(108 A.) bankruptcy was allowed to intervene and be- ings of the sitting justice are incorrect. On come a party to these proceedings. The court further finds: "That the evidence sustains the allegations in the plaintiff's bill that this transfer was fraudulent as to the plaintiff and was intended to defeat and delay him in collecting any claim he might have against the defendant by reason of having been run into by said defendant's automobile." The sitting justice also found: "That the evidence did not disclose whether there were any existing creditors at the time of the transfer, and, if not, the evidence does not disclose an intent to defraud any subsequent creditors except the plaintiff. Therefore the right of the trustee in bankruptcy in these proceedings to relief in behalf of other creditors is not proven." the contrary, we are very clear that no other conclusion could fairly be reached, and this, while deprived of seeing and hearing the witnesses and the opportunity to judge of their credibility, an advantage possessed by the sitting justice, and necessarily entering into his consideration of the equities involved. We find no error. The entry will be: Bill sustained. Exceptions overruled. Decree of the sitting justice affirmed. (89 N. J. Eq. 230) BROWN v. BERRY. May 20, 1918.) 1. MORTGAGES 191-CHARACTER OF MORTGAGEE'S POSSESSION. The exceptions taken were to the jurisdic- (Court of Errors and Appeals of New Jersey. tion of the court, to a refusal to adopt certain requested findings, to overruling the demurrer inserted in defendant's answer, to the admission of testimony of the referee in bankruptcy, and to the refusal of the presiding justice to dismiss the bill. In each of the foregoing instances the reasons underlying the exceptions are the same, a challenge to the equity powers of the bankruptcy of the defendant Roscoe L. Skillings. [1] That a creditor may proceed in the state courts to set aside a transfer fraudulent as to him, notwithstanding the grantor has been adjudicated a bankrupt, when the trustee has not taken action, is well settled, and it is equally well settled that a creditor whose claim is not provable in bankruptcy may so proceed. [2] A trustee in bankruptcy may also proceed in the state courts in behalf of all the creditors to set aside a fraudulent transfer, or in proper cases may intervene in behalf of all the creditors in an action brought by one creditor for that purpose. Collier on Bankruptcy, p. 1178; Thompson v. Robinson, 89 Me. 46, 35 Atl. 1002. The finding of the sitting justice, however, renders further consideration of the exceptions unnecessary, inasmuch as his conclusion is: "That the right of the trustee in bankruptcy in those proceedings to relief in behalf of other creditors is not proven." [3] Moreover, it does not appear that the rulings complained of were erroneous, or that the defendant was aggrieved thereby. When a party takes exceptions to the rulings of a presiding justice, it is incumbent on such party to show affirmatively that there was error in such rulings, and that he is aggrieved thereby. Moore, Appellant, 113 Me. 195, 93 Atl. 180. mortgagor for determination of claims to the premises, under 4 Comp. St. 1910, p. 5399, involving issue of whether mortgagor had paid any interest during the period of more than 20 years that mortgagee had been in possession, held, under the evidence, that mortgagee had gone into possession upon mortgagor's surrender of the premises because of his default in payment of interest and not pursuant to agreement that mortgagee's possession should keep down the interest. In action by mortgagee in possession against 2. MORTGAGES 144-ACQUIREMENT OF TAX TITLE BY MORTGAGEE IN POSSESSION. Where land in possession of mortgagee was gagee's possession, after repayment of taxes sold for mortgagee's nonpayment of taxes, mortto township's assignee of certificate of sale, who had paid tax lien for mortgagee's benefit and taken assignment of tax title as security for repayment, became again, if it had not been continuously from the start, that of a mortgagee under mortgagee deed, since, being bound to pay taxes, he could not acquire a tax title, or have one acquired for his benefit, which he could hold in hostility to mortgagors. 3. MORTGAGES 143-TITLE OF MORTGAGEE IN POSSESSION UPON MORTGAGOR'S FAILURE TO REDEEM. for more than 20 years with no payment of inTitle acquired by mortgagee in possession terest and no agreement modifying the transaction is not title by adverse possession; the possession being under a conveyance of the fee, and the title being acquired by reason of mortgagor's failure to redeem within the required 20 years. 4. MORTGAGES 199(3), 489, 490, 600(2), 602, 604-ACCOUNT OF MORTGAGEE IN POSSESSION. Mortgagee in possession, upon foreclosure, or upon redemption by mortgagor, will be credited with the interest upon his mortgage and [4] We have read the record with great the amount of the taxes paid by him, and will care, and we are unable to say that the find- be charged with the rental value of the land. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 5. MORTGAGES 599(1) Mortgagee who had been in possession under his mortgage deed, without payment of interest by mortgagor, for more than 20 years, acquired an absolute title in fee; mortgagor's equity of redemption having expired. ACQUIREMENT OF | been paid. At least, none had been received by Mr. Brown for several years. According to Mr. Brown, he told Mr. Berry that something must be done, as he wanted money, and that Mr. Berry said: "I can't pay you. You go back on the place." Mr. Brown then referred to the occupant, Mr. Ridenor, and, according to Mr. Berry, there was a dispute as to whether there was any such person on the place. The result of the talk was that Berry gave Brown a letter addressed to the occupant which reads as follows: Appeal from Court of Chancery. Bill by Jacob H. Brown against William H. Berry. Decree for complainant, and defendant appeals. Affirmed. The following is the opinion of Vice Chancellor Stevenson: This memorandum will not undertake to discuss this case in all its aspects. While the evidence and arguments of counsel are fresh in my mind, I shall rest my decision of the cause in favor of the complainant upon the consideration of certain facts which are for the most part admitted, or which I think have been clearly proved. The bill is filed under "the act to compel the determination of claims to real estate in certain cases, and to quiet the title to the same" (4 Comp. St. 1910, p. 5399), commonly and somewhat misleadingly called the "act to quiet titles." The complainant conveyed the land in question, a farm of 82 acres, to the defendant William Berry, and one Eleazer Thompson, now deceased, whose heirs or devisees are codefendants with Berry. The price was $6,000, for one-half of which ($3,000) the complainant took back a purchase-money mortgage dated June 23, 1873, and payable in two years with interest at 7 per cent. The price paid seems to have been large, but Mr. Berry testified that the purchase was made with the idea that there was a deposit of ore on the land, and that he and his cospeculator sunk several shafts during two or three years after the purchase and were disappointed in their expectations. In the year 1878 the interest was in arrear. There was a small house on the land which rented for $7 or $8 a month. A portion of the land also was tillable, but a large part seems to have been mountain land. It does not appear that any substantial rent could be obtained for the land beyond the $7 or $8 per month for which the house and accompanying curtilage could be let. In 1878, the tenant of Messrs. Thompson and Berry had vacated, and a "squatter" named Ridenor had taken possession. Mr. Brown, who had received the land by devise from his father, and had lived on it in former years, desired to have his claim settled in some way, and, no doubt, was willing to take possession. He was temporarily residing or staying on the adjacent farm with his brother. An interview then took place which Mr. Brown thinks was near his brother's farm, but which Mr. Berry says was at his (Berry's) place at Westwood, Bergen county, N. J., a place quite remote from the farm. The indications are that Mr. Berry is right. It is important to know precisely what took place at this interview, and fortunately there is very little dispute between the only witnesses who can testify in regard to it. Mr. Brown had been dunning Mr. Berry for interest on his mortgage for some time, and none had "Westwood, Sept. 2, 1878. "De Witt Ridenor, Esq.-Dear Sir: I understand this day from Jacob Brown that you have taken possession and occupy the premises, formerly owned by him and now owned by Mr. Thompson and myself. I hereby order you to vacate the same immediately under penalty of the law; deliver the key to Jacob Brown. "Truly yours, Wm. Berry." Mr. Brown, who, presumably, would not be recognized by the occupant, Ridenor, as the owner of the property, delivered the letter to Ridenor, and the latter forthwith vacated the premises, and Mr. Brown and his family took possession. [1] I find nothing in the testimony of Mr. Berry which essentially modifies the transac tion between himself and Mr. Brown, on Sepin Mr. Brown's deposition. I may say that Mr. tember 2, 1878, as that transaction is described Berry's manner of testifying, and the air of superiority and control which he assumed, did not add to the credibility of his testimony. I think, however, while he added a little deceptive color, he did not testify to anything which alters the character of the transaction as a surrender of mortgaged premises by a mortgagor who was behindhand in his interest to the mortgagee. In a somewhat lofty manner Mr. Berry says that Mr. Brown came to him stating that he had "spent all his money and had to move and had no place to move in, and wanted to know whether he could move in there." Berry adds: "I said, under certain circumstances, on account of his wife who used to live with us and we thought a great deal of her-on her account he could move in the place, but he should pay the taxes, and, well, move right away." And then follows the account of the talk about Ridenor's occupation ending with the letter to Ridenor. It was argued by one of the counsel for defendants that Berry and Brown made a contract by which Brown was to take possession and the use of the property should keep down the interest. I find absolutely nothing even in Mr. Berry's testimony to suggest such a contract. It may be observed that the interest on Mr. while Brown's mortgage was $210 per annum, the rent of the house was $7 or $8 per month, say $100 a year, to which, perhaps, a small additional amount might be charged against Mr. Brown on account of such portion of the farm as he intended to cultivate. Mr. Berry may well have expressly charged upon Mr. Brown, the mortgagee whom he was suffering to take possession with the performance of his (Brown's) duty as mortgagee in possession, to pay the annual taxes which were less than the rentai value; but such an understanding or agreement (108 A.) would not affect the character of Mr. Brown's possession. I see no reason to doubt that in this case the transaction between Berry and Brown was of the usual character where the mortgage is overdue, the interest in default, and the only resident mortgagor is insolvent. The mortgagee in such cases often takes possession with the consent of the mortgagor. mortgage, seems to point to the conclusion that the mortgage now stands with the interest paid from year to year in full, and that the decree in this cause in fixing and settling "the rights of the parties in said lands" should find that the defendants were the owners of the equity of redemption and that Brown is in possession under his mortgage upon which the principal only is now due. Neither Berry nor Thompson, nor any heir or devisee of Thompson, made inquiry in regard to the status of this tax title. If they had made inquiry of Mr. Mickens, they would have learned that he was not claiming to hold the tax title in any other way than as a mortgage. From the time Brown took possession of the farm, in 1878, until the commencement of this suit, in 1915, a period of 37 years, it is proved and not contested that neither Berry nor Thompson, nor any successor to Thompson, has made the slightest effort to interfere with the mortgagee's possession or to do any act which [2] I cannot adopt the views set forth in the in any way affects the character of that pos- answer or urged in the argument in regard to session. During that period no interest has the character of Mr. Brown's possession during been paid on the mortgage by any one. Mr. the 28 years between the time when Mr. MickBrown testifies that he does not remember hav- ens radically changed the character of the outing seen Mr. Berry after the interview of 1878, standing tax title in 1887 and the commenceand that he never spoke to Mr. Thompson aft- ment of this suit in 1915. We have seen that er that time. Mr. Brown remained in personal Brown entered into possession in 1878 as mortpossession and occupation of the farm with gagee. He was bound to pay the taxes. He his family as a resident from 1878 until the could not acquire a tax title or have one acdeath of his wife, in 1908, a period of 30 years, quired for his benefit which he could hold in hosand since that time he has rented the place to tility to the mortgagors. I do not consider that tenants from whom he has collected the rent. it is necessary to enter upon an elaborate disIn January, 1885, the farm was sold for tax- cussion of the status of the parties concerned es and bought in by the township committee of during the brief interval in which the township Pompton township for a term of 30 years. The held this term of thirty years. The defendants complainant, Brown, testifies that his poverty still held the equity of redemption in the fee, caused his default in the payment of taxes, and and Mr. Brown still held his mortgage on the the circumstances indicate that he did not suf- fee, and Mr. Brown remained in possession, havfer this default in order to injure the owners ing originally taken possession as mortgagee. of the equity of redemption or any one else. Many interesting questions relating to this mortIt appears that after this sale was made the gage arise out of the default of Mr. Brown with township held this term for about 2 years but respect to his duty to pay taxes, but I do not made no effort to dispossess Mr. Brown. In deem it necessary to discuss them. As between February, 1887, Brown paid the township $25, himself and Berry and Thompson he was still which the township clerk says was entered on in possession during the period when this tax the township books as rent for the farm, and title was outstanding as mortgagee and not othMr. Brown seems to assent to that idea. erwise, while as between himself and the township he might have been regarded as a tenant. On April 29, 1887, the township committee transferred their certificate of sale to George W. Mickens, Mr. Brown's brother-in-law. Mr. Mickens testified that he bought the term merely to save the home of his sister and her husband; that he made no effort to collect any rent; and that the understanding between him self and his brother-in-law was that he would hold the assigned term merely as security for the repayment to him of the amount which he paid the township committee. Mr. Brown and Mr. Mickens testify, and there is no other testimony on the subject, that in the course of a long period of years Brown paid back to Mickens the exact amount which Mickens had paid the township committee with interest, and that all claims of Mr. Mickens under the assignment of the term thereupon were discharged. When Mr. Berry heard of the sale for taxes, he consulted counsel, he says, and learned that he could do nothing, and thereupon apparently conceived the idea that he could await the expiration of the term to take possession of the land as owner, while the mortgage would be met with the absolute bar of the statute of limitations. There is some conflict in regard to this matter between counsel for Berry and counsel for the Thompson heirs. Counsel for the Thompson heirs, in arguing that Berry and Brown, in 1878, agreed that the occupation by Brown should discharge the interest on the However this may be, I think that the correct legal conclusion is that, when Mr. Mickens took an assignment of the tax title as a mere security for repayment to him of the amount of the tax lien, there can be no doubt that Mr. Brown's possession became again, if it had not been continuously from the start, the possession of a mortgagee under his mortgage. He had no other title. He was not Mr. Mickens' tenant. When he had repaid the taxes to Mr. Mickens, he had only performed the duty which he owed to the mortgagors, and the situation was precisely the same as it would have been if Mr. Brown had made no default and there had been no tax title. [3] It is unnecessary to cite the authorities which hold that where a mortgagee takes possession under his mortgage, and holds possession for 20 years with no payment of interest and no agreement modifying the transaction, the equity of redemption is extinguished. Sometimes this title which the mortgagee in possession acquires has been confused with a title by adverse possession. It is not the adverse possession which ripens into an absolute title in the case of a mortgagee. The mortgagee is in possession under a conveyance of the fee. Anciently, the mortgagor lost all title in case the condition was not performed by him within the time stated; i. e., in case the money was not paid according to the condition of the mortgage. Our law now allows the mortgagor to redeem within 20 years and limits him to that period. On the other hand, our modern law limits the right of the mortgagee to foreclose for the same period of 20 years. At any time during a period of 20 years, either from 1878 or from 1887, when Mr. Mickens bought the tax title I have not considered it important to determine which would be the correct datethe defendants could have filed a bill to redeem, and it is hardly necessary to point out that Mr. Brown could not have set up the tax title in any way against them. [4, 5] In rendering his account as mortgagee in possession, Mr. Brown would have been credited with the interest upon his mortgage and the amount of the taxes paid by him, and would have been charged with the rental value of the farm. On the other hand, Mr. Brown might have filed his bill to foreclose, and he would have been obliged to render precisely the same account. After the expiration of 20 years from the correct date, whichever of the two beforementioned might be taken, the defendants lost their right to redeem, and the complainant lost his right to foreclose, and the complainant, in my judgment, plainly is in possession under his mortgage deed, and under that deed holds an absolute title in fee; the equity of redemption formerly in the defendants having expired. I have not referred to the improvements which Mr. Brown has made, the extension of the residence, etc., because I do not understand that there is any evidence going to show that Mr. Berry or any of the defendants had notice of such improvements. A decree will be advised for the complainant according to section 6 of the statute. 4 Comp. Stat. p. 5402, § 6. such share under a contract with the deceasedto show that such contract was founded on a valuable consideration. 3. CORPORATIONS 3. CORPORATIONS 171 - ELECTION AS DI171- ELECTION AS DI RECTOR PROOF OF OWNERSHIP OF STOCK. The fact that under Corporation Act, § 39, no person can be elected a director of a corporation unless he be at the time of his election a bona fide holder of some stock is not proof that one elected a director was the owner of stock. 4. CORPORATIONS 121(5)- EVIDENCE IN SUFFICIENT ΤΟ ESTABLISH CONTRACT то TRANSFER STOCK. Alleged agreement by testator to transfer a share of corporate stock held not established by the evidence. 5. SPECIFIC PERFORMANCE 85-PROMISE TO MAKE GIFT. Equity will not direct specific performance of a promise to make a gift or to perfect an imperfect gift. 6. CORPORATIONS 116-CONSIDERATION FOR TRANSFER OF SHARE OF STOCK. A consideration for an alleged agreement by a stockholder and by vice president of a corporation to transfer to claimant a share of corporate stock is not established by claimant's uncommunicated resolution to leave the employment of the corporation unless given some stock therein, where claimant remained at an increase in salary and acted as a stockholder without legal title to stock. Appeal from Court of Chancery. Action by the Fidelity Trust Company, as executor of the estate of William Bennett, Hudson & Joelson, of Paterson, for appel-deceased, against the Newark Milk & Cream lant. Howe & Davis, of Orange, for appellee. PER CURIAM. The decree appealed from will be affirmed for the reasons stated in the opinion filed in the court below by Vice Chancellor Stevenson. (89 N. J. Eq. 224) FIDELITY TRUST CO. v. NEWARK MILK & CREAM CO. et al. (No. 32.) Appeal of RUTZ. Company and another. Decree for plaintiff, and defendants appeal. Affirmed. The following is the opinion of Vice Chancellor Stevens: This is a suit to compel the defendant company to transfer on its books a share of its stock to complainant. The defendant Rutz asserts title to the same share and asks similar relief. The complainant is the executor of William H. Bennett, who died in November, 1913. Bennett had been for many years general man (Court of Errors and Appeals of New Jersey. ager of the defendant the Newark Milk and May 3, 1918.) 1. CORPORATIONS 129-TRANSFER OF STOCK ON BOOKS NOT NECESSARY BETWEEN PARTIES. As between the transferrer and the transferee of a corporate stock certificate assigned by indorsement on the back thereof, the title was completely vested in the transferee without a transfer on the corporation's books. 2. CORPORATIONS 133-COMPELLING TRANSFER OF SHARE OF STOCK. Where deceased was unquestionably the legal owner of a share of corporate stock until his death, his executor had the right to insist that the corporation issue a certificate therefor, but the burden rests upon one claiming Cream Company. In 1904 he was the owner of 125 shares of its stock. This was half of its total issue of 250 shares. The defendant Stanley A. Rutz had, in 1899, become its bookkeeper. In 1904 he says that he wanted to resign from On the contrary, the company. He did not. he was elected a director and vice president, and served as assistant manager at an increased compensation. He continued in these positions until Mr. Bennett's death, in 1913, when he became secretary and treasurer. In his answer and counterclaim he says that prior to the month of May, 1904, he had rendered service to Bennett, in connection with Bennett's personal affairs, for which he had received no compensation; that in May, 1904, he informed Bennett that unless he could then acquire at least 1 (108 A.) share of the capital stock of the company as his, of 125 shares long prior to 1904. A certificate own property and become an officer thereof, for one of these shares was made out in the he would sever his connection with it; that name of Bennett's son Robert, who at the thereupon Bennett stated to him that it was time it was issued assigned it, by formal words his desire that he (Rutz) should remain in the indorsed on the back of the certificate, to his company's employ, and that if he would do so, father, who thereafter and up to the time of "and in consideration of the service thereto his death held it unassigned, and received and fore rendered by him to Bennett in his per- appropriated the dividends. Robert testifies sonal matters, he would transfer to him 1 that about the year 1906, when he saw Rutz share of stock from his own holdings, which sign his name as vice president, he asked him share would thereupon become and thereafter be if he was vice president and a stockholder, and his own property; that if this was done, he he said "No;" that he was only a dummy (Bennett) desired to retain the certificate for stockholder. This conversation Rutz denies. such share and to receive and retain the dividends thereon during his lifetime, but that after Bennett's death, he (Rutz) should have the certificate and be entitled to have it transferred to him of record." This alleged agreement was not reduced to writing. As the controversy is between an executor in his representative character on the one side and Rutz on the other, the latter was unable to give evidence of what occurred, and the alleged agreement has not been proved, at least directly. The question is, Has it been proved circumstantially? The proof relied upon is the following: In 1904, and the years following, Rutz, at the stockholders' annual meetings, voted as the owner of 1 share. He was elected and re-elected a director and vice president at meetings which Bennett as secretary recorded. In a certificate of change of name filed with the secretary of state in April, 1912, Bennett is represented as the owner of 124 shares, and Rutz as the owner of one. In a report filed with the secretary of state in June, 1913, Rutz is stated to be a director and vice president. In the year 1913, the defendant company employed the New Jersey Registration & Trust Company to act as its registering agent. When the stock certificate book was being turned over, it appeared that stub No. 9, corresponding to the stock certificate in controversy, had not been filled in and the registration company's agent called Mr. Bennett's attention to the omission. After considerable questioning and cross-questioning on the subject, the agent testified as follows: "Q. Did you ask him who was the record owner and he answered that Stanley A. Rutz was the owner and the number of shares is one. A. That is right." Then the agent filled in the stub with the name "Stanley A. Rutz." This was nine years after the alleged agreement was made, and in the same year that Bennett died. This evidence shows that Bennett permitted Rutz to hold himself out to the world as the owner of a share, and that Bennett admitted on one occasion that Rutz was the owner of the share in question. It does not show how Rutz became owner; it does not show the terms of the agreement under which he became owner, and it does not show the consideration, if any. On the facts proved we might conjecture either that Rutz was a "dummy" director, or that he had the promise of a share by way of gift, or that there was an agreement to give him a share based on valuable consideration. It will be noted that the proof fails to show that there was any actual transfer of any share, or that Rutz ever received any dividend, although the company was paying dividends. [1, 2] The evidence on the part of the complainant is as follows: Bennett was the owner It is well settled that as between the transferrer (Robert) and the transferee (William) title to the stock certificate was completely vested without transfer on the books. Matthews v. Hoagland, 48 N. J. Eq. 486, 21 Atl. 1054; Farrell v. Passaic Water Co., 82 N. J. Eq. 97, 88 Atl. 627. The burden of proof is on Rutz. Bennett was, unquestionably, up to his death the legal owner. As between the complainant executor and the company, the former has the right to insist that a certificate be issued to it. Farrell v. Passaic Water Co., supra. Being thus the owner, it is for Rutz to show that Bennett made a contract founded on valuable consideration, to transfer the share to him. Uncertainty in the contract is fatal to a claim for specific performance. Myers v. Metzger, 63 N. J. Eq. 780, 52 Atl. 274; Potter v. Hollister, 45 N. J. Eq. 508, 18 Atl. 204; Id., 46 N. J. Eq. 609, 22 Atl. 56. [3, 4] The question, therefore, is: Has a contract to transfer, certain in all its parts, been shown? It seems to me that it has not. The court is asked to infer such a contract from three circumstances: First. That prior to 1904 Rutz had collected rents for Bennett personally. There is nothing in the evidence to connect the obligation, if any, to pay for the collection of these rents with any agreement to transfer. Second. That Bennett would not have permitted Rutz to vote as a stockholder, or act as a director, unless he really was a stockholder. But Rutz was not, on his own proofs, entitled to vote as a stockholder, although he did vote. His position was that of a man to whom stock had been promised but not transferred. A stockholder is not entitled to vote unless he be an original subscriber, or unless he be registered on the company's books. Johnston v. Jones, 23 N. J. Eq. 216; In re Election of Directors, 61 N. J. Law, 422, 39 Atl. 1024; Chapman v. Bates, 61 N. J. Eq. 667, 48 Atl. 638, 88 Am. St. Rep. 459. And no person can be elected a director unless he be at the time of his election a bona fide holder of some stock. Section 39 Corporation Act (2 Comp. St. 1910, p. 1624). Are we at liberty to infer a contract, complete in all its parts, from an irregular act? Third. That Bennett admitted to Picking, the registrar, that Rutz was the record owner of the share in controversy. He was, admittedly, not the record owner. But aside from this the admission does not show in what way he became so. His claim is consistent with any one of the three suppositions that I have mentioned. [5] If either of the first two were made, the contract could not be enforced; for, of course, there would be none to enforce if, as suggested by Robert Bennett's testimony, Rutz were only a dummy director; and nothing is better settled than that equity will not direct the spe |