Volume 9 — Delaware Chancery

Exceptions to the Report of an Auditor appointed to ascertain the persons entitled to a legacy paid into the Court of Chancery.

Motion to Dismiss Bill for Want of Equity. The bill in this cause was filed by Albert J. H. Holschumaker and others, heirs at law and devisees under the will of William Holschumaker, to restrain the collection of a judgment obtained by the New Castle Water Works Company against Henry Holschumaker, Administrator d. b. n. c. t. a. of William Holschumaker, deceased, in an amicable action in the Superior Court for New Castle County.

Bill in Equity. The bill alleges that on August 31 st, 1907, the Wilmington and Brandywine Leather Company assigned all of its manufactured stock, book accounts and bills receivable to William T. Lynam, as trustee, to sell and collect and distribute the proceeds thereof among “such creditors of the said company as shall become parties hereto, by signing this Agreement.” On September 14th, 1907, and before all of the creditors who became parties to this agreement had executed…

Bill for an Accounting by a Trustee. The bill was filed by beneficiaries under a deed of trust against the trustee to compel settlement, and was in the nature of a bill for an account.

Petition for the Execution and Delivery of a Deed by a Trustee in Partition Proceedings.

Petition for the Appointment of a New Trustee. This is a petition by a cestui que trust for the appointment of a trustee in the place of a deceased sole trustee.

Petition for Leave to Intervene in a Suit for Specific Performance. On April 13th, 1910, Charles H. Ehrenstrom filed a bill against George W. Phillips for the specific performance of an agreement for the sale of land, alleging, among other things, that the defendant entered into an ageeement for the sale of the same property to Daniel Cauffiel and was about to make a conveyance of the property to him.

Bill for Instructions by a Trustee. The bill alleged that William Holland Jacobs died January 26th, 1891, leaving to survive him a widow, Jennie K. Jacobs, and one child, Elizabeth Vaughan Jacobs, the defendant, and in his lifetime made his will, which was duly proved before the Register of Wills for New Castle County.

Bill for the Appointment of a Receiver. The defendant Company, with an authorized capital stock of $25,000, was organized for the purpose of supplying water to the inhabitants of the town of Georgetown, and, under authority of its charter, on August 1st, 1902, executed a mortgage covering all of its propetry to secure bonds aggregating $25,000.

Petition For Partial Distribution of Assets of Receivership Estate. A receiver having been appointed for the defendant company, numerous claims, consisting of book. accounts, bonds and promissory notes, were filed, and exceptions to the validity and priority -of a large number thereof were taken by the receiver.

Bill to Foreclose Corporate Mortgage. On May 23rd, 1907, receivers were appointed for the Wilmington, New Castle and Southern Railway Company, and thereafter, by leave of the Chancellor, the complainant filed this bill to foreclose a certain mortgage executed by the Wilmington and New Castle Electric Railway Company prior to its consolidation with the New Castle and Delaware City Railway Company into the Wilmington, New Castle and Southern Railway Company.

Objections to Confirmation of Sale Made in a Suit to Foreclose a Mortgage. Pursuant to an order of the Chancellor, William M. Hope, receiver of Chester County Electric Company, one of the defendants in this suit, sold the mortgaged property and made return thereof, and notice was given by newspaper advertisement that objections to the confirmation of the sale should be filed on or before Monday, September 26th, 1910, and be heard on October 3rd, 1910.

Injunction Bill. On February 18th, 1882, the complainant became the owner of the building located at the southwest corner of Fifth and Market Streets, in the City of Wilmington, immediately adjoining a building located on Fifth Street and extending west to Shipley Street.

Bill for Construction of a Will. Joshua Pyle by his will directed his estate to be converted into money and made the following gift, among others: “To my daughter, Esther Ann Paynter, wife of Thomas Paynter, the sum of twelve hundred dollars, which sum I direct shall be invested by my executor, herein after named, the inter- «- est of which sum shall be paid annually to my daughter, Esther Ann Paynter, during her natural life, and at her decease, both principal and interest…

<p>Certain land was conveyed to H. and G. in trust for G.’s wife for life, and after her death for G. for life, and on the death of the survivor then to convey to the child or children of G. and his wife, and the issue of such of them as might be dead leaving issue, on the youngest child attaining twenty-five years of age. Held that, G. having survived his wife and died, the trust terminated, and the title to the property should have been conveyed by the surviving trustee to the children of G. and his wife; they having all reached the age of twenty-five..</p> <p>Certain property was conveyed to H. and G., in trust for G.’s wife for life, and after her death for G. for life, remainder on his death to their child or children, to be conveyed when the youngest child reached twenty-five. The deed also provided that on the death of either of the trustees the survivor might appoint a new one. G., as surviving trustee, by deed appointed his son as co-trustee, and died, having survived his wife. Instead of conveying as trustee, the son in 1904, claiming that no-new trustee had been appointed, and that the legal title had descended to him, subject to the trust, as the eldest male heir of G., asked that he be relieved as trustee, and that C. be appointed to convey the trust property to those entitled. This prayer was granted, and C., as trustee, received from the son a conveyance of only a part of the property, and conveyed to the remaindermen, as tenants in common, such part freed from the trust. The son having died, his undivided interest in the part of the property so conveyed was sold to pay debts, and purchased by complainant, who was one of the remaindermen and had acquired the interests of all the others except the son. Held that, on the death of G., it was the son’s duty, as sole surviving trustee, to convey the property to the remaindermen; they being then of the required age, and, eight years having expired since that time, it would be conclusively presumed in equity that he had done so; and that the remaindermen, therefore, had title to their respective shares in the whole property as tenants in common, discharged of the trust; and hence the appointment of C. as trustee, and the conveyances to him by the son as trustee, and by C. to the remainder-men, of a part only, where wholly nugatory, and the undivided interest of the son in the part not sold to pay his debts passed to his devisees, so that complainant could not compel a conveyance to herself thereof under the trust.</p> <p>Where the sole remaining duty of a trustee is to convey the trust property to the beneficiaries, a conveyance will be presumed, if there be a sufficient reason for the presumption and the object of it be to support a just title.</p>

Petition for Allowance of an Appeal from an Order Overruling a Demurrer. On May 1st, 1911, The Penn Syndicate, Guardian of Amy Eugenia Clark, one of the defendants, filed a petition praying the allowance of an appeal from an order entered in conformity with the foregoing opinion overruling the demurrer.

Injunction Bill. The relators were residents and taxpayers of the town of Newark, and filed this bill for the purpose of restraining The Council of Newark from leasing to the Newark Water and Electric Company the light and water plants belonging to said town.

Bill for Specific Performance. The bill is for specific performance of an agreement for the sale and purchase of land, the purchaser, having declined to fulfil his agreement because the title of the seller to the land was not good.

Injunction Bill. The Rehoboth Beach Camp Meeting Association of the Methodist Episcopal Church was mcorporated by special act of the Legislature of Delaware in 1873 and became the owner of a large tract of land along the Atlantic Ocean in Lewes and Rehoboth Hundred, and the land was plotted and laid out in building lots. In the plot certain avenues, streets and highways were dedicated to the use of the public.

Bill to Set Aside Certain Conveyances. The bill is by the trustee in bankruptcy of W. 0. Hudson, individually, and also of the firm of which he was a member, and seeks to set aside conveyances made by Hudson before bankruptcy, through a third party to his wife, without consideration and to defraud creditors. It alleges the giving of a note by Hudson to Hull in March, 1907, for $3,041.76 for Hull’s interest in the firm of which Hull was then a member.

Bill by Stockholder for Cancellation of Shares of Stock. The complainant was the holder of a majority of the shares of capital stock issued by the defendant corporation and by his bill sought to have cancelled the share ; of stock issued to the defendants, Ashworth, Kramer and Brown, as well as the appointment of a receiver for said defendant corporation pendente lite, to conserve its property from dissipation pending final determination of the cause.

Objections to Confirmation of Receiver’s Sale. A bill was filed by a stockholder and creditor of the Beacon Hill Real Estate Company, alleging that it was organized under the general corporation Act in 1930, and having thereafter failed for two years to pay the franchise tax due the State of Delaware, the Governor, on February 17th, 1906, by proclamation decreed that its charter was thereby repealed in accordance with the franchise tax Act, that it had never been reinstated,…

Injunction Bill. The bill is filed to restrain a suit at law. On October 5th, 1891, John M. Newell executed a bond to his mother, Maria Newell, the complainant, for $2000, he be:ng then indebted to her in that amount, and judgment was entered on the bond on the same day.

Petition for Payment of Allowances to Receiver and his Counsel out of Funds Paid into Court in Foreclosure Proceedings. The matter before the Court is as to allowances to the receiver of the Chester County Electric Company for compensation for himself and his counsel.

Petition of Receivers for Instructions as to Disposition of Certain Property. On August 1st, 1896, the Wilmington and New Castle Electric Railway Company, under authority of the Act of the Legislature by which it was incorporated, mortgaged its railway, equipment, corporate rights and franchises to secure bonds issued in order to construct its railway.

Demurrer to Bill in Equity : The bill is demurred to on the ground of multifarious ness. It was brought by certain grandchildren of Winifred Cottingham, deceased, having a common interest, to recover their shares in certain real and personal property obtained, as is alleged, from Winifred Cottingham while she was mentally incompetent through fraud of the defendant, Margaret A. Healy, and other persons unknown.

Petition by a Stockholder of a Corporation for the Summarily Ordering of an Election of a Board of Directors. The petition alleged that the National Lumber Vulcanizing Corporation, after its incorporation under the general corporation law of this State, adopted by-laws, Article IV of which provides, as follows: Section 1.

<p>A trustee cannot purchase trust property, either directly or indirectly, whether there be one or more trustees, unless the beneficiary assent to or ratify the sale, or be guilty of loches.</p> <p>The prohibition is rigidly applied as a preventive of fraud, and is enforced though the purchase bo bona fide and for full value.</p> <p>While the trustee remains the owner of the trust property so purchased, the deed will be declared void; and if he shall have parted with it at an advanced price, he is made to account for the difference in value so gained.</p> <p>Where directors of a corporation by special agreement with the stockholders are constituted trustees to wind up the affairs of the corporation, they have, in addition to the usual limitations upon dealings of directors respecting corporate property, the limitations imposed on trustees and cannot purchase the property of the corporation without the knowledge of the stockholders.</p> <p>One of three directors, who were trustees to wind up the affairs of a corporation, obtained from the co-trustees an option to purchase the property of the company to enable him to form a new corporation to acquire it, and organized such new corporation, in which he, his wife and son were the only stockholders. The consideration for the conveyance to the new corporation was the assumption of the debts of the old company, and these debts are paid after a re-sale of the property by the new corporation at an advance and from the proceeds of that sale Held, there was a breach of trust and there being no equity in favor of the new corporation or its stockholders the new corporation will be declared to hold a purchase money mortgage given to it by its vendee for the benefit of the stockholders of the original company.</p>

Bill for Instructions to a Trustee and Executor. On April 27th, 1909,-Elizabeth Campbell executed a deed of trust to the Security Trust and Safe Deposit Company, disposing of $2,500 of her estate, and on the same date made a will, in which said Company was named as executor, disposing of the balance of her estate.

Exceptions by Receiver to Claim for Damages for Breach of Contract of Service.

Petition by Stockholders for Leave to Bring a Class Bill Against Receiver and Certain Directors.

Bill for the Appointment of a Receiver. This cause was heard on a motion for a decree on an amended bill taken pro confessa. The material allegations, in addition to those' appearing ante p. 84, appear in the following opinion.

<p>The Court of Chancery has jurisdiction to issue a commission de lunático inguirendo respecting a peison who has real estate within the jurisdiction, though he be a non-resident.</p> <p>Where there was no Chancery rule for the giving of notice to an alleged lunatic upon the filing of a petition for a writ of de lunático inguirendo, it may be given in such a way that the Chancellor will be sure that the supposed lunatic, if in such condition that a notice will be proper and useful, has knowledge of the proceeding, though living in another jurisdiction.</p>

Bill for Construction of a Will and Instructions to Trustee. The bill was filed by The Equitable Guarantee and Trust Company, trustee under the will of William Bowe, • deceased, for the construction of item thirteen of his will, and all the parties in interest that could be affected by the interpretation of the clause have been made parties and were represented by counsel. The item under consideration is as follows: “Thirteenth.

Petition for Possession of Books of a Corporation. There are two conflicting applications pending before the Chancellor by which the ownership of the books and papers of The Reading Finance and Securities Company is claimed, one by the corporation and the other by the Citizens’ Life Insurance Company of America.

<p>Exceptions to a Claim of Priority for Services Rendered by a Director as Yard Foreman. Harry R. Loose, a director of the defendant company, filed a claim against the funds in the hands of the receiver for services rendered as yard foreman, and claimed priority of payment. The cause was heard on exceptions filed by the receiver to the claim of priority.</p>

Bill for the Re-payment of Money Deposited with the State Treasurer to Guarantee the Construction of a Railway. The Delaware General Electric Railway Company was duly incorporated on September 6th, 1899, under the general corporation law of the State of Delaware, and deposited $17,500 with the then State Treasurer, as required by § 105, c. 273, i). 21, Laws of Dealware.

Exceptions -as to Allowance of Interest on Two Mortgages. A receiver for the defendant company having heretofore been appointed, in due course of administration of its affairs, claims against said company were filed, among them being claims for city and county taxes. The holders of two mortgage liens against the same real estate also filed claims for the principal thereof and interest .to the date of payment and exceptions were filed by the receiver to the interest claims.

Bill to Enjoin an .Obstruction to the Use of an Alley. The bill is to enjoin the continuance of an obstruction of an alley, to the use of which the complainants are entitled over land of the defendant, in common with the defendant.

The facts are stated in the opinion of the Court and in the report of the case in the Court of Chancery, ante p. 62.

Appeal prom the Court op Chan'cery. This was an appeal from the decree in the above stated cause, entered by the Chancellor in accordance with an opinion filed on July 5th, 1910, and reported ante p. 70. The assignments of error are, as follows: 1.

In the matter of the petition of William Beadcnkopf to set aside sale by Robert Penington, receiver. Api eal from the Court of Chancery, respecting the petition of William Beadenlcopf to set aside a sale made by the receiver of the Beacon Hill Real Estate Company. The facts are stated in the opinion of the Court and in the report of the case in the Court of Chancery, ante p. 232.

Exceptions of William T. Dayett to the first and final account of Merritt N. Willitts, administrator of William H. Doclcety, deceased. The facts are stated in the opinion. Argued before Curtis, Ch., and Hastings, J.

■Petition of widow for leave to retract her election of dower. The facts appear in the opinion. Argued before Curtis, Ch., and Hastings, J.

Objections to Confirmation of Sale. The administratrices of Peter J. Donaghy, deceased, having sold certain real estate of the deceased for the payment of debts, under an order of the Orphans’ Court, made return thereof, and aslced that the amount deposited by the purchaser be declared forfeited for failure of the purchaser to pay the balance of the purchase money within the time limited in the conditions of sale.

Petition-for Assignment of Dower. By her petition, Ellen B. Tomlinson, widow of Daniel R. Tomlinson, deceased, alleged that her husband, after marriage, became siesed of a farm in Milford Hundred, containing about one hundred and sixty-six and one-half acres, and that on August 29th, 1863, the farm was sold by the Sheriff on a writ of venditioni exponas issued on a judgment in favor of James Cook, for the use of Joseph Hill, against her husband, Daniel R. Tomlinson.