v. Railroad Co., 28 N. J. Eq. 277, 285, on appeal, 29 N. J. Eq. 311, 336.

Under the law, as above stated, the first question to be decided is, were the debts of this corporation fastened on its property when the bill in this case was filed? The entire assets of the corporation, including the chattels covered by the defendant's mortgage, have been converted into money. The amount realized, from all sources, is about $3,700. Preferred debts to the amount of $927, and unsecured debts or debts without a preference to the amount of $7,530, have been proved before the receiver. These figures make it plain that the unsecured creditors will receive less than 35 cents on the dollar of their debts. The receiver of an insolvent corporation becomes, as soon as he qualifies, invested, by force of the statute, with full power to demand, sue for, and take into his possession all of the property, of every description, belonging to the corporation, and to convert the same into money. The statute then ordains that all moneys which he shall receive by virtue of the authority invested in him shall be disposed of by him, under the order of the court, among the creditors of the corporation. Revision, p. 189. § 72. And, in prescribing the rule which shall regulate the distribution of the moneys, the statute says that, in payment of the creditors and distribution of the funds of any insolvent corporation, the creditors shall be paid proportionally to the amount of their respective debts, excepting mortgage and judgment creditors, when the judgment has not been by confession for the purpose of preferring creditors. Revision, p. 191, § 80. The effect of these two provisions is, as it seems to me, to fasten the debts of a corporation on its property the moment it is adjudged to be insolvent, and a receiver is appointed to wind up its affairs. From that time forth its property is, by law, appropriated exclusively and irrevocably to the payment of its debts. Power is conferred on its receiver to take possession of all of its property, and to convert it into money, to the end that the money thus obtained may be distributed among its creditors. No other application or disposition can be made of the money realized from its property. It must be paid to its creditors, and, in distributing it among unsecured creditors, the statutory direction is that they must be paid equally in proportion to their respective debts. By an enactment, expressed in this form, the debts of an insolvent corporation are, in my judgment, just as plainly and effectually fastened on its property as they would have been had the statute said, in direct terms, that when a corporation is adjudged to be insolvent its property shall, at once, become liable for the payment of its debts. A legislative declaration, in the form just stated, has been held to be sufficient to fasten the debt of a creditor at large on the lands of his deceased debtor. The statute making the lands of a decedent liable for the payment of his debts, declares, in sub. stance, that they shall be and remain so liable for one year after the decedent's death, and after that so long as the deredeut's heir or devisee shall continue seised

thereof. The court of errors and appeals have decided that, by force of this statute, the debts of a decedent are fastened on his lands, and that a creditor at large, after he has proved his debt, may, in virtue of the lien created by the statute, maintain an action to set aside a conveyance made in fraud of his rights. The opinion of the court was pronounced by Chief Justice BEASLEY, who, on the point now under consideration, said that it would be observed that the statute made debts a burden on the lands of the decedent of which "he shall die seised. Consequently, when lands are attempted to be conveyed in fraud of creditors, as the statute against frauds and perjuries make such conveyance absolutely void, such convey ance cannot disturb the seisin of the decedent in such lands, so far as relates to the creditors so injured. With regard to his creditors, the debtor, in contemplation of law, dies seised of the lands, notwithstanding such fraudulent alienation; and, in my judgment, therefore, a creditor, under such circumstances, has his claim fastened upon the land of his debtor, and such lien will give him, within the rule established by the decisions, the footing requisite to maintain himself in a court of equity." Haston v. Castner, 31 N. J. Eq. 697, 700.

Following the principles thus established, this court held, in Currie v. Knight, 34 N. J. Eq. 485, that the statute regulating the distribution of the estate of debtors who die insolvent, and which declares that the estate, real and personal, of a testator or intestate, in case the same shall be insufficient to pay all his debts, shall, after certain preferred debts have been paid, be distributed among his creditors in proportion to the sums that shall be due to them respectively, created a lien in favor of creditors at large; and that such a creditor might, after having proved his debt, maintain a suit, in virtue of the lien thus created, to avoid a chattel mortgage made by his debtor, and which, in consequence of the failure of the mortgagee to file it, was, by the statute, void as against such creditor. The train of reasoning by which this conclusion was reached was this: that, if a statutory declaration that the property of a debtor shall be liable for the payment of his debts creates a lien, the same resuit must follow where the direction is that his property shall, in a certain condition of affairs, be distributed exclusively to his creditors. In both instances the law takes possession of the debtor's property for the benefit of his creditors, in order that his property may be converted into money for the payment of his debts. After the property of a debtor passes into the custody of the law pursuant to either statute, the right of his creditors to have his property converted into money, and the money applied in discharge of his debts, is, in all essential respects, precisely the same as that of a judgment creditor after levy under execution. In both cases the law grasps the property in order that it may be applied, by legal methods, to the payment of its owner's debts. When it is seized by execution, the proceeds of its sale can only be applied in discharge of a

particular debt or debts; but when it is seized for the purposes of administration, its proceeds must be distributed to all creditors standing on the same plane, who make proof of their debts. The lien, however, created by the seizure, is just as perfect and effectual in the one case as it is in the other.

My conclusion, therefore, is that, both according to the true construction of the provisions of the statute now under consideration, as well as according to the construction which has been given to kindred statutes, it must be held that the debts of creditors at large of an insolvent corporation are fastened on the property of the corporation by the adjudication of insolvency and the appointment of a receiver. Hence it follows, necessarily, that a creditor who has proved his debt before the receiver may maintain a suit to set aside a chattel mortgage, which is, as against him, by force of the statute, absolutely void. But the person who attacks the defendants' mortgage is not a creditor of the mortgagor, but its receiver. He, however, represents its creditors. He is made the representative of its creditors by express provision of the statute. The seventy-seventh section declares that the person who shall be appointed the receiver of an insolvent corporation shall be deemed and taken to be the receiver of its creditors and stockholders; and the seventy-third section requires that the person who is appointed the receiver of an insolvent corporation shall, before he enters on the discharge of his duties, take an oath that he will faithfully, honestly, and impartially execute the powers and trusts reposed in him as the receiver of its creditors and stockholders. In Trust Co. v. Miller, 33 N. J. Eq. 155, 158, it was said, in substance, that the receiver of an insolvent corporation was an officer created by law for the protection of the rights of the creditors of the corporation, and, to accomplish the purposes of his creation, it was indispensably necessary that he should be clothed with their attributes and equities. By the thirteenth section of the act regulating assignments made by debtors for the benefit of their creditors, it is enacted that any assignee to whom a debtor shall assign his estate shall have as full power to dispose of such estate as the debtor had at the time he made the assignment; and that such assignee shall also have power to sue for and recover, in his own name, everything belonging or appertaining to the estate of his assignor. Revision, 39. The latter clause of this section, in which a right to sue is given to the assignee, the court of errors and appeals have decided may be legitimately construed, in view of the purposes of the act, to embrace all property of the assignor which may be made available for the payment of his debts. Immediately following the statement respecting the construction which this clause will bear, the court, speaking by Mr. Justice DEPUE, say: "Considering that the assignment creates a trust for the benefit of all the creditors of the assignor, and that the legislative purpose was to secure an equal and just

division of the estate of the debtor among his creditors, a construction less comprehensive will defeat the legislative purpose. In virtue of the trust so created, the assignee becomes the representative of and actor for the creditors, and his powers should be so construed as to enable him to carry into full effect the purpose which the statute designed.' Pillsbury v. Kingon, 33 N. J. Eq. 287, 301. The court accordingly held that an assignee, under the statute, has a right to maintain an action, as the representative of the creditors of his assignor, to set aside a deed which his assignor, prior to the assignment, had made in fraud of his creditors. As I understand the opinion of the court, the foundation of its judg ment is the principle laid down by Baron PARKE in Doe v. Ball, 11 Mees. & W. 531, 533, in these words: "A deed which is roid as against creditors is void also against those who represent creditors."

Adopting this principle as the rule of decision in this case, there is but one thing the court can do, and that is to pronounce the judgment against the defendants' mortgage which the statute prescribes. A mortgage in the faulty condition in which the defendants' mortgage was when it was recorded, is, according to the express words of the statute, absolutely void as against the creditors of the mortgagor; and as, by force of the principle just stated, such an instrument is equally invalid as against the representative of creditors, it would seem to be undeniable that the same judgment precisely must be pronounced on such an instrument in a suit by a receiver that the court would be bound to pronounce in a suit by creditors in their own names. The receiver in such a case stands in the rights of the creditors of the mortgagor, and he is, consequently, entitled, as their representative, to the same relief that would be given to them in a suit instituted by themselves in their own names. The statute of fraud makes a deed executed in fraud of creditors absolutely void as against the creditors of the grantor; and the statute under consideration makes a chattel mortgage executed in disregard of its requirements absolutely void as against the creditors of the mortgagor. To invalidate the first, fraud must be shown; and to invalidate the second, it must appear that the statutory requirements have not been observed in its execution; but when the first has been shown to be fraudulent, and when it appears that the second was not executed in compliance with the requirements of the statute, then both are placed, by positive law, in precisely the same category; both are then without the least legal force, as against creditors, and must be so treated by the courts. To invalidate a chattel mortgage executed in disregard of the requirements of the statute, the person assailing its validity is not required to show, in addition to such fact, that it was executed to defraud creditors. statute requires nothing of that kind, but, on the contrary, expressly declares that, if the statutory requirements have not been observed in its execution, it shall for that reason, and that reason alone, be treated

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as void as against creditors. which renders it void as against creditors is not fraud, but the failure of the mortgagee to perforin a duty which the statute imposes upon him.

This view, it must be admitted, does not stand in strict accord with that expressed in Shaw v. Glen, 37 N. J. Eq. 32. It was there held that, while an assignee under our statute might maintain an action to recover property which his assignor had conveyed away in fraud of his creditors, yet he could not successfully defend a suit brought to enforce a chattel mortgage, which, though untainted by fraud, was nevertheless, by force of the statute, void as against the creditors of his assignor. This decision was placed on this ground: that, in cases unaffected by fraud, the assignee takes the estate assigned subject to such equities as existed against it in the hands of his assignor; in other words, that as to honest liens, although they may be void as against creditors, the assignee takes the estate assigned in the same plight and condition in which his assignor held it. But I am unable to reconcile the basis of decision thus adopted with the leading principle established by the judgment of the court of errors and appeals in Pillsbury v. Kingon, which is that, in virtue of the trust created by an assignment pursuant to the statute, the assignee becomes the representative of the creditors of his assignor, and stands invested with their rights, and may, consequently, avoid, by suit or defense, any instrument which they themselves might avoid. The right of the complainant to maintain this action as receiver, on the authority of Pillsbury v. Kingon, would seem to be entirely clear. And this view would seem to have been approved in Hopper v. Lovejoy, 47 N. J. Eq. 573, 21 Atl. Rep. 298, a case involving the same questions that are involved in this. That case was heard by Advisory Master STEVENS, who, in deciding it, held that the receiver of an insolvent corporation had a right, as the representative of its creditors, to maintain an action to set aside a chattel mortgage made by the corporation, and which, though honest, was, by force of the statute, void as against creditors. He, in addition, held that the chattel mortgage on trial in that case was void, for the reason that it had not been executed in such manner as to entitle it to be recorded. The mortgage had been acknowledged by the president of the corporation, but its execution was not otherwise proved or authenticated. Such an authentication of the execution of a deed by a corporation the advisory master held was insufficient to entitle it to be recorded, so that its record would operate as notice to creditors and others. On appeal, the court above dissented from this latter view, and held that a deed by a corporation may be so acknowledged as to entitle it to be recorded, and thus make its record notice of its existence. In all other respects, as I understand the opinion of Mr. Justice DIXON, the appellate court concurred in the views expressed by the advisory master. The case, in my judgment, is a direct authority in favor |

of the complainant on both of the points involved in this case. A decree will be made declaring the defendants' mortgage void.

DEERING V. BISHOP BAYLEY BLDG. & LOAN Ass'n No. 2.

(Court of Chancery of New Jersey. July 7, 1892.) BUILDING AND LOAN ASSOCIATIONS-RIGHTS OF HOLDERS OF MATURED STOCK.

Where the constitution of a building and loan association provides that, "when the stock of any series shall have attained the value of two hundred dollars each, one half of the receipts shall be appropriated by the board exclusively to the liquidation of the same. Priority in payment shall be given to those willing to allow the highest premium, and no interest will be allowed on such money due from the time value is ascer tained until payment is made," the holders of stock in the first series are entitled to be fully paid out of such receipts without being subject to competition in bidding with the holders of stock in any subsequent series which may have matured, and the company will be restrained from accepting bids offered by any members of any subsequent series.

(Syllabus by the Court.)

Bill by Thomas Deering against the Bishop Bayley Building & Loan Association No. 2 to enjoin it from offering its funds for sale to the members of the second series until the members of the first series are paid in full.

John W. Wartman, for complainant. Thos. P Curley and Saml. H. Grey, for de fendant.

BIRD, V. C. The complainant in this case became a member of the Bishop Bay. ley Building & Loan Association No. 2 in the year 1880. As such he was the owner of five shares of stock. According to the scheme adopted, 10 years were allowed for this stock to mature, and, when so matured, each share was expected to be worth $200. Part of the plan was to issue different and successive series of stock year after year. There was a provision in the constitution for the payment of stock in these words: "When the stock of any series shall have attained the value of two hundred dollars each, one half of the receipts shall be appropriated by the board exclusively to the liquidation of the same. Priority in payment shall be given to those willing to allow the highest premium, and no interest will be allowed on such money due from the time value is ascertained until payment is made." In November, 1891, the second series matured, each share being of the value of $200. The board of directors undertook to apply the one half of the receipts to the liquidation of the stock of both the first and second series by permitting those who held stock in either series to bid, offering such rate per cent. as they were willing to give for the amount of their stock. In December last the rate per cent. for the premium was 6 per cent., and in April last it had so advanced as to command 9 per cent. The complainant says that the money in hand offered in this manner for the liquidation of both the first and second series, rather than of the first series alone, worked a great hardship upon the members of the

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first series, in that it greatly increased competition. It is alleged that this is in contravention of the constitution, and consequently a violation of the contract entered into between the association and its members. It is said that, according to the contract and constitution, the members of the first series are entitled to priority in bidding until the amount due the members of the first series is entirely liquidated. The complainant asks that the corporation may be restrained from offering its funds for sale to the members of the second series until the members of the first series are paid in full. The language of the constitution is plain; its meaning is not doubtful. In discharging its obligations to the owners of the different series, the company expressly con. tracted to devote one half of its receipts to the liquidation of each series when the stock should become of the value of $200, and in the most distinct manner giving priority of payment to those of such series who should be willing to give the highest premium for the value of their shares. I cannot read this in any other light than that indicated. Each of the series must be treated as a separate and independent association in this particular. Whatever other dependence the one bad upon the other by way of benefits, it was not intended that the owner of any series which first matured should be subject for the liqvidation of his shares upon the will or wish of the owner of any stock which should mature in any subsequent series. He is only to be brought into competition | with the members of his own series. is obliged to forego interest. This surely is sufficient penalty for delay. In addition to this, he should not be subject to the hardship which might ensue if he were obliged to yield to the exactions which subsequent shareholders might impose, who perhaps could afford, since they lose no interest, to supply their necessities by offering high premiums for the money. If the principle contended for by the defendant should prevail, then the owner of the stock in the first series might be postponed until the owner of the stock in the last series was satisfied. In such case, were there to be eight or ten series, the owner of stock in the first would not only be deprived of his principal until the liquidation of the owners of stock in the last series, but also of his interest; so that, in case each series should not commence until the expiration of two years after the last, the loss of interest to the owner of stock in the first series would exceed the amount of his principal. Certainly there is not only nothing mutual in this, but it is in every respect highly inequitable. This view of the case is presented and enforced by Endlich in his work on Building & Loan Associations, § 47. Although the facts are different, yet, I think the same principle was applied in the case of Association v. Haley, (Pa. Sup.) 20 Atl. Rep. 1063. The defendant should be enjoined from accepting bids for the one half of the receipts aforesaid from any holder of stock in any series except the first, until all the shares of stock in such first series be fully liquidated.

(54 N. J. L. 525)

STATE (WARTMAN, Prosecutor) v. RICH

ARDS.

(Supreme Court of New Jersey. July 7, 1892.) LANDLORD AND TENANT-SUMMARY DISPOSSESSORY PROCEEDINGS.

Where a tenancy is terminable upon notice and demand of possession, and such a notice and demand has been given, terminating the tenancy on a certain day, jurisdiction to issue a rule to show cause why the tenant should not be removed from the premises under the landord and tenant act will be acquired by proof of such notice and demand; a second notice and demand after the termination of the tenancy is not required. Banking Co. v. Mitchell, 31 N. J. Law, 99, followed. (Syllabus by the Court.)

Certiorari to justice of the peace, at the prosecution of Harry Wartman, against Mary F. Richards, to review certain landlord and tenant proceedings. Certiorari dismissed.

Argued November term, 1891, before SCUDDER and MAGIE, JJ.

John W. Wartman, for prosecutor. R. S. Ransonu, for defendant.

MAGIE, J. It is unnecessary to consider the grounds presented by the defendant for dismissing the writ of certiorari, for prosecutor's sole objection to the proceedings cannot avail him. The argument in behalf of prosecutor concedes that the affidavit whereon the justice allowed the rule to show cause sufficiently shows a tenancy by the month, duly terminated by the requisite notice and demand of possession. The sole contention is that the justice acquired no jurisdiction to allow the rule, because the affidavit did not show that after the expiration of the term demand was made and notice in writing was given for the delivery of possession under the first clause of section 11 of the landlord and tenant act. The question thus raised has been settled in this court adversely to this contention. In Banking Co. v. Mitchell, 31 N. J. Law, 99, a tenancy was held to exist terminable on the discharge of the tenant from the service of the landlord. On January 12th a notice was given discharging the tenant from service on January 25th, and therefore terminating the tenancy on the latter day. It contained also a notice to quit, and a demand for the delivery of possession on January 25th; and this court held that no other notice and demand was necessary to confer jurisdiction on a justice under the clause of the act now in question. In this respect the construction which had been put upon language of similar purport in the forcible entry and detainer act was followed. Townly v. Rutan, 20 N. J. Law, 606, 21 N. J. Law, 674. This decision has long remained unquestioned, and the point decided must be considered res judicata. The certiorari must be dismissed, with costs.

(17 R I. 724)

MCCRILLIS v. MILLARD. (Supreme Court of Rhode Island. May 29, 1892.) LIMITATIONS-INDORSEMENT ON NOTE.

Where the maker of a note, on being told that he must make a payment, or the note would be outlawed and suit would have to be commenced, consents to do so, but, finding that he has

only enough money for other purposes, tells the holder that it is not necessary for any money to pass, and that an indorsement of a dollar on the note will be sufficient to renew it, and the holder thereupon makes the indorsement, stating it to be for renewal, this is sufficient to take the case out of the statute.

Assumpsit by Aaron B. McCrillis against Lorenzo D. Millard. Heard by the court, jury trial being waived. Judg. ment for plaintiff. Dexter B. Potter, for plaintiff. Henry J. Dubois, for defendant.

DOUGLAS, J. This action is brought to recover upon certain promissory notes made by the defendant. One for $1,000, due March 23, 1889, is not contested. The notes in dispute were payable to the order of plaintiff's intestate, David Millard, -one, dated September 1, 1884, on demand, for $18,488.90; the other, dated September 27, 1884, payable one day after date, for $1,687.33. David Millard died February 12, 1889. The action was commenced August 28, 1891. The statute of limitations is pleaded to the last two notes, and the plaintiff alleges a new promise on the 9th day of August, 1891. Before that time the parties had had several interviews, in which the defendant had always denied that the notes were a valid, subsisting obligation, alleging, as he says, that the larger note had been given as collateral security for debts which had been afterwards extinguished, or, as the plaintiff testifies, that the intestate was indebted to the defendant in other transactions to a larger amount than the sum of these notes. It is not quite clear from the evidence which defense the defendant relied upon, nor, in the view which we take of the case, is it important. Upon each of the notes appears this indorsement: “Aug. 9-90. Received on the within for renewal $1. A. B. MCCRILLIS, Adm'r." It is established by a preponderance of evidence that on August 9, 1890, the defendant called at the store of the plaintiff, and was shown the notes, and requested to make a payment upon them, to prevent them from becoming outlawed, and he was told that otherwise suit must be commenced. He consented to make the payment, and took out his pocketbook, and finding that he had not more money than he needed for other purposes, and being in haste to catch a train, said: "I don't need to pay you the money. All you have to do is to indorse a dollar on each of the notes, and that will renew them." Plaintiff thereupon took the notes, and made the indorsements. Defendant went out after one indorsement was made, and while the other was being written. Plaintiff then charged himself as administrator with $2 as received on account of these notes.

The defendant's counsel has argued the case as if it were one where the promise depends upon implication from the payment of money only, and urges that there was here no actual payment, and that the denial of any subsisting obligation to pay on the part of the defendant rebuts any implication of a new promise which might be drawn from his acts. We think the v.24A.no.12-37

transaction between the parties did amount to payment. "The true test," says Mr. Wood, "as to what transactions will amount to a part payment for the purposes of avoiding the statute, appears from the cases cited to be that any facts which would prove a plea of payment of interest or principal, in an action brought to recover either, would amount to a payment sufficient to bar the statute. this feature of it, is very similar to Maber Wood, Lim. § 114. The case at bar, in v. Maber, L. R. 2 Exch. 153, when the holder of the note gave a receipt for the interest to the maker's wife. In this case, as in that, the defendant had the money in his pocket, and offered to pay it. It is of no importance, as it seems to us, that the debtor, and not the creditor, first proposed that no money should pass. But we do not decide the case upon any promise merely implied from the payment of money. The weight of authority sustains the contention that a defendant's persistent denial of obligation to pay destroys the force of a mere payment as ground for an implied promise. But we find here much more than mere payment accompanied by denial of obligation. We think the form of the indorsement imports a new promise, sufficient to avoid the statute of limitations. The evidence convinces us that the indorsements were made at the suggestion and with the consent of the defendant, and were adopted by him as memoranda of his promise. A "renewal" of a promise to pay is a new promise, and it is not material which of the parties reduces it to writing, or that it be written at all, if both assent to the terms. Whatever may have been the attitude of the defendant in previous conversations, or in the interview of August 9th, with respect to these notes, is immaterial, inasmuch as he finally assented to the written memorandum.

The evidence submitted under the general issue is vague and unsatisfactory. The allusions said to have been made by the intestate to a "settlement" may well have referred to the making of the note of September 1, 1884, which was a consolidation into a security of the outstanding debts and accounts due at that time from the defendant to him. The fact that this note was retained, and an additional one given September 29, 1884, when the existence of the larger note could not have been out of the minds of the parties, outweighs, in our opinion, the statements which we have of the intestate's conversation, from which we are asked to infer that at some time between these dates the former note was extinguished. There is no evidence of payment at any time, and no suggestion, even, of the day or manner of such alleged payment. Al. though the defendant is himself excluded from testifying as to this matter, it seems strange that other evidence, in account books or memoranda or checks, should not be available to show payment, if any had been made. Judgment must be for the plaintiff for the amount of the notes and interest, less the payments indorsed.