CORPORATIONS-1. Documents forming part of a contract must
be construed by giving the words used therein their ordinary
meaning. MELLON v. MISSISSIPPI WIRE GLASS Co........
2. Where the stockholders, through the corporation, whose
property defendant purchased under an agreement to issue pre-
ferred stock in payment therefor to the stockholders of the
selling corporation, accepted the certificates of preferred stock
tendered to them by defendant without objection thereto or to
the form of defendant's charter amendment authorizing the issu-
ance of such preferred stock, they thereby ratified any variance
between the terms of the contract by which the corporate prop-
erty was sold to defendant, and defendant's amended certificate
of incorporation and the preferred certificates, issued pursuant
thereto. Id. ..
A corporation. of which complainants were stockholders,
sold its property to defendant corporation, in part consideration
of the issuance to the selling corporation, of a certain amount
of preferred stock; the contract providing that such stock should
be entitled to dividends at the rate of five per cent. per annum,
and that the certificates should provide that no preferential
or co-ordinate lien should be created without the consent of the
holders of the majority of such preferred stock, and that it
should be redeemable on any dividend day at a certain price
and accrued dividends. Defendant amended its certificate of
incorporation in order to issue such preferred stock and the
amended certificate provided that the holders of such stock
should be entitled to five per cent. dividends before any divi-
dend should be paid on the common stock. and that the re-
mainder of the net earnings should be declared as dividends on
the common stock, and, upon dissolution of defendant corpora-
tion, the preferred stockholders, should receive from its assets,
the par value of the preferred stock. the remainder of the assets
to be paid to the common stockholders. The certificates of
preferred stock issued entitled the holders to receive from the
net profits, dividends at the rate of five per cent. per annum,
cumulative, and payable before any dividends on the common
stock were paid, and if in any year such dividends were not
paid, the deficiency should be payable before dividends were
paid upon the other stock, the remaining net earnings to be
available to pay dividends upon the common stock, and that
upon dissolution the preferred stockholders should receive from
the corporate assets the par value of the shares and unpaid divi-
dends before anything should be paid to the common stock-
holders.-Held, that the contract for the sale of the corporate
property to defendant. defendant's amended certificate of in-
corporation, and the certificates of preferred stock issued, if
construed together as a contract, did not require defendant to
set aside a certain amount as a sinking fund out of which to
pay complainants as preferred stockholders. the par value of
their stock upon dissolution. Id......
498
Preferred stock certificates provided that upon liquidation
or dissolution of the corporation, the preferred stockholders
should be entitled to be paid in full out of the assets of the
corporation, the par value of the shares and the unpaid divi-
dends accrued thereon, before anything should be paid to the
holders of the common stock.-Held, that the corporation would
not be compelled, at the suit of the preferred stockholders. to
establish a sinking fund out of which to pay the par value of
the preferred stock on dissolution of the corporation, on the
ground that when the patents expired, in which nearly the whole
capital stock of the corporation was invested, there would be no
property out of which to pay the par value of the preferred
stock; there being no legal obligation upon the corporation to
do so in absence of contract. Id......
A corporation contracting for the construction of roads
in a county assigned the moneys to become due under the con-
Seven months later it went into the hands of a receiver.
The corporation had since its organization been in financial
straits and had been constantly aided by the assignee. At the
time of the assignment, the corporation was in arrears for taxes
and was unable to pay its insurance and was in default for
interest on mortgages and had only nominal cash balances in a
few banks. It could not pay its current bills, and its credit
with the banks was exhausted. About a year before the
assignment. it had conveyed all its property to the assignee as
security for a past-due indebtedness and to secure future ad-
vances.-Held, that the corporation was, to the knowledge of
the assignee, insolvent at the time of the assignment, so that it
was void as against creditors. COPE v. C. B. WALTON Co...... 513
See MORTGAGES, STOCKHOLDERS.
COUNSEL FEES-See WILLS. 5.
COVENANT-1. The covenant of seizin is broken. if at all, as soon
as made. KUNTZMAN v. SMITH....
The right of action for breach of covenant of seizin is in
the grantee, and not in one claiming under him. Id........... 30
The covenant of seizin is not broken by the existence of
easements or encumbrances not striking at the technical seizin
of the purchaser, and a mortgage or an expectant right of dower
does not affect the covenant.
A covenant of warranty runs with the land. Id......... 30
A breach of covenant of warranty does not arise unless
there has been eviction by title paramount or by action brought.
Id.
CREDITOR'S BILL-1. A judgment creditor, who seeks to reach
an equitable estate of the judgment debtor in land, must plead
and prove that he has exhausted his remedies at law against
the debtor, and that he cannot collect his judgment at law.
W. S. HUSELTON & Co. v. DURIE.
A judgment creditor, seeking to reach an equitable estate
of the judgment debtor, does not show that he has exhausted his
remedies at law by merely showing that the debtor is insolvent.
Id.
3. A judgment creditor, entitled to reach real estate to which
the judgment creditor was entitled under a will, and which he
has caused the executor, who had the power to convey, to convey
to him and his wife. is entitled to an equitable lien on the prop-
erty of the debtor standing in the name of the wife, and to have
that lien foreclosed for his benefit. Id....
In a contest between judgment creditors for surplus moneys
in a foreclosure suit arising from the sale of the judgment
debtor's land conveyed by him to defraud his creditors. the sur-
plus will be awarded to that judgment creditor to be applied
on his judgment, so far as it will extend, who alone, not only
recovered judgment and made a levy on the land, but also filed
a bill in this court in aid of his judgment to have the debtor's
conveyance set aside as fraudulent and void as to such creditor.
and prosecuted such suit to a decree in his favor, notwithstand-
ing the other judgment creditors have prior judgments and prior
levies on the same land. DEY v. ALLEN...
A creditor's suit in this court in aid of a judgment at
law is entirely self-serving, and one for the benefit of the com-
plainant alone. Id.....
DAMAGES-1. Where a river was polluted by the sewers of a city
and by several factories located along its banks above defend-
ant's land. each was liable for the results of its own pollution
only. In the case of several independent tort-feasors. each is
responsible only for his own act. NEWARK v. CHESTNUT HILL
LAND CO.
This court will not restrain the prosecution of an action
at law where the defence can as well be made in the court in
which the action is pending as in a court of equity. O'DON-
NELL v. MCCANN.....
DECEDENTS, DEBTS OF-1. The recovery of a legacy by one en-
titled thereto will not defeat the claim of a creditor even though
he has been barred of his action against the executor, for, if
DECEDENTS, DEBTS OF--Continued.
he has been so barred, he may recover his debt out of the
legacy and from the legatee. O'DONNELL v. MCCANN...
Legatees succeed to the estate of the testator as benefi-
ciaries and objects of his bounty and have no rights or equities
whatever as against creditors. Id......
The rule to limit creditors and the decree barring creditors,
provided for by the Orphans Court act, operate only to protect
the executor from molestation by belated claims of creditors,
to the end that the estate of a decedent may be speedily settled;
and the provisions mentioned do not operate as a statute of
limitation against the claims of creditors. Id..
The prohibition contained in section 76 of the Orphans
Court act which prevents an executor or administrator cum
testamento annexo, who has neglected to enter a rule to limit
creditors and to proceed thereon according to law, that is, take
a decree to bar creditors and settle the estate. from pleading
want of assets in abatement in a suit for a legacy, unless a suit
brought within a year from the grant of probate or administra-
tion be pending on a claim against the estate, will not be per-
mitted to work a recovery of a legacy and a debt out of such
personal representative beyond assets available for their pay-
![[blocks in formation]](https://books.google.com.mx/books/content?id=4UAaAAAAYAAJ&output=html_text&pg=PA617&img=1&zoom=3&hl=en&q=reason&cds=1&sig=ACfU3U3eI6Uac0WzpiXXuSzdSX0eJD2nzA&edge=0&edge=stretch&ci=171,805,124,19)
Although an executor or administrator cum testamento
annexo is unable to plead want of assets in abatement in a suit
for the recovery of a legacy when he has not taken a rule to
limit creditors and proceeded thereon according to law, such
neglect is not visited with the penalty of payment of the legacy
and of the debt too, when there are not sufficient assets of the
estate to pay and discharge both. Id....
By refraining from exercising his right of retainer an
executor who is an alleged creditor of his decedent's estate does
not thereby mislead a legatee in any way whereby an equitable
estoppel is raised against such creditor in his lifetime or his per-
sonal representative after his decease. Id......
Chancery will not distribute to legatees a fund in the hands
of an executor or administrator. in the face of an adverse claim
against the estate which would consume the fund, without
affording the claimant an opportunity of being heard with
respect to the disposition of the fund. Id......
- Quære. Does not a suit in chancery for the recovery of a
legacy draw to it the claims of creditors of the deceased so that
the court may administer the estate and make final disposition
of the assets and will not the court, to that end. enjoin a suit
at law brought by a creditor against the personal representative
of a decedent after bill filed in equity? Id...
DECEDENTS, DEBTS OF—Continued.
- The doctrine announced by the court of errors and appeals
in Haston v. Castner, 31 N. J. Eq. (4 Stew.) 607, must be
accepted as the established law of this state. SIMPSON V.
BOCKIUS
10. A decedent's creditor is not obliged to await proceedings
of an administrator or executor to sell land to pay the decedent's
debts by order of the orphans court, nor is he obliged to go into
that court to effect such sale. He has a standing in the court
of chancery and can file his bill in that court and secure the
enforcement of his statutory lien. Id.......
Whether the administration of the decedent's estate is in
a foreign state, or in this state, does not affect the right of a
creditor whose debt is charged upon land situate in New Jersey,
of which the debtor died seized, to proceed in this court. Id... 339
Neither does the complainant's right to file a bill depend
upon the question of the insolvency of the estate of the decedent,
the theory being, not that the complainant has exhausted his
remedy at law in the probate court. but that he has a statutory
lien which he has a right to enforce in the court of chancery.
a court which has general jurisdiction for the enforcement of
liens. Id. .....
A judgment against a residuary devisee, as such, for a
debt of testator, establishes the debt as a just one of the testator.
MORRIS . DORSEY...
The orphans court, authorized by statute to order a sale
of lands of a decedent for the payment of his debts when the
personalty is insufficient for that purpose, may not order a sale
of the real estate of a testator to pay the debts and funeral
expenses of his wife. notwithstanding his will, devising his
estate to his wife for life, and at her death after the payment
of the wife's debts and funeral expenses to a daughter; the
word "debts" in the statute referring to the debts of decedent
alone. Id.
Where no power of sale of real estate is vested in the
executor by the will of testator, he can only acquire that power
from the orphans court in a case where the statute authorizes
the court to confer the power. Id....
DECREES 1. A court of chancery has jurisdictional power, even
after enrollment, to open a regular decree obtained by default, to
afford defendant an opportunity to make a defence on the merits,
where such defendant has been deprived of the defence either by
mistake or accident, or by the neglect of his counsel. BOYER
r. BOYER
|