Volume 70 — New Jersey Equity Reports

<p>On motion to set aside execution.</p>

<p>Ob demurrer to bill.</p>

<p>1. Where a petition by the receiver of an insolvent corporation showed that certain shares of stock of the corporation had been ’issued by it in payment for property conveyed to it, which conveyance was thereafter judicially declared void, so that the consideration for the shares of stock issued in payment wholly failed, and that the shares had been transferred to various persons, it was within the court’s discretion to grant leave to file a bill in behalf of the parties interested to, determine the rights of such stockholders.</p> <p>■2. A bill by the receiver of an insolvent corporation to determine who the stockholders are need not disclose whether the assets the receiver has reached, or maj7 reach, are sufficient to satisfy the creditors.</p> <p>3. On demurrer to a bill by the receiver of an insolvent .corporation to determine who the stockholders of such corporation are, the court will not consider whether, by the proceedings in the original cause, it has been made to appear that there are no assets sufficient to satisfy creditors.</p>

<p>The bill stated that the complainant had in her hands a specific sum of money due to Eitel, one of the defendants, upon a written contract for the erection of a house, and that the other defendants had served on the complainant “lien claim notices.” The prayer was for a decree that the defendants should interplead, and that complainant, on paying into court the sum she admitted to be due, should be discharged from all liability to defendants.- - On demurrer—Held, that the bill was defective in that it did not show that the written contract had been filed, so as to- protect the land from liens under the Mechanics’ Lien act.</p>

<p>A devise of real estate to a widow for life and to a stepson in fee, is followed by a direction that if the stepson should die without issue the same should be divided among testator’s brothers and sisters, with a provision that if any brother or sister should die, leaving children, his or her share should go to the children.—Held, (1) that upon the happening of the contingenpy the estate of the stepson was devested ;• (2) that by the direction to divide, the persons indicated as intended by testator to share his bounty are any brothers or sisters then surviving, the children of any brother or sister who had died-leaving- children, and the grantee, devisee or heir-at'-law of any brother or sister. who had died leaving no child; '(3) the interest of children substituted for parents, under the direction, is transmissible to their heirs-at-law.</p>

On order to show cause why injunction should not issue. Heard on bill and. one.affidavit, and one affidavit in opposition thereto.

<p>A contract for tbe purchase of defendant’s stock' in complainant corporation provided that defendant should not concern himself in the manufacture or sale of resistance or steel armature binding wire, &c., but might experiment in making such goods at his own expense, and, if the results of such experiments should meet complainant’s approval, the latter would manufacture the goods, pay for selling the same, “and the profits thereon, after paying for the raw material,” should be divided between the parties, &e. The contract also declared that such inventions and improvements subsequently made by defendant should belong to him, and, if complainant did not approve the same, defendant might make and sell the goods on his own account, paying ten per cent, of the selling price to complainant.—Held, that defendant, having invented a new wire, was not entitled to offer complainant as a compliance with the contract the material invented in a state ready to be drawn into wire, but was bound to disclose the formula and permit complainant to manufacture the same from raw materials.</p>

<p>1. In a suit to foreclose certain mortgages given to a bank, evidence held insufficient to establish an agreement between the mortgagor and the hank that certain notes deposited as collateral for the secured debt should be taken by the bank and credited in payment thereof.</p> <p>2. Where a bank, prior to its failure, had taken steps to extend its ■corporate existence under 1 Gen. Stat. p. 972 § 302, authorizing the extension of the life of corporations, and had thereafter operated and been treated as a banking association legally organized, both by the public and the state government, a borrower was estopped, in an action by the bank’s receiver to foreclose certain mortgages securing certain loans, to allege that at the time the loans were made the bank had no legal corporate existence.</p> <p>3. Where certain mortgages given to a bank recited that the bank was about to loan certain sums of money to the mortgagor, in an amount not to exceed in the whole a specified sum, by discounting his notes payable in three months, such mortgages secured demand notes discounted by the bank for the mortgagor, which referred to the mortgage and were treated by both parties as secured thereby.</p> <p>4. Parol evidence is admissible to show the real object of a mortgage, and' that it was given for a purpose not disclosed in the condition.</p> <p>5. Where an administratrix sold certain mortgaged premises to pay the mortgage debt, and the purchasers paid nothing to the administratrix, but bought for the benefit of a corporation formed by them to operate the property, the administratrix had a vendor’s lien on the premises to the extent of the purchase price, to which the creditor for whose benefit the land was sold was entitled to be subrogated.</p>

<p>1. Where a husband, in order to defeat his wife’s dower interest, caused a mortgage to be foreclosed against his lands, making his wife a party defendant, and by collusion with a party who held his contract to convey the premises for $18,000 managed to have the lands sold to him for the amount of the mortgage, amounting to $4,300, and then settled with the party and received from him the difference between $4,300 and $18,000, the wife’s inchoate right of dower was not barred by the sale.</p> <p>2. A decree of foreclosure and for a sale of mortgaged premises consists of two parts—first, the ascertainment of the amount due on the mortgage and the declaration that the complainant is entitled to have the premises sold to pay the same; and second, the decree of foreclosure against all of the defendants, when the premises are sold. The actual foreclosure depends entirely upon the sale, and to effect a foreclosure in equity the sale must not be a fraudulent sale, so conducted as to injure the party affected by it.</p> <p>3. One who had perpetrated a fraud upon another cannot set up as a defence to an action based thereon that the defrauded party should have discovered the fraud and protected himself against it at the time.</p> <p>4. Where a husband conveyed his land in his lifetime, the widow’s dower will be measured as at the date of the alienation, and she can acquire no benefit from improvements subsequently placed upon the property or its general advance in price.</p>

<p>1. Where a water company was organized to supply certain municipalities under P. L. 1876 p. 318 {Rev. 1877 p. 1365), requiring the consent in writing of the corporate authorities proposed to be supplied, a municipality had power to impose terms as to the rates to be charged for both public and private consumption.</p> <p>2. A municipality, independent of statute, has power and owes a duty to protect its inhabitants against extortion in the price charged for water supplied by a private corporation furnishing water to it for public and private consumption, and to compel the corporation to furnish water at reasonable rates.</p> <p>3. In a suit to determine reasonable rates at which a water company should be compelled to furnish water to a city for public and private consumption, such rates should be established as will enable the water company to derive a fair income, based on the fair value of its property at the time it is being used by the public, taking into account the cost of maintenance and depreciation, current operating expenses, and the right of the public to have no more exacted than the service in itself is reasonably worth, including a fair income to the stockholders on their investment.</p> <p>4. Rule for the establishment of reasonable rates to be charged by a water company for furnishing water to a city applied, and rates fixed foi the various services performed.</p>

<p>Complainants, as legatees of their father, charged defendants, as executors of his will, as if both defendants were alive, with having received $3,000 as the proceeds of his estate, and showed where in the ordinary course of business they ought to have received $400 from another source, and called on them to account. One of the defendants answered by showing that his co-executor received all the money from the proceeds of the estate proper, and died a year thereafter, and with regard to the $400 disavowed all knowledge thereof, and stated that he paid no attention to the management of the estate and executing the will, either in the lifetime of his co-executor, who, complainants knew, handled the money, and who had been dead seventeen years, or afterwards, and that he was never called on to do anything in the premises till the filing of the bill, seventeen years after the right of complainants to an accounting accrued.—Held, that' while the answer admitted culpable negligence, the cause of action was for mere nonfeasance, and was barred by laches.</p>

On order to show cause why an injunction should not issue. Heard on bill, with affidavits annexed, and affidavits in answer thereto.

<p>On order to show cause.</p>

<p>On final hearing on bill, answer and agreed statement of facts.</p>

<p>1. Under P. L. 190% p. 508 § 4 ¶ 1, giving this court jurisdiction of a suit for divorce by reason of adultery, where the adultery was committed without the state and complainant and defendant, or either of them, resided in the state at the time of the adultery and at the time of filing of the bill or petition, an actual residence in the state of either party at the time specified is, according to our decisions, sufficient to give the court jurisdiction of the subject-matter and to enable the complainant or petitioner to acquire jurisdiction of the person of the defendant by a service outside the territorial limits of the state. Qumre. Whether service out of the territorial limits will be held by the supreme court of the United States to give the court jurisdiction of the person of the defendant unless there be a matrimonial domicile in this state. See Haddooh v. Raddoelc, Ü01 V. 8. 56%.</p> <p>2. Though the question of want of jurisdiction of the person can be raised only by plea, and the benefit of it is lost by a general answer, the defence of lack of jurisdiction of the subject-matter need not be raised by plea, but may be set up in the answer to the merits.</p> <p>3. The evidence in the cause held to be sufficient to establish a matrimonial domicile in this state at the time of the commission of the offence and the commencement of the suit.</p>

<p>On motion on behalf of defendant to stay proceedings pending-appeal.</p>

On final hearing on hill and answers, and on cross-bill by Bouvier v. Hume ct al., and proofs. For the previous history of the litigation between these parties, see Bouvier v. Baltimore and New York Railroad Co., 65 N. J. Law (86 Yr.) SIS, and 67 N. J. Law (88 Yr.) SSI, on error, and 69 N. J. Law (J¡.0 Yr.) 1^9, on certiorari.

<p>On final hearing on bill, answer and proofs.</p>

<p>1. A. court of equity has the power to review the question of the reasonableness of salaries for the personal services of directors as corporate officers, though fixed by the stockholders, especially where the salary was fixed by the vote of the director as a majority stockholder for his own benefit.</p> <p>2. The permanent annual salary of the president and manager of a corporation was fixed in 1895 by resolutions or by-laws, and was paid to 1900. In 1900 a minority stockholder filed a bill to secure relief against the salary on the ground that it was excessive, and claimed reimbursement from the time the salary was fixed. In 1896 complainant, as a member of the board of directors, endeavored to secure relief, but without success, and made like efforts at a stockholders’ meeting in July, 189S. Since July, 1S98, no meetings of the corporation stockholders have been held. Alter .1895 negotiations for the sale of the minority stockholder’s stock took place between him and other stockholders.—Held, that complainant’s relief could not, because of his laches, extend further than the setting aside of the resolutions fixing the .salary, with an accounting for any excess of salary received for the year commencing next after the filing- of the bill up to the hearing and submission of the cause.</p> <p>3. The question of the reasonableness of the compensation for services as manager of a corporation depends on what the services of a competent manager are reasonably worth, and not on what the manager could make in a different business. Evidence examined and salary held excessive.</p> <p>4. P. L. 1S96 p. 293 § 41, providing that the directors of every corporation created under the act shall, after reserving over and above its capital stock paid in as a working capital for the corporation such sum as shall have been fixed by the stockholders, declare a dividend among its stockholders of the whole amount of its accumulated profits exceeding the amount as reserved, gives to the stockholders discretionary power to fix the amount reserved, and so long as the capital reserved is retained for the benefit of the whole corporation, equity will not interfere.</p> <p>5. Where a stockholder of a corporation sued in its behalf to recover salaries paid certain officers in excess of the amount to which they were entitled, and on other grounds, and recovered an amount as having been illegally paid as salary, but failed to substantiate the other charges of the bill, he was entitled to receive out of the money recovered a reasonable amount for counsel fees, but not the whole of his counsel fees and disbursements.</p>

<p>Defendant’s assignor agreed with complainant to manufacture and sell proprietary medicines suggested by complainant, who conveyed to defendant’s assignor and a firm formed by him all his right and title to certain formulae, and granted the exclusive use of his name as a trade mark, in consideration of an agreed royalty on sales. The contract was subsequently modified as between complainant and defendant, by which defendant agreed to pay a royalty on all sales of the preparations “suggested” by complainant and bearing his name, but the contract contained no covenant for forfeiture on non-payment of such royalties.—Held, that complainant is entitled io royalties on all the preparations which were at the time of the modified contract or thereafter sold by defendant as complainant’s preparations, even though he might not have invented or discovered the process for making them, but he is not entitled to rescind the contract for a mere failure to pay such royalties.</p>

<p>• 1. Where an absolute deed is claimed to be a mortgage, the burden of proof is upon the grantor, and the proof must always be olear and convincing, and where the grantee is the wife of the grantor, that fact has an important bearing on the nature of the transaction, and the ordinary presumption of a gift must also be overcome.</p> <p>2. Where complainant is called as a witness in an action to have his deed to decedent declared a mortgage and for an accounting, in which action he is also a party as administrator of decedent, his testimony of transactions with decedent to show the deed was a mortgage is in his own behalf, and not in his behalf as administrator, and is inadmissible under the Evidence act. Rev. MOO, P. L. p. 363 § 4-</p> <p>3. Evidence given after the death of the grantee in a deed, as to her verbal statements made after its execution, in the nature of admissions that the deed was intended as a mortgage must be very clear and convincing, in order to overcome the effect of the previous conduct of the parties to the deed during her life, and the written admissions of the grantor tending to show that the deed was absolute.</p>

<p>On demurrer to bill.</p>

<p>Where a woman and her husband executed a deed for certain of his property to a trustee, the deed reciting' that it was for the purpose of placing the title in the trustee and his heirs free from, the wife’s dower or right of dower which she thereby released, the trustee to hold the property for the sole benefit of the husband and his heirs, to whom he should convey on written demand, the deed created merely a passive and not an active trust and of itself raised an equitable estate in fee in the husband, as to which the deed was not effective as a release of the wife’s dower conferred by the Dower act. 2 Gen. Siat. ¶. 1275 § 1. Construed in Yeo v. Mereereau, 18 N. J. Law (3 Harr.) 887 {181/2).</p>

<p>1. A water company, which is the sole source of water-supply for a borough, is a q»®si-public corporation bound to supply water to the borough at a reasonable price, to be fixed by a competent tribunal in case no agreement between the parties can be reached.</p> <p>2. If the company threatens to cut off the supply unless the borough pays a sum for past service which the borough claims to be unreasonable, a court of equity, in a suit to restrain- the cutting off of the supply and to fix a reasonable 'charge, may at the final hearing determine whether the price demanded is unreasonable, and if so, may enjoin the cutting off of the supply for its non-payment.</p> <p>3. If on application for preliminary injunction a fair case for the trial of the question of -unreasonableness is shown, the court may, on proper terms, enjoin the cutting off of the supply pending the hearing.</p>

<p>1. The directors of an insolvent corporation ordered that corporate property should be transferred to two of their number, who agreed to pay certain creditors. The remaining property was insufficient to pay the corporate debts. The transfer was made in contemplation of the corporation suspending business by reason of its insolvent condition.—Held, (1) that the transfers were void under the Corporation act (P. L. 1896 p. 298 § 61/), and the receiver of the corporation is entitled to recover from each transferee the value of the property received by him; (2) that one of the directors who paid debts of the corporation in consideration of the transfer is entitled to be subrogated to the rights of the creditor to the extent of the debts; (3) that as the transfers were in violation of the duties of the directors and were participated in by all, each is liable for the division of the assets as far as necessary to pay debts.</p> <p>2. Dividends paid out of the capital of a corporation are recoverable by the receiver of the corporation on its insolvency, so far as may be necessary for the payment of debts.</p> <p>3. Where the stockholders of an insolvent corporation did not continue business for the purpose of giving an officer a salary, and the officer drawing the salary acted in good faith, and but for a division of opinion between him and other holders of the stock who controlled the corporation the business would have been closed up several years earlier, the receiver of the corporation, seeking to recover assets to pay debts, could not recover the reasonable salary received by the officer after the insolvency of the corporation. ' '</p> <p>4. Three persons, contemplating the formation of a corporation, entered into an agreement which provided for their salaries as officers of the corporation, and declared that they should be paid from the profits of the business and that the stockholders should be paid dividends before salaries were paid. The certificate of organization did not refer to the agreement, nor was it adopted at the first stockholders’ meeting to organize the corporation. The three persons were elected directors and at their meeting adopted a resolution providing that the dividends and salaries should be paid as specified in the agreement.—Held, (1) that the receiver of the corporation, seeking to recover assets to pay debts, was not entitled to enforce the agreement for that purpose, and could not recover under it salaries paid from the capital with the acquiescence of the stockholders, and (2) that upon a decree in favor of the receiver for payment of debts the court will not on cross-bills by defendants establish the order of liability between the three defendants based on the agreement, but such rights must be enforced by independent suits between themselves.</p> <p>5. A stockholder, receiving in good faith dividends declared by the officers of a corporation, without knowledge that they were paid out of the capital instead of the profits, holds them under a constructive trust, and an action by a receiver for their recovery to make assets to pay debts is barred in.six years.</p> <p>6. Equity will not interpose the bar of limitations to prevent a re- • ceiver of a corporation from recovering from the directors and officers of the corporation dividends paid to them out of the capital of the corporation, such acts being in fraud of the corporation and its creditors.</p> <p>7. A person seeking to enforce a contract entered into between himself on the one hand and a decedent and a third person on the other is, under the express provisions of section 4 of the Evidence act (P. L. 1900 p. 363 § 4), incompetent to testify as to the transactions between himself and the decedent, resulting in the contract.</p> <p>S. The contract set up in this case, if proved, established a purely legal and not an equitable liability.</p>

<p>On demurrer to bill.</p>

<p>P., never having formally subscribed to defendant’s stock, agreed with H. to exchange stock of the E. association for full-paid non-assessable stock of defendant company on a specified basis, and under another agreement giving him the right to £65,000 of the E. association’s stock, he authorized its deposit with certain London bankers for the purpose of having it exchanged for stock in question. Such certificate, however, was not delivered to any officer of defendant company, and the certificate of defendant’s stock, intended to be issued in exchange, though made out, was never received or accepted by P.—Meld, that defendant’s receiver was not entitled to recover against P., as a stockholder in defendant company, an assessment on the stock intended to be delivered to Mm.</p>

<p>1. The common law does not treat agreements in restraint of trade as being illegal in the ordinary sense of the word, but merely as being unenforceable.</p> <p>2. In the absence of statute authorizing it, the attorney-general may not maintain a suit to enjoin insurers against carrying out an agreement regulating rates, though against public policy, as in restraint of trade, and the fact that the insurers are corporations makes no difference.</p>

<p>1. A cross-bill is one brought by the defendant against the complainant (and other parties, if necessary) in another suit touching the same matter, either to obtain discovery of facts in aid of the defence to the original bill, or to obtain full relief to all parties touching the matter of the original bill.</p> <p>2. Only such new facts are properly pleaded in a cross-bill as are necessary for the court to have before it in deciding the question raised in the original suit, and to enable the court to do complete justice to all the parties in respect to the cause of action pleaded in the bill.</p> <p>3. Where an original bill was filed against a city to restrain a nuisance consisting of the pollution of a river, a cross-bill filed by the city, in which it admitted the nuisance, but averred that a certain water company had unlawfully diverted for the benefit of another city water which would otherwise have flowed past defendant city and helped to dilute its sewage, and that another water company had constructed a dam across the river below defendant city, which prevented the passage of sewage down the stream, is fatally defective, as pleading matters not germane to the original bill.</p> <p>4. Such cross-bill, seeking to make the water companies parties defendant, is demurrable for multifariousness.</p> <p>5. The cross-bill is also demurrable for misjoinder of parties.</p> <p>C. In a suit to restrain a city from polluting a water course, it is no defence that the acts of certain others contributed to cause the nuisance complained of, there being no contribution between independent wrongdoers.</p> <p>• 7. Where, in a suit to restrain the further pollution of a water course by a city, complainants stated their damages calculated on the basis of the injuries being permanent, and defendant admitted the nuisance, its answer failed to state whether the taking of complainants’ property rights is to be perpetual or only temporary, and, if the latter, for what time the taking is to continue, is fatally defective.</p>

<p>On demurrer to bill.</p>

<p>1. Where an executrix, chargeable with $2,850, invested the same in building and loan stock certificates, the association, issuing one certificate to her as executrix and another certificate to her individually, was charged with notice that the money paid for the first certificate was trust funds.</p> <p>2. Where a building association was charged with notice that money paid for certain of its stock was trust funds of the estate of a decedent, such association was constructively guilty of a breach of trust in appropriating the money to its own use, entitling the estate to share' in the association’s assets as a creditor, and not as a stockholder.</p> <p>3. Where an executrix invested money" belonging to the estate in stock of a building association, which the latter, with notice of the, trust, appropriated to its own use, but ou its insolvency the money so paid was not traced or identified, and it did not appear that it was still in its hands when it was adjudged insolvent, the estate is not a preferred creditor.</p> <p>4. Where a stock certificate in a building association- certified in the ordinary form that the holder was a stockholder, and contained a provision that the holder was entitled to interest on the amount paid at six per cent, per annum, and that the certificate might be surrendered at any time after three years on giving due notice, when he should receive the full amount paid, with interest, &c., the holder, prior to notice of surrender, was a stockholder, and not a creditor. v</p>

<p>On bill for specific performance of an antenuptial agreement.</p>

<p>1. A strip of land through a farm was conveyed to a railroad for a right of way, by a deed in which the railroad covenanted to provide the grantor with a convenient road crossing. One of the severed portions of the farm was intersected by a road, but there was no method of egress from the other portion, except over the railroad crossing, and through the intersected portion to the road.—Held, that the right to use the crossing is not limited to the use of it as a farm crossing, but that the original grantor and his grantees have a right to use it for any purpose to which the land became adapted.</p> <p>2. The right to use the crossing is not restricted to the original grantor .and his grantees of the whole tract, but grantees of subdivisions thereof are entitled to use it.</p> <p>3. A strip of land through a farm was conveyed to a railroad for a right' of way, by a deed in which the railroad covenanted to provide the grantor with a convenient road crossing and make necessary fences on both sides of the track. The railroad company erected fences with gates .at the crossing composed of sliding bars.—Held, that the company had no absolute right to maintain these bars after they had become unnecessary .and inconvenient, because the land had ceased to be used for agricultural purposes and been plotted and sold for residence lots.</p> <p>4. In a suit to enjoin the maintenance by a railroad company of an ■embankment destroying a crossing to which complainant was entitled under a covenant in his grantor’s deed to the railroad company, evidence held to show that complainant was damaged to the extent of $3,000.</p>

On bill for insolvency, &c. On appeal from receiver’s determination on claims, &c. The defendant company has been decreed to be insolvent, and a receiver has been appointed. The claims of creditors have been presented to him, several hearings have been held and a considerable amount of testimony has been taken. The master has reported his adjudication on the creditors’ claims. There are several appeals from the receiver’s determination, which will be separately considered.

On bill of interpleader, answer and proofs. The complainant, the owner of a lot of land at the northwest corner of Baltic and Kentucky avenues, in Atlantic City, contracted with one Erank Muth that he (Muth) should furnish all the labor and materials for the erection and construction of a building described in a written contract and specifications.

<p>1. An executrix sold her testator’s real estate and took a purchase-money mortgage in her own'name. Subsequently the purchaser executed a mortgage to a third person to secure a loan under an arrangement whereby the purchase-money mortgage was canceled of record so as to make the subsequent mortgage a first lien. Thereafter, the purchaser conveyed the land to a grantee, who assumed the mortgage debts.—Held, that in a suit praying for a decree that the complainant, as substituted administrator with the will annexed of the testator, has a lien on said land for said purchase-money, and that said lien is a prior one, or that said bond and mortgage be reformed so as to make it payable to the executrix as such, and striking out words recognizing the priority of the later mortgage, or that the canceled mortgage be reinstated and be declared a prior mortgage, and that the complainant be subrogated to the position of the executrix as mortgagee, the purchaser and the representative of the deceased executrix are necessary parties.</p> <p>2. The act of 1881 prescribing the character of securities to be.takep by executors and trustees when loaning moneys entrusted to them, does not apply -to a mortgage taken by an executrix to secure a part of the purchase-money on the sale of lands as directed by testator’s will.</p>

On bill, answer, cross-bill and answer, &c. The bill of complaint in this cause is filed by Willis P. Bainbridge, who at the time the bill was filed was plaintiff in attachment issued out of the supreme court of this state against one Henry Allen, a non-resident debtor.

On bill to quiet title, answer and proofs. This canse has been tried on an amended bill, which includes the substantial allegations of the original bill and the answer to} the original bill, which, it has been agreed, shall stand as the defendant’s answer to the amended bill also.

On bill, answer and proofs. The bill of complaint in this case is filed by Esther R. Moore and others to quiet the title to seven undivided twenty-fourth parts of a house and lot of land on Second street, in the city of Camden, of which the complainants are in peaceable possession. The rights of the complainants are disputed, as to. those seven twenty-fourth parts, by the defendant, Annie E. Matthews.

On bill, answer, cross-bill, and answer and proofs. This bill of complaint is filed by Conrad Haberman, the son of Michael and Caroline Haberman, against his sister, Mary Kanfer, and her husband, and against his brothers, George, Joseph and William Haberman, his nephew, Nicholas Kaufer, and St. John’s German Catholic Church, legatees under the will of his mother, Caroline Haberman.

Seven consolidated causes. On bills, answers and proofs. In 1902 the defendant, Frank A. Souder, made a written contract with Atlantic City to build and complete for that municipality a fire-house on Tennessee avenue, to be known as the United States Fire-House. The total contract price for all the work and materials was $2o,oS7. The building was to be erected under the direction and supervision of Mr. Vaughan, as architect.

On demurrers to bill of complaint. The bill of complaint in this cause is filed by Alfred L. Miller and more than four hundred and fifty other persons, who allege themselves to be residents in the State of Colorado, and to be all of the depositors in and creditors of the State Bank of Monte Vista, in the county of Rio Grande, in that state.

<p>Where a judgment was entered, execution was issued and levy made in the debtor’s lifetime, it is entitled to be paid before funeral charges and expenses. Section G6 of the Orphans Court act has no application.</p>

On demurrer to amended bill. The bill of complaint in this cause, as amended, alleges that the complainant was, on December 16th, 1904, appointed receiver of the defendant, a corporation of the State of New Jersey, because of its insolvency, and that he has duly qualified as such receiver; that on July 13th, 1904, the defendant corporation executed to the defendant a chattel mortgage on its stock in trade, fixtures and other personal property in Newark, New Jersey,…

<p>On bill for partition. Answer, cross-bill and proofs.</p>

<p>On petition for divorce. On petition- for rehearing.</p>

<p>On bill, answer, cross-bill, &c.</p>

<p>1. Nature of the statutory action for quieting titles and proper procedure therein considered.</p> <p>2. Under the act for quieting titles to real estate, it is unnecessary for the complainant to set forth the particular character of the defendant’s claim in the bill of complaint.</p> <p>3. If, in such a suit, the defendant affirmatively pleads a legal title, either party has an absolute right to have an issue at law for the settlement of the legal controversy, and, subject to the power to order a new trial, the court of chancery is bound by the result of such issue.</p> <p>4. If the defendant denies the jurisdictional facts of peaceable pos- . session by the complainant, non-pendency of any test suit, and incapacity of complainant to bring a test suit at law or in equity, the court will first try the issue of jurisdiction, on which the question of the respective titles of the parties will not be considered.</p> <p>5. In a suit to quiet title, the complainant alleged that his grantor, acting for himself and his co-owner, prior to August 11th, 1902, entered into a written contract for an exchange of the property in question, which was partly carried out by the delivery of a deed to the property to be exchanged, and that on August 11th, 1904, four days before the attachment, under which the defendant claimed, was issued, the conveyance of the property in question was made and delivered to complainant, but that, because it had not been properly acknowledged, it was taken away by one of the grantors to be' acknowledged, and was not returned until August 15th, 1904, on which date the attachment was issued, but there was nothing to show whether the attachment preceded or succeeded such delivery.—Sold, that the bill is not demurrable as(showing a valid legal title in defendant.</p>

<p>1. There is no presumption that because a testator makes a donation to charity having certain characteristics, he intended that in case the specified charity was impracticable or impossible, or became so after the making of his will, that the funds should be applied to such other and different charity as judicial investigation should decide most like or nearest to the charity specified.</p> <p>2. Where a will exhibits an intention that a donation shall be devoted generally to charity, .or to some more or less narrowly-defined charity, and prescribes a particular mode or means by which the charitable purpose shall be carried out, the failure of the specified mode or means in the lifetime of the testator will not defeat his general charitable purpose, but a court of equity will adopt a new manner or means ey pres to that expressed in the will.</p> <p>3. Where the conditions existing at the time of a testator’s death make the actual charitable purpose of a bequest impossible of accomplishment the gift lapses.</p> <p>4. A testatrix bequeathed the residue of her estate, after paying her debts and certain legacies, to “the hospital fund for sick seamen at Navy Yard, Brooklyn, New York, care of W., chaplain.” W. was not chaplain of the navy yard, and died before testatrix, and there was no fund for the benefit of such seamen.—Held, that the ey pres doctrine did not apply and that the bequest lapsed.</p>

<p>On three applications: (1) to modify an injunction, (2) to grant an injunction, and (3) to punish for contempt.</p>

<p>1. A .bill was filed to set aside a decree of divorce recovered by the defendant. It was alleged that the defendant falsely represented his residence in the original suit, and falsely alleged that complainant had deserted him, and that though defendant had knowledge of complainant’s residence when he sued for divorce, he fraudulently procured the suit to be conducted as against an absent defendant, whose whereabouts could not be ascertained, and that therefore complainant had no opportunity to appear and defend, though she had a good defence.—Held, that the bill is not an original bill to set aside the decree of divorce for fraud, but is a bill of review, and therefore subject to demurrer for failure to allege that it was filed by leave of court.</p> <p>2. Where a decree of divorce is obtained by. fraud, the defendant having no knowledge of the suit, she may apply by petition to have the decree set aside, and the court may exercise the same discretion in granting or refusing the application as on an application to file a bill of review.</p>

<p>On demurrer to bill for an accounting.</p>

<p>■ Where a deed with full covenants of warranty conveyed certain property, including a party wall containing windows overlooking defendant’s adjoining property, and provided that such wall. should remain a party wall, and that both parties should be entitled to rights therein, the grantee in the deed acquired an easement over such adjoining property of the right to keep such windows open and receive light and air therefrom, which was determinable only on the use of the wall for building purposes by the adjoining property owner.</p>

<p>On bill for receiver. On motion to confirm sale.</p>

<p>The contract of a city for the construction of a water works plant stipulated that the city should pay for water at a fixed price according to quantity used, and authorized it to purchase the completed plant for a specified sum on giving- notice of its intent to purchase within one year after the date of the contract. The contractor defaulted, and the city purchased water from a third person for a specified price. Subsequently the third person turned over the supply of the water to the contractor, and it began to furnish water from the incompleted system, and to charge the city the rate fixed in the contract. The city elected to buy the plant at its completion for the price named.—Held, that the city, though in equity the owner of the plant, coulcl not at law resist actions for water supplied at the rate fixed in the contract, and a court of equity would restrain actions at law therefor until the equitable questions were settled, subject to the duty of the city to pay interest on the principal sum agreed to be paid for the completed plant, less payments made on account of water supplied by the contractor, together with the cost of operating the plant.</p>

<p>On bill for injunction and receiver. '</p>

<p>1. The court will take judicial notice that the Passaic river is a tidal stream, the bed of which,-so far as the tide ebbs and flows, is the property of the state.</p> <p>2. The state, as the lowest riparian owner on tidal streams by virtue of its ownership of the bed thereof, so far as the tide ebbs and flows, has the right to have the water of such streams reach its property undiminished in quantity subject to the use of the passing water by upper riparian owners in a reasonable manner for domestic and irrigation purposes, and holds the same in trust for the public, and may grant or restrict the appropriation thereof, .so long as it regards the reasonable rights of others over whose lands it flows before reaching the lands of the state.</p> <p>3. As the lower riparian owner, the state holds the surplus of such flowing water as the common property of its citizens, and has the power to prevent the assumption by others of its sovereign rights, or the conversion of such common property which it holds in trust for the public, the loss of which may destroy the health and comfort of its people.</p> <p>4. The act of 1905 making it unlawful to transport, through pipes, the water of any fresh-water river- of the state into another state for use therein, is not void as a violation of the interstate commerce clause of the federal constitution, for the right of the state to preserve the common property of its citizens cannot be destroyed merely because it is intended to transport the water into another state for use therein.</p>

<p>On bill for injunction.</p>

<p>N. was employed by the complainant to perform any duties which might be assigned to him, and agreed to keep inviolate its trade secrets. While so employed, he had been taught complainant’s secret processes for the manufacture of steel. The defendant company, a competitor, induced N. by improper means to break his contract with the complainant and enter its employ for the purpose of imparting such trade secrets to it. —Held, that the complainant is entitled to a preliminary injunction against both defendants, restraining the disclosure of such trade secrets, and also against the defendant .corporation, restraining it from continuing N. in its employ during the term of his contract with complainant; but it is not entitled, to an injunction against N., restraining him from entering the employment of another during the term contracted for, because the contract did not provide for special services.</p>

<p>On bill to foreclose.</p>

<p>On petition for accounting.</p>

<p>An unrecorded chattel mortgage, unaccompanied by a change of possession of the property, is void as to creditors of a purchaser of the mortgaged property subject to the mortgage.</p>

<p>1. A bequest to a' trustee for the purpose of making such distribution among religious, benevolent or charitable objects as he may select is void as vague and indefinite.</p> <p>2. A bequest of property referred to as received by a testator under the will of his wife will not operate to pass property received by him from her as an intestate.</p> <p>3. The act of 1888, giving administrators with the will annexed the same powers in respect to sales of land as executors named in the will, does not give a substituted administrator power to sell lands which are the subject of an express devise to the executor in trust, with power of sale, for it is a personal trust and is not transmissible.</p>

<p>On petition of receiver for directions as to payment of franchise tax.</p>

<p>A will provided that upon the decease or marriage of testator’s widow the estate should go to testator’s three unmarried daughters, so long as they should remain unmarried, and in case they “all” should marry it should be equally divided between testator’s five children or the issue of deceased children.—Held, (1) that the daughters took the use of the fund during the time they remained unmarried as joint tenants, with right of survivorship between them, and so long as any of the daughters remained alive and unmarried the trust continued for their benefit, although others had died unmarried, so as to make it impossible that “all” should ever many; (2) that the remainder over to the children in the corpus of the estate became vested on the death of the testator and will take effect in possession upon the determination of the life estate of the three daughters by the death or marriage of all of them.</p>

<p>1. The issuance of a writ of assistance rests in the sound discretion of the court, and such writ will never be awarded in a case of doubt, nor will a question of legal title be tried or decided in proceedings looking to the exercise of the power of the court to put a purchaser in possession.</p> <p>2. Where a defendant in a foreclosure suit purchases a paramount title after the decree for sale in the suit, such defendant stands in the same position as a stranger who purchases an outstanding title and enters into possession, and will not be ousted from possession by a writ of assistance.</p>

<p>1. Where a letter of guaranty was dated August 1st, 1903, and recited that the writer would guarantee the payment of “any future purchases during this year,” the guaranty should be construed as limited to the remainder of the year 1903.</p> <p>2. Where a private corporation enters into a contract in excess of its granted powers, but not expressly prohibited, and has received the benefits contracted for, it will be estopped to plead a want of power to make the agreement for the purpose of escaping performance on its part.</p>

<p>1. Costs and counsel fees in divorce cases are not allowed as a matter of right, and awarding them is- usually within the discretion of the court.</p> <p>2. Where a wife files a bill for alimony without being able to prove-the facts upon which the jurisdiction of the court must rest, costs and. counsel fee will not be allowed her on final hearing.</p>

<p>1. Where a company is using a trade secret, the employment of a' person having knowledge that the company is trying to keep secret its methods, is sufficient to raise an implied contract between them that the employe will not divulge it.</p> <p>2. A corporation is charged with knowledge of its agent, employed to purchase a secret process for detinning, that the company from which the purchase is made obtained the secret by fraudulent methods from the true owner, and is not entitled to restrain its use by another company which obtained the secret from it by fraudulent means.</p> <p>3. Where some of the officers of a company resign and fraudulently use for their own benefit a secret process for detinning in use by the company, which it had purchased from one known to have procured it fraudulently from the original owner, the persons who resigned from the company having- subsequently obtained a license from the original owner to use the process, do not hold such license in trust for their former associates, for the unconscientious conduct of the latter gives them no standing in equity.</p>

<p>1. A legacy given in lieu of dower will not abate if at the time of the making of the will the wife had an inchoate right to any dower out of the testator’s estate.</p> <p>2. A will giving testator’s wife the interest on a sum of money, so long as she lives and remains unmarried, “to be left secured on my real estate,” does not require the legacy to be secured by a mortgage on testator’s real property, but creates-a charge thereon without the aid of a mortgage.</p>

<p>On bill for construction of will and appointment of trustee.</p>

<p>1. Where, in, a suit in equity to obtain relief for which there is an adequate remedy at law, defendant does not demur, but answers without claiming the benefit of a demurrer, it is left to the discretion of the court to retain or reject jurisdiction.</p> <p>2. If in such a suit the suggestion of an adequate remedy at law was not made until after the evidence was all in and after a long time had been taken in which to file briefs, it is proper to retain jurisdiction where complainants are subject to limitation of time within which to bring actions.</p> <p>3. Where an applicant for membership in a mutual benefit association was notified by a printed statement, handed him by the investigating committee, that he was ineligible if either of his parents had died of consumption, after which he untruthfully answered in the negative questions as to whether any of his near relatives had died of that disease, and made a false answer as to the cause of the death of his mother, who- had in fact died of consumption, such statements, whether regarded as representations oi; warranties, rendered the certificate void.</p>

<p>3. The proper office of a plea in equity is to reduce the case to a single point, and if the defendant intends to traverse the facts of thq bill, and to set úp a different state of facts, covering the entire subject-matter at issue, it cannot bo done by a plea, but should properly be by answer.</p> <p>2. Where a stockholder sets up that approximately $20,000,000 of stock as a secret profit was made by the promoter out of the incorporation of the company of which, complainant is a stockholder, and he sues the promoter and joins his company, which has refused to bring the suit, and the corporation files a plea that it deems it inexpedient to bring the suit, the only point raised thereby is whether the directors may pi’ohibit a stockholder from bringing such suit if in the judgment of the board it is inexpedient; but the facts set up in the bill are not traversed by the plea.</p> <p>3. A stockholder of a corporation is entitled to sue on its behalf, joining the cox-poration as a defendant, to recover secret profits made by promoters, the corporation, after demand, having wrongfully refused to sue.</p> <p>4. Qumre. Whether, in a suit by a stockholder for the benefit of the corporation, the lattex-, instead of being made a defendant, should not be joined as a complainant; and if it desires to raise the question of the right of the stockholder to bring the suit, whether it should not do so by petition?</p>

Heard on bill, answers and proofs in open court. This is a bill filed by Thomas P. McKenna against Richard E. Corcoran and Joseph A. Duffy. The purpose of the bill is to obtain, on behalf of the complainant, subrogation as against Duffy of the rights of Corcoran, who is the owner of a judgment against Duffy.

<p>Certain donors offered to contribute funds for the erection of a free city public library building, provided that accommodations therein be provided for the city’s industrial education department, and that the city would, raise the balance of the funds necessary to erect the building. This offer was accepted by a resolution of the city council, and thereafter the site was purchased by the donors and conveyed to the city by a plain bargain and sale deed containing no restrictions.—Held, (1) that the city took title, under such deed, on the trusts contained in the offer and acceptance; and (2) that a bill to regulate the use of such a building is within the jurisdiction of equity to establish and enforce a charitable use.</p>

<p>Money used by a husband in paying taxes, interest on mortgage and other encumbrances on the property of his wife—Held, under the evidence, his money, and not entrusted to him by another for that purpose, so that his creditors have a lien on such property to the extent of payments made.</p>

Heard -upon bill, answer, replication and proofs in open court.

<p>On demurrer to bill.</p>

Heard on amended bill and plea. Anna D. Babbitt, the complainant, was the daughter of Charles G. Campbell. Charles G. Campbell in 1898 conveyed all of his 'property, real and personal, to the Fidelity Trust Company, a corporation located at Newark, New Jersey, in trust for certain purposes declared in the instrument.

<p>On appeal from the Passaic county orphans court.</p>

<p>On appeal from assessment of collateral inheritance tax.</p>

On appeal of Joseph B. Acker from the decree of the orphans court of the county of Middlesex granting letters testamentary.

<p>On appeal from a decree of the court of chancery.</p>

J. Eq. SJi'7. From July 1st, 1892, until the filing of'tire present bill, the Young-McShea Amusement Company was the owner of a building fronting on the boardwalk in Atlantic City, and known as “Young’s Hotel.” That company is a Hew Jersey corporation, having fifteen hundred shares of capital stock, and during the transactions involved in this litigation John L. Young owned about fourteen hundred and forty of those shares, and was the treasurer and a director of the company.

<p>Where the subject of an alleged gift remains or is immediately replaced under the apparent dominion of the donor, the gift can be sustained as a donatio causa mortis only upon satisfactory proof that such continuation or restoration of the donor’s dominion was not an integral part of the donative transaction concurred in as such by the deceased party to it.</p>

<p>On appeal from a decree of the court of chancery, advised by Vice-Chancellor Pitney, whose opinion is reported in- 69 N. J. Eq. 23.</p>

<p>1. The act of May 11th, 1905 (P. L. 1905 p. 461), whereby it is made unlawful for any person or corporation to transport through pipes, conduits, &c., the waters of any fresh-water lake, pond or stream of this state into any other state, is constitutional.</p> <p>2. The first section of the bill of rights contained in our constitution, which declares that all men have certain unalienable rights, among which are those of acquiring, possessing and protecting property, &c., does not guarantee to any man the right of acquiring property in anything that is not the subject of private property by law, nor the right of disposing of property that has not been duly acquired under the law of the land.</p> <p>3. The federal constitution, article 4, section 2, in declaring that “the citizens of each state shall be entitled to all privileges and immunities of citizens in the severa) states,”. does not guarantee to citizens of the State of New York, while resident there, all the privileges that they would enjoy if resident in New Jersey.</p> <p>I. A charter acquired under our General Corporation act of 1875 and its supplements (Rev. 1S77 p. 179, p. 1282; 1 Q-en. 8tat. p. 907; P. L. 1876 p. 108), for the purpose of damming rivers and streams, and storing, transporting and selling water, cannot be deemed to authorize the depletion of our streams for the purpose of conveying water beyond the borders of this state.</p> <p>5. The act of May 11th, 1905 (P. L. 1905 p. 461), amounts to a repealer of the power of any company organized under the Corporation act of 1875 and its supplements, to transport water out of the state, even if such power be assumed to have been acquired under the latter acts.</p> <p>6. The General Corporation act of 1890 (P. L. 1896 p. 277 § 8; P. L. 1899 p. 1/78), does not authorize the incorporation of companies for the purpose of diverting water from streams and storing and selling the water thus diverted.</p> <p>7. The common law recognizes no right in the riparian owner as such to divert water from the stream in order to make merchandise of it.</p> <p>8. This state has not, by statute, changed the rule of the common law so as to make the water of our lakes and streams the subject-matter of commerce in the ordinary sense, nor has it authorized water diversion for other than riparian uses, saving for a limited class of purposes beneficial to the people of this state.</p> <p>9. The legislative policy of this state has been, and is, to preserve and administer our water rights for the benefit of our own people, to whom by right of proximity and sovereignty they naturally belong.</p> <p>10. The State of New York, or the people thereof, have no inherent right to withdraw a supjfiy of water from the territory of New Jersey by artificial means.</p> <p>II. The control of fresh water running in the natural streams, and in lakes and ponds that have outlets in such streams (subject to the interests of riparian owners therein) resides in the state in its sovereign capacity as representative of and for the benefit of the people in common, and the legislature may prohibit the abstraction of such water, saving for riparian uses and for purposes authorized by legislative grants.</p> <p>12. The act of May 11th, 1905 (P. L. 1905 p. 461), which forbids the abstraction of such water for transportation beyond the bounds of the state, is not in violation of the interstate commerce clause of the federal constitution, because water abstracted contrary to the statutory prohibition cannot legitimately enter into interstate commerce.</p> <p>13. The State of New Jersey, as owner of the bed of the Passaic river where flowed by the tide, has a proprietary right to the continued flow of the stream, which is paramount to the rights of upper riparian owners to withdraw water for purposes other than those incident to riparian ownership.</p>

<p>1. Where a corporation organized under the General Corporation act of 1875 and its supplements and'amendments (Rev. 1871 p. lio; 1 Gen. Stat. p. 907), issued stock certificates that were stamped “issued for property purchased” as if in compliance with section 55 of that act, and it appeared that the stock in question was not in fact issued for property purchased in accordance with the true intent and meaning of the act—Held, that the receiver of the company might maintain a proceeding' against the recipients of the stock to require them to contribute for the benefit of creditors such proportion of the amount unpaid upon the shares as was required to satisfy the debts of the company, without first filing an independent bill in equity to set aside the supposed contract between the stockholders and the company evidenced by the words “issued for property purchased.”</p> <p>2. Upon a review of the evidence in this case—Held, that the stock in question was not “issued for property purchased” within the fair "intendment of the act, and that the recipients thereof remain liable to creditors notwithstanding those words were stamped upon the stock ■certificates.</p>

On appeals of Frederick Green, individually, and Frederick Green, executor, &c., of Henry Green, deceased. On appeals from a decree of the court of chancery, advised by Vice-Chancellor Bergen, whose opinion is reported in 69 N. J. Eq. 326.

<p>1. A defendant in a suit brought under the act to quiet title of real estate (3 Gen. Stat. p. 31/88) is not entitled, as a constitutional right, tó a trial'by jury in an action at law, as distinguished from a trial of an issue at law directed by the court of chancery.</p> <p>2. The refusal of the chancellor to grant a new trial of an issue at law directed by him, under section 5 of the act to quiet title, is an appealable order.</p>

<p>On appeal from a decree of tlie court of chancery advised By Vice-Chancellor Garrison, whose opinion is reported in 69 N. J. Eq. 450.</p>

<p>On appeal from a decree of the court of chancery advised by Vice-Chancellor Garrison, whose opinion is reported in 68 N. J. Eq. 516.</p>

The subpoena which issued upon the bill was returned as served upon one John H. Muren, a director and vice-president of the defendant company.

Cooper executed two bonds and mortgages for $1,000.each to Thomas S. Godwin. They are dated October 15th, 1890, and were assigned to complainants’ testatrix, Sarah E. De Hart, on October 23d, 1890. The mortgages were both second mortgages on real estate in New York City. The first mortgages, held by the New York Life Insurance Company, were foreclosed in 1891, and the properties were bid in by the first mortgagee for less than the sums owing to it.

The answers of the defendant explicitly deny all the charges and assert, the entire innocence of the defendant. The complainant has been married to the defendant for something over six years, The parties have resided .during their whole married life in the city of Cape May. It is undisputed that their marriage relations were uninterruptedly happy until about the opening of the year 1903. The business of the complainant was that of a Delaware river pilot.

This account, which was duty filed and on the 14th day of March, 1883, approved by the orphans court, ascertained that there came to the hands of Lawrence Mathews, as the guardian of his deceased father, a lunatic, $1,665.22, more than twenty j^ears before the bill was filed in the cause. It seems to me, in view of this circumstance, that this court would not be justified in holding that the money thus received has not been property accounted for.

<p>On appeal from a decree in chancery, advised by Vice-Chancellor Emery, whose opinion is reported in 68 N. J. Eq. 198.</p>

<p>On appeal from a decree of the prerogative court made by Magie, ordinary, whose opinion is reported in 68 N. J. Eq. 562.</p>

<p>The court of errors and appeals will not intervene and determine questions of fact respecting the status of an appellant for the convenience of respondent, but only for the prevention of injustice which cannot be otherwise prevented.</p>

<p>On appeal from a decree of the court of chancery advised by Vice-Chancellor Emery, whose opinion is reported in 67 N. J. Eq. 201.</p>

<p>On appeal from a__ decree of the court of chancery.</p>

<p>On appeal from a decree of the court of chancery advised by Viee-Ohancellor Emery, whose opinion is reported in 68 N. J. Eq. mo.</p>

<p>On appeal from a decree of the court of chancery advised by Vice-Chancellor Garrison, whose opinion is reported in 68 N. J. Eq. 500.</p>

<p>On appeal from a decree of the court of chancery advised byTice-Chancellor Stevens, whose opinion is reported in 69 N. J. Eq. 215.</p>

<p>On appeal from the prerogative court.'</p> <p>The opinion of Magie, ordinary, is reported in 69 N. J. Eq. 463.</p>

<p>On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevens, whose opinion is reported in 69 N. J. Eq. 629.</p>

<p>On appeal from a decree of the court of chancery advised by Vice-Chancellor Emery, whose opinion is reported in 69 N. J. Eq. 176.</p>