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the contributions were as stated by the The defendant insists that they arranged that
rents appear to have been accounted for in
SEY et al. understand the legal effect of a deed to joint
(Court of Chancery of New Jersey. Feb. 13, grantees. So the charging of taxes, etc., in
1903.) Benjamin's account, is of some force to show
MORTGAGES--AFTER-ACQUIRED PROPERTYthat they held in equal shares; but this is
LIEN-PRIORITY. merely inferential proof, and ought not to 1. Where a corporation, after giving a mortbe held to overcome the uncontradicted show gage covering existing and after-acquired proping of the truth that the parties in fact
erty, which was duly recorded, placed poles
and wires belonging to it on the land of anpurchased and paid for the property in the other by agreement with him, the mortgage shares and proportions above mentioned, and was a lien prior to any claim of the landowner. that they have never since in any way ar
Suit by the Monmouth County Electric ranged a division of either the land or the
Company against the Central Railroad Com. profits thereof as equal owners each of one
pany of New Jersey and another.
Decree hall part.
for complainant. The payment of the proportionate shares of the purchase money by the several par
L. M. Garrison, for complainant. J. Le ties being established beyond dispute, a re
Conover, for defendants. sulting trust assiguing to each a quantity of interest in proportion to his payment arose, EMERY, V. C. At the hearing of the and should have effect, unless some definite cause my conclusion was announced, that the act of the parties is proven, which estab complainant, as purchaser at foreclosure sale lishes by equally forceful evidence some (or the grantee of such purchaser), was en. change in their relations to the property, titled to be subrogated to the rights of the whereby each was to hold a different share. mortgagee in the foreclosure suit, to the ex.
tent claimed; that is, the amount paid by by order of any court "shall be confirmed" the purchaser at the sheriff's sale ($250,000).
plainly refers to future sales. This seemed to me then to be the clear
3. Where a sheriff's sale is required to be
confirmed by the court, he cannot require the effect of the decisions from Parker v. Child,
purchaser to accept a deed until confirmation 25 N. J. Eq. 41, and Chilver v. Weston, 27
has been obtained. N. J. Eq. 439, to Boorum v. Tucker, 51 N.
Petition by Abraham V. D. Polhemus, sherJ. Eq. 135, 149, 26 Atl. 456; Pettingill v.
iff, for decree to compel John B. Priscilla to Hubbell, 53 N. J. Eq. 584, 32 Atl. 76. I do
accept deed and complete his purchase at a not change my views upon further consider
sheriff's sale. Denied without prejudice. ation. The question reserved was whether the mortgage was a lien, prior to any claim
Alan H. Strong, for petitioner. Willard P. of the defendants, upon poles and wires
Voorhees, for respondent. erected upon defendant's property subsequent to the execution of the mortgage, by an
EMERY, V. C. On this application I agreement between the mortgagor company
reach the following conclusions: and defendant. The mortgage covered all
1. The act of February 16, 1891 (P. L. p. existing and after-acquired property of the 24), directing confirmation of sales by the mortgagor company, and was duly recorded
court in cases like the present, was not rebefore the execution of the agreement be
pealed by the act of June 14, 1898 (P. L. p. tween the mortgagor company and the de
535), amending the previous acts of 1874 and fendant. Under the agreement, the poles 1887, relating to publication of notices of and wires were erected on defendant's lands,
sales of lands. The act of 1891 was not an and, as I construe its effect, they were the
amendment to the sales act, but was intendproperty of the mortgagor company, and they
ed to apply only to that class of cases in still remained its property at the time of
which, by previous statutes or practice of the the foreclosure. The mortgage expressly cov.
court, confirmation of the sale by a court was ered all after-acquired property, and under
necessary. The only statute requiring this our decision the mortgage is, in equity, a
was the statute relating to bonds and mortiien upon these poles and wires afterwards
gages and foreclosure sales of March 12, acquired, which is prior to mortgagee or
1880 (P. L. p. 255; Gen. St. p. 2111, § 4), and judgment creditors subsequent in date to the
perhaps sales in partition in chancery or ormortgage. Smithurst v. Edmunds, 14 N. J.
phans' court. The statute of 1891 did not at Eq. 408 (Ch. Green, 1862), approved McFar
all extend to or cover that large class of publand v. Stanton Mfg. Co., 53 N. J. Eq. 650,
lic sales upon which no confirmation by court 33 Atl. 962, 51 Am. St. Rep. 647 (Err. &
is necessary. This statute was, therefore, App.); Cumberland Nat'l Bk. V. Baker, 57
one of special application, and did not repeal N. J. Eq. 231, 40 Atl. 850 (V. Ch. Grey,
the previous provisions of the general acts of 1898). The defendants have no lien upon
1874 and 1887 as to sales of land. Neither this after-acquired property, either by the
was it repealed by the subsequent general act agreenient or otherwise, and have only the
of 1898, changing the publications required.
The statute of 1891 can be read in connecright to purchase it at a valuation, or to require its removal on the termination of the
tion with the act of 1898, and both made ef
fective. agreement, which has already expired.
Thus read together, the statutes There must be a decree in favor of the
still require the sheriff to make advertisement complainant, requiring defendants to redeem according to the law of 1898, but, if there is or be foreclosed.
a defective advertisement, then, if the sale is one which is subsequently to be confirmed by the court, the court may, under the con
ditions prescribed by the act of 1891, confirm POLHEMUS V. PRISCILLA.
the sale, notwithstanding the defect in ad
vertisement. The claim that the act of 1891 (Court of Chancery of New Jersey. Feb. 13,
was repealed by the act of 1898 is, for these 1903.)
reasons, not sustained. JUDICIAL SALES - CONFIRMATION IRREGU.
2. The act of 1891 is not a mere validating LARITIES-ACCEPTANCE OF DEEDSTATUTES-REPEAL.
act, applicable to past sales only. The lan1. Act Feb. 16, 1891 (P. L. p. 24), providing guage of the act plainly refers to future sales. that judicial sales of land should be confirmed "All sales made by virtue of any order, judg. potwithstanding irregularity in the publication
ment, or decree of any court of record of of the notice of sale, when the officer making the sale certifies under oath that the sale was
this state, shall be confirmed by the court," otherwise regular, and for a fair price, and etc. It is certainly prospective, whether or the court is satisfied that the interests of the not it be retrospective. The plain language parties were not injuriously affected by the irregularity, was not repealed by Act June 14,
covers sales that are to be thereafter con1898 (P. L. p. 535), amending the acts ap firmed, and without limiting the confirmation proved March 25, 1874, and March 17, 1887, to sales previously made. The act is not an relating to publication of notices of sales of
act to validate sales, but an act concerning land under judicial proceediugs, and changing the publications required.
defective advertisements. There is nothing 2. The act of 1891 (P. L. p. 24) was not a in the title or act to indicate that the advermere validating act, applicable to past sales only, but in providing that "all sales" made 3. See Judicial Sales, vol. 81, Cent. Dig. $59.
tisements concerning which the statute legis whether the receipt of dues by the defendant lates were past advertisements. I think, from the complainant took place under such therefore, that the present case is within the circumstances as to estop the defendant from act, and the petitioner is entitled to the ben denying membership under the forged cerefit of it.
tificate. The dues wbich were paid includ3. The only relief I can give the sheriff on ed the regular payments upon valid shares this petition is to have the sale confirmed un held by the complainant, as well as payder the act of 1891. The respondent was not dients upon the shares represented by the bound to accept a deed until a confirmation forged certificate. The treasurer of the comunder this act had been made, and a deed pany, to whom the payments were turned tendered after confirmation. The right of over by MacDermott, the secretary, who is the sheriff to proceed to specific performance sued the forged certificate, bad no knowlis based on the fact, and only on the fact, edge that the payments were made on these that he has fully complied with his duty as forged certificates, and credited the entire an officer executing a statutory power, and payments to the account of the valid shares, thereby is entitled to call on the purchaser to taking them to be payments in advance. complete the sale upon his part. It may be, Under the by-laws there was nothing to prehowever, that the parties have raised ор vent payments in advance, as the payments this application all the questions intended to (article 13, § 3) were to be made “on or be be raised, if a deed should be tendered after fore" certain days fixed. No payments were confirmation under the act of 1891; and, if ever credited to the account of any shares 60, I may, by consent of the purchaser, now represented by the forged certificates. Unorder the acceptance of the deed after con der these circumstances, no estoppel to deny firmation, with the same effect as if a tender the validity of the forged shares, or the right had been made after confirmation. If he to membership based on them, can arise. does not consent, the present application will Membership, in such case, could be rested be denied, except as to the confirmation of only on the ratification of the illegal issue the sale, but without prejudice to a renewal by receiving payments thereon, and the conseof the application on tender of the deed after quent estoppel against subsequently denying confirmation of sale.
niemibership as the effect of the payments
less the act claimed to be a ratification is COLUMBIA COUNCIL, NO. 77, JR. 0. U. done with knowledge of the previous invaA. M., OF MATAWAN, N. J., V. BEL lidity or irregularity, or of the facts from
MAR BUILDING & LOAN ASS'X. which they result. The treasurer in this case (Court of Chancery of New Jersey. Feb. 13,
was the only officer entitled to receive the 1903.)
payments for the company; and even as
suming that he had authority, by their mere
certificates (which I do not intend to decide), 1. One who held a forged certificate of stock
the payments made on the fraudulent shares in a building association, and also valid certificates, made payments of dues on them all
were by him intended to be received and to the association's secretary, who had issued were received and credited as payments on the forged certificate, and who had no author
the valid shares, and without knowledge on ity to receive payments for the company. The secretary turned the money over to the treas
his part of the existence of the forged urer, who was ignorant of the existence of the shares. There was, therefore, no ratification forged certificate, and who, supposing the pay- | by the company, and no estoppel to deny the ments to be made on the valid certificates,
validity of the certificate can arise. The credited them thereon as advance payments, which, under the by-laws, were allowable. The payment by complainant on account of the treasurer was the only omcer entitled to re shares represented by the forged certificate ceive payments for the association. Held, that
was actually made to MacDermott, who was the association was not estopped to deny mem. bership by virtue of the forged certificate.
the secretary of the company. He undoubt
edly knew of the forgery, for he was the Bill by Columbia Council, No. 77, Jr. O.
person who issued the certificate to comU. A. M., of Matawan, against the Belmar plainant. But as secretary he had no auBuilding & Loan Association, to establish
thority to receive the payments for the commembership in the association. On bill, an
pany, and the payment to him by complainswer, replication, and proofs. Bill dismissed.
ant for the purpose of turning over to the J. C. Conover and A. E. Arrowsmith, for treasurer must be considered to have been complainant. Frank Durand, for defendant. made to him as the agent and for the con
venience of the complainant, and it was at EMERY, V. C. Complainant's counsel bave complainant's, and not defendant's, risk, that not submitted any briefs, and the cause will the payments were turned in by MacDermott, not be held any longer for them. The com and credited by the treasurer as payments plainant has no claim for membership in the made on the valid shares only. The com association based on the forged certificate it pany cannot be held in this case as estopself, and the only question in the cause is ped, by MacDermott's dealings with com
plainant, from denying the validity of the details of the transactions so far as they shares.
have come to his knowledge, and asks a disThe bill of complainant seeking to estab closure of all the incidents whereby the title lish its membership by virtue of this forged of the trust property has been disposed of, certificate and its alleged payments thereon and an accounting for, and the payment back must be disrnissed. The dismissal, however, to the trustee of, the profits of the trust will be without prejudice to any action which property wrongfully retained, and also a rethe complainant may have at law for the conveyance of the portion of the trust lands, repayınent of the amounts paid on the forged which, it is alleged, have been wrongfully shares or otherwise.
obtained by the defendant Fithian for his personal use.
The bill of complaint is challenged under (64 N. J. E. 259)
the 213th rule, in three particulars: The first RILEY V. FITHIAN et al.
is as to the 12 or 13 pages in which the (Court of Chancery of New Jersey. Jan. 23,
trustee narrates the origin and the terms of 1903.)
his trust. The criticism made of this portion
of the bill is that it is wholly immaterial as EQUITY-PLEADING-BILL-TRUSTEE_TERMS OF TRUST-DILIGENCE-COSTS.
to whether the complainant is trustee or not; 1. In au action by a trustee to recover trust if he is, it is wholly immaterial what the property alleged to have been wrongfully ob terms of his trust are; that the gravamen of tained by the defendant parts of the bill nar his bill is the demand that the complainant rating the origin and terms of the trust and the parties thereto should not be stricken out
should have an accounting from his agent as immaterial.
employed to dispose of his property; and it is 2. An allegation in the bill in an action to re insisted that the origin and nature of the cover property of which complainant claims to have been defrauded that he consulted his
trust under which the complainant holds the counsel as to the transactions, and directed lands in question may be wholly left out his counsel to investigate the facts to enable without any detriment to the complainant's him to take legal steps for relief, should not
An examination of the bill of combe stricken out, as it tends to show diligence and explain delay, and is not prejudicial to the
plaint indicates that the narration of the deiendant.
origin of the trust under which the complain3. The insertion, in a bill by a trustee to re ant holds the trust property is necessary, in cover trust property, of a copy of a letter writ
order to show who are the cestuis que trustten by complainant's counsel to defendant before suit, stating counsel's views as to the legal
ent, who, in proceedings affecting the trust basis of complainant's claim, and suggesting property, should be made parties, unless the an "adjustment without recourse to the
securing of their appearance is greatly inconcourts," is proper, as being matter for consid
venient or practically impossible. The Court eration in the allowance of costs.
of Appeals settled this in the case of Tyson Action by Franklin Riley, trustee, against
V. Applegate, 40 N. J. Eq. 311. To strike out Francis R. Fithian and others. Motion to
the history of the origin of the trust would strike out parts of bill. Refused.
leave the complainant declaring that he was Clement H. Sinnickson and W. A. Logue, a trustee, without disclosing his trust, or for complainant. E. A. Armstrong and Da- showing who were entitled to the benefits of vid J. Pancoast, for defendants.
it. The narrative of the creation of the trust
is somewhat extended, but the transactions GREY, V. C. (orally). This matter may be out of which the trust grew were themselves presently disposed of, as the elaborate argu both complicated and voluminous. They can. ments of counsel on both sides have fully not be stricken from the record without cripdiscussed every view which may be taken pling the complainant's statement of his of the points in dispute. The bill of com cause of action. The above objection to the plaint is filed by a trustee, who devotes the bill must be overruled. first 12 or 13 pages of the bill to a definition The next criticism of the bill of complaint of the origin and character of his trust. is that it contains an allegation that there The principal defendant is Francis R. Fith was a consultation between the complainant ian, who is alleged on the face of the bill to and his counsel touching the transactions inhave been the agent of the complainant, volved, and a direction by complainant to whom he employed to sell the trust property. his counsel that they should make such inThe other defendants are parties claimed to quiry as to the facts as might be necessary bare been associated with Mr. Fithian in the to enable him to take legal steps for relief. doing of the acts alleged to be wrongful. The This is objected to as irrelevant. The obbill alleges that the trustee employed the de ligation upon a party who thinks he has reafendant Fithian to effect a sale, and charges son to believe he has been defrauded of propthat he and those he associated with him erty is to make diligent inquiry, and pursue have wrongfully retained part of the trust his remedy before the defendants, if they be property, and have sold and retained the in fact fraud doers, may so act as to change profits of another part; that these acts were the nature of the title or involve persons who concealed from the complainant (trustee), are innocent as to the fraud. If, upon the and have resulted in great loss to the trust face of the bill of complaint, it appears that estate. The trustee complainant states the the complainant has supinely slept after
warning of his danger, he might be liable to 3. Where a bankrupt was examined in the a charge of laches from a party who, because bankruptcy proceedings concerning an alleged of this negligence, might have become a bona
preference, his testimony given there was only
admissible as against an alleged preferred credfide purchaser of the property. The inser itor in an action in the state court to set aside tion of a clause tending to explain delay in such preference as affecting the bankrupt's procedure, or to show diligence, while not of
credibility as a witness in the state court.
4. Defendant loaned money to er brother, vital importance, is in no way prejudicial or
as a temporary loan, which was renewed for embarrassing to the defendants. It should several periods, of six months each, until 1896, not be stricken out of the bill.
during which the brother was solvent. InterThe third criticism of the bill of complaint
est was paid on the note until July, 1900, when is the insertion therein of a copy of a letter
defendant requested security, and the brother
informed her that he would give a deed of cerwritten by the counsel of the complainant to tain lots for the note, which defendant agreed the defendant Fithian at or about the ending
to accept. Nothing was said as to the brothof a correspondence between them regarding
er's finances, and he executed a deed of the
lots to her August 8, 1900, and had same rethe subject-matter of the present lawsuit. corded the next day. He filed a petition in The objection is that this letter is wholly ir bankruptcy August 17th, and was adjudicated relevant and immaterial as a part of the com
a baukrupt on September 17th, after which
defendant obtained the deed from the regisplainant's statement of his cause of action;
ter's office, having previously been informed that it is in the nature of a law brief, and thereof by her brother. Held, that the facts has no proper place in the bill of complaint.
were insufficient to show that at the time of The letter in question is a statement by
the conveyance she had knowledge or reason.
able cause to believe that her brother was incomplainant's counsel to the defendant Fith
solvent, or that he intended the deed as a ian of his view of the legal basis of complain-preference. ant's claim, and expresses a willingness to
5. The deed was delivered when the grantor
left it for record, and therefore the title to the confer for "adjustment without recourse to
property did not vest in the bankrupt's trusthe courts,” etc. It occupies about one page tee, under Bankr. Act, $ 70, subd. 5 (U. S. of the bill. In equity costs are not necessa Comp. St. 1901, p. 3451), vesting in such trusrily awarded to the successful party in the
tee property which prior to the filing of the
petition the bankrupt could have transferred, final decree. The showing on the face of a
or which could have been levied on by judicial bill of complaint that previous to its filing process. the defendant had been warned of his equitable duty, and requested to perform it, is
Bill by Jerome T. Congleton, as trustee,
against Jacob Schreihofer and another, to set pertinent allegation. The complainant, if successful in the cause, may appeal to the
aside a conveyance as an alleged preference fact that the defendant contested the suit
by a bankrupt. Bill dismissed. with previous warning of the legal basis of W. T. Day and J. E. Howell, for comthe complainant's claim, as a justification for plainant. E. S. Black, for defendants. the allowance of costs.
None of the specified criticisms of the bill EMERY, V. C. Complainant, a trustee in of complaint can be sustained. The motion
bankruptcy of Jacob Schreihofer duly adjudito strike out is therefore refused, with costs. cated a bankrupt by the United States Dis
trict Court, files this bill to set aside a conveyance made by the bankrupt to defendant
Elizabeth Steigert. The deed was dated and CONGLETON v. SCHREIHOFER et al. acknowledged August 8, 1900, and recorded (Court of Chancery of New Jersey. Feb. 3,
August 9, 1900. The petition in bankruptcy
was filed August 17, 1900, and the date of 1903.)
adjudication of bankruptcy was September BANKRUPTCY STATUTES - CONSTRUCTION
17, 1900. Under the United States bankrupt CONVEYANCES - DELIVERY PREFERENCES - GRANTEE - KNOWLEDGE OF BANKRUPT'S
act of 1898, $ 70 (U. S. Comp. St. 1901, p. INSOLVENCY.
3451), the trustee is, inter alia, "vested by 1. Bankr. Act, $ 67, par. "e" (U. S. Comp. operation of law with the title of the bankSt. 1901, p. 3149), provides that conveyances rupt, as of the date he was adjudged a bankby a bankrupt within four months prior to filing the petition in bankruptcy, with intent and
rupt, to all
(4) property transferpurpose ou his part to hinder, delay, or defraud red by him in fraud of his creditors; (5) his creditors, shall be void as against such property which prior to the filing of the creditors, except as to purchasers in good faith petition he could by any means have transand for a present consideration. Held, that such act referred only to transactions which
ferred, or which might have been levied upon were previously void under the statute of and sold under judicial process against him. frauds, and hence a conveyance by a bankrupt
Section 60, par. "b" [U. S. Comp. St. to a bona fide creditor for a precedent debt, by
1901, p. 3145), also provides "that if a bankway of preference, was not invalid thereunder. 2. Where a preferred creditor of a bankrunt
rupt shall have given a preference within had been previously examined in the bank four months before the filing of the petition, ruptcy proceedings in regard to the convey.
or after the filing of the petition and before ance, such creditor's evidence was admissible against her in a subsequent action to set aside
the adjudication, and the person receiving it, the conveyance in a state court.
or to be benefited thereby, or his agent act
ing thereon, shall have had reasonable cause s 1. See Bankruptcy, vol. 6, Cent. Dig. $ 259.
to believe that it was intended thereby to