and as conferring on all persons holding lots in the neighborhood under the grantor the right to enforce the covenant either at law or in equity.

T am not aware of any policy of law against the creation of such an easement by the deliberative stipulation of the parties in interest. Indeed, covenants of this nature have been sustained and enforced when arising only by implication. See Lennig v. Ocean City Association, 41 N. J. Eq. (14 Stew.) 606. In this view complainant may be regarded as the owner of a legal estate, the existence of which is not in substantial dispute, and as now seeking in this court the preservation of that estate, and not merely as the owner of an equitable right unsupported by an interest in the land of defendant.

The application of complainant for relief was promptly made. I think I must take judicial notice of the fact that the bill was presented to me some days before the writ issued, and was thereafter redrafted by reason of certain errors of the stenographer who copied into the first bill erroneous data relating to the covenants.

1 will advise a preliminary injunction against the construction of defendant’s building nearer than twenty feet to the front property line.

As the other covenant here sought to be enforced relates to the use of the building, I see no necessity of considering that question at this time.


author: Beaming, Y. C.

text:
    Peter Schwoebel v. William A. Storrie et al.
    [Submitted November 30th, 1909.
    Decided December 11th, 1909.]
    1. A motion to dismiss a bill under rule 213 assumes that all the material averments of the bill are true.
    2. When facts are brought to the knowledge of one contemplating the purchase of the record title sufficient to apprise him of the existence of an outstanding claim of title, and a reasonable investigation of such facts would necessarily disclose the existence of such title, he is put on inquiry and charged with notice of the facts which a reasonably diligent investigation would have ascertained.
    3. Open, visible, notorious, and exclusive possession of land by one who is not the record owner affords notice to one who purchases the record title which puts him on inquiry, and charges him with the knowledge of those facts which a reasonably diligent investigation would have ascertained.
    4. Where in 1891 a mistake was made in the description of the property in a deed, as also in subsequent conveyances, but one claiming under it and intervening conveyances did not know of the mistake until 1906, his suit, brought in 1909, for reformation, was not barred by laches.
    Oil bill to reform deeds. Heard on motion to dismiss bill for want of equity and for laches.
    Complainant seeks to reform a deed of conveyance made to him for certain real estate, and also to reform the deeds made to his grantor and to his grantor’s grantor, respectively, for the same land. The bill avers that the mistake in the deed made to complainant and in the other deeds in complainant’s chain of title arose as follows: On November 5th, 1891, Keturah Mullica owned a tract of land fronting on Broad street, Woodbury, New Jersej'-, which tract was divided into two lots by a fence extending across the tract at about right angles to Broad street. Mrs. Mullica at that time resided in a dwelling-house on the lot on the northerly side of the fence, and on the date named sold the lot on the southerly side of the fence to Elizabeth Brandt. The description of the land contained in the deed of conveyance was intended by the parties to extend to the fence above referred to and thus make the fence the division line between the parties, but by reason of an error in the description the land actually covered by the language of the deed extends only to a line parallel with and five feet southerly of the fence. June 3d, 1892, Elizabeth Brandt (the grantee referred to) sold the lot to Anna M. Latham. The deed made on that date contained the same erroneous description, and, in consequence, by its terms only extended to a line five feet southerly of the division fence already referred to. October 2d, 1905, Anna M. Latham (the grantee last referred to) sold the lot to complainant. The deed made on that date followed the same erroneous description. The description contained in each of the three deeds was intended by the parties to extend to the fence and was by the parties believed to extend to the fence. Each of the grantees named have, during their respective ownerships, been in actual and open possession of the five-foot strip which was omitted by the erroneous description, as possession of the entire southerly lot up to the fence was taken under the Mullica deed and has been continuously maintained until this time. All of the deeds referred to were promptly recorded.
    By deed dated February 10th, 1906, the heirs of Mrs. Mullica conveyed to William A. Storrie the northerly lot referred to and also the five-foot strip southerly of the fence which was erroneously omitted from the deeds of complainant and his predecessors in title. Complainant and his respective predecessors in title believed that the description in their respective deeds extended to the fence until after the purchase by Storrie, when complainant was made aware of the errors in the several descriptions by a claim to the five-foot strip then asserted by Storrie. November 15th, 1907, Storrie brought an action of ejectment against complainant for the recovery of-the five-foot strip southerly of the fence and recovered judgment February 16th, 1909. The present bill seeks to stay the execution of that judgment and to reform the errors of description referred to.
    In addition to the averments contained in the bill that complainant and his predecessors in title have been in continuous and open possession of the fivé-foot strip now in dispute, since the time the deed was made by Mrs. Mullica to Elizabeth Brandt, the bill avers as follows:
    “And your orator further shows that me said William A. Storrie, prior to his purchase of the said tract of land knew that your orator was in possession of the said five-foot strip, and that your orator claimed ownership of same.”
    Defendant Storrie now moves to dismiss the bill for want of equity and for laches.

      Mr. John Boyd Avis, for the complainant.

      Mr. Thomas G. Hilliard and Mr. Howard B. Keasbey, for tlie defendants.
   Beaming, Y. C.

The present motion, which is made to dismiss the bill under rule SIS, necessarily assumes that all of the material averments of the bill are true.

The right of complainant to the reformation of his deed and of the deed made to his grantor, and of the deed made to his grantor’s grantor, as against all persons other than defendant Storrie, is not questioned. The deed from Mrs. Mullica to Mrs. Brandt conveyed, in equity, all that the parties mutually intended it to convey. In like manner the subsequent deeds to Mrs. Latham and to complainant conveyed all that the respective parties intended them to convey. Complainant is therefore the equitable owner of the entire lot which the respective parties referred to intended to convey. The heirs of Mrs. Mullica inherited only the rights of their ancestor.

The equitable estate of complainant in that part of the lot which is not covered by the terms of the description in his deed would necessarily be lost, by force of our recording statute, as against a subsequent bona fide purchaser not having notice thereof at the time of his purchase. But that statute affords no protection to a subsequent purchaser with notice. The notice contemplated by the recording statute'as sufficient to defeat its protection to a subsequent purchaser need not, in itself, apprise the purchaser of all the facts touching the outstanding title. When facts are brought to the knowledge of the person contemplating the purchase of the record title which are sufficient to appraise him of the existence of an outstanding claim of title, and a reasonable investigation of such facts would necessarily discover the existence of such outstanding title, the purchaser is put upon inquiry and charged with notice of the facts which a reasonably diligent inquiry would have ascertained. It is also well settled that the open, visible, notorious and exclusive possession of land by one who is not the record owner affords a notice to one who purchases the record title which puts such purchaser upon inquiry and charges him with a knowledge of such facts as a reasonably diligent inquiry would have ascertained. Diehl v. Page, 3 N. J. Eq. (2 Gr. Ch.) 143, 145; Van Keuren v. Central Railway Co., 38 N. J. Law (9 Vr.) 165, 167; Havens v. Bliss, 26 N. J. Eq. (11 C. E. Gr.) 363, 370; Johns v. Norris, 27 N. J. Eq. (12 C. E. Gr.) 485, 487; Wanner v. Sisson, 29 N. J. Eq. (2 Stew.) 141, 150; Cooke v. Watson, 30 N. J. Eq. (3 Stew.) 345, 352; Essex County Bank v. Harrison, 57 N. J. Eq. (12 Dick.) 91, 95; see, also, 2 Pom. Eq. Jur. §§ 614, 615; 2 Dev. Deeds §§ 760, 777.

The rule as stated in Allen v. Seckham, 11 Ch. Div. 790, 795; is: “Where a person purchases property where a visible state of things exists which could not legally exist without the property being subject to some burden, he is taken to have notice of the extent and nature of the burden.”

In the present case the bill not only avers that the land in question was “openly occupied, used and enjoyed” by complainant at the time of the purchase by defendant Storrie, but also that defendant Storrie knew that complainant was in possession and claimed to own the land. Under the circumstances stated defendant Storrie would have necessarily ascertained the nature and extent of complainant’s rights had an inquiry been made of complainant for that purpose. Defendant Storrie cannot, in consequence, be regarded as a purchaser without notice of complainant’s equitable estate.

The bill discloses no laches which should operate to defeat the relief sought by complainant. Complainant did not know of the mistake until after the purchase by defendant Storrie in the year 1906. His possession has continued since that time and no equities have intervened. Ruckman v. Cory, 129 U. S. 387.

I will advise an order denying the motion of defendant.