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an individual, they would not be sustained. The testatrix intended to give the residue to the executors. Although they are not named in the clause, the gift is to them by implication. And it is in trust for such charitable purposes as they may think proper.

(42 N. J. E. 543)

SHARP v. HIBBINS and Wife.

(Court of Chancery of New Jersey. April 28, 1887.)

1. PARTNERSHIP-DISSOLUTION-ACCOUNTING.

Where, after dissolution of a partnership, all the assets are left in the hands of one partner to settle the partnership affairs, the copartner is entitled to an accounting, although the evidence shows that the defendant has paid out more in satisfaction of firm debts than he has received from the assets.

2. SAME-FIRM PROPERTY-APPROPRIATION OF, BY PARTNER-LIEN.

If a partner expends money drawn by him, upon his own account, from the firm's funds, in improvements on his wife's separate property, and in payment of interest upon a mortgage upon said property, and there is no proof that it was done surreptitiously, fraudulently, or without the knowledge of the copartner, the copartner is not entitled to a lien upon the wife's property.

Bill for an account. On final hearing upon pleadings and proofs.

J. W. Field, for complainant. G. P. Kingsley and E. M. Colie, for defendants.

RUNYON, Ch. Sharp and Hibbins were partners in business in Orange, in this state. The copartnership began in 1872, and was dissolved by mutual consent in 1877. Sharp brings this suit against Hibbins and his wife to obtain from the former an account of the partnership affairs and assets which at the dissolution of the copartnership were left in his hands, and to charge the real estate of Mrs. Hibbins with moneys which, according to the allegations of the bill, were taken by Hibbins from the funds of the firm, and expended upon that property in paying interest upon a mortgage thereon, and in improving the property with buildings, etc. That the complainant is entitled to the account which he seeks there can be no question. The proof is that Sharp and Hibbins were copartners from August 1, 1872, to January 20, 1877; that at the dissolution of the copartnership all the assets were, as before stated, left in the hands of Hibbins upon an agreement on his part with Sharp that he would settle the affairs of the concern. He has acted under that agreement, has disposed of the property, collected the debts due to the firm, and has, as he alleges, paid debts due from it, but he has never accounted with Sharp in the matter. It is urged on his behalf that he should not be required to account, because it appears by his testimony that he has paid out much more for the firm in the payment of its debts than he has received from the assets. Sharp is entitled to an accounting, notwithstanding this claim. The court will not, in such a case as this, take the account at the hearing. The only material evidence on this part of the case is that which bears upon the question whether the complainant is entitled to an account or not. Gres. Eq. Ev. 240; Hudson v. Trenton Locomotive, etc., Co., 16 N. J. Eq. 475. The claim to a lien upon the separate property of Mrs. Hibbins is not estab lished. There is no proof that the property was not hers bona fide. Nor is there any proof of fraud on her part. If her husband expended money drawn by him from the firm's funds in improvements upon her land, and in the payment of interest upon the mortgage upon the property, there is no proof that it was done surreptitiously, but, on the contrary, it would appear that it was done with the knowledge of the complainant. The expenditure for the greenhouses built on her land appears to have been made in 1873, and the payments of interest upon the mortgage were made half-yearly from November 25, 1872, down to April 10, 1876. The money drawn for those purposes was drawn by Hibbins upon his own account from the firm's bank account. It is true, they v.9A.no.2-8

were not charged to him, but the reason was that neither the complainant nor Hibbins kept any account of the moneys drawn by them for their own account except the checks themselves by which they were drawn. There is neither charge nor evidence of fraud in these matters. The complainant is entitled to no lien upon Mrs. Hibbins' property. As to her the bill should be dismissed, with costs.

(43 N. J. E. 25)

MOUNT V. PRESIDENT, ETC., OF THE MANHATTAN CO.
(Court of Chancery of New Jersey. May 10, 1887.)

1. BANKRUPTCY-MORTGAGE-FORECLOSURE-DECREE-EFFECT.

An assignee in bankruptcy appointed pending a suit to foreclose a mortgage on lands of the bankrupt will be bound by the decree and sale made in such suit, whether he is made a party to such suit or not.

2. SAME-INTERVENTION OF ASSIGNEE.

If he desires to be made a party to such suit, he must ask to be substituted in the place of the bankrupt; and, if he fails to do so, his failure will be considered as a waiver of any defense he may have had.

3. MORTGAGE-FORECLOSURE-SALE-TITLE ACQUIRED.

The title made under a decree condemning mortgaged premises to sale invests the purchaser with all the rights and equities inhering in either of the parties to the suit, whether complainant or defendant, at the time of the institution of the suit.

4. SAME-PRICE-VALUE OF PROPERTY.

So long as a judicial sale stands, the sum for which the property was sold must, as between the parties, be taken as a conclusive test of its value.

5. EQUITY PLEAS-LEAVE TO FILE.

A defendant in an equity suit can only file two or more pleas on special leave granted, and such leave will only be granted on application made on notice to the complainant, and in cases where it is made to appear that the defendant might suffer inconvenience if it was not granted.

(Syllabus by the Court.)

rules.

On motion to strike out plea. Heard on notice under paragraph 215 of the William H. Vredenburgh and William L. Dayton, for the motion. Flavel McGee, contra.

VAN FLEET, V. C. The complainant moves to strike out a plea filed by the defendants, on the ground that the matters stated in it constitute no bar to her right of action. In order to determine whether the plea is sufficient or not, it is necessary to know on what facts the complainant bases her right of action. They may be briefly stated as follows: On the thirty-first day of December, 1873, Andrew Mount and William S. Mount executed a mortgage on real estate situate in the county of Monmouth to George D. H. Gillespie and John K. Meyers to secure the payment of a bond made on the same day, conditioned for the payment of $275,000 on demand. Gillespie and Meyers, the mort gagees, were directors of the Manhattan Company, and the bond and mortgage were made to them to secure a debt which a firm, of which Andrew and William S. Mount were members, owed to the Manhattan Company. The bond and mortgage were executed with the understanding that they were to be assigned to the Manhattan Company, and they were so assigned accordingly. The Manhattan Company, on the second of January, 1874, after obtaining title to the bond and mortgage, wrote a letter to Andrew Mount, acknowledging the receipt of the bond and mortgage, and also that three other bonds and mortgages had been delivered to them, and stating that the four were held as collateral security for a note made by Wilmerding and the Mounts for $75,000, dated January 2, 1874, payable at six months, and promising that upon realizing the amount due on the note, together with all expenses, the balance should be returned to him, or his order. The mortgage executed by the Mounts to Gillespie and Meyers contained a clause, giving the mortgagees the right, in case default should be made in the payment of the money secured by it, to take possession of the mortgaged premises, and sell them at public auction, and to convey them, as the attorney in fact of the mortgagors, and out of the proceeds to retain their debt, together with the expenses of the sale, rendering the surplus to the mortgagors. The bill avers that the defendants took possession of the mortgaged premises on the twelfth of December, 1879, and held them until the following February, when they sold them for $125,000, and that the sum thus realized, together with the profits with which they should be charged, greatly exceeds the sum due to the defendants at the time of the sale. This suit is brought to recover this excess.

The complainant traces her right to this excess in this wise: Andrew Mount was adjudged a bankrupt, under the federal bankrupt law, in April, 1876. An assignee in bankruptcy was subsequently appointed, to whom the estate of the bankrupt was duly assigned. He, in February, 1879, sold and conveyed the mortgaged premises, together with all his rights and equities therein, to William S. Mount, who, by a proper conveyance, executed in October, 1885, passed all his rights therein to the complainant. These are the facts on which the complainant's right of action rests.

The defendants meet the case made by the complainant by a plea which avers that on the twenty-eighth of May, 1875, they filed their bill in this court against Andrew Mount, William S. Mount, and others for the foreclosure of their mortgage, by a sale of the mortgaged premises; that Andrew and William S. Mount appeared and answered the bill; that the case was put at issue by a replication, and regularly brought to hearing, and a decree pronounced in favor of the complainants in that cause on the nineteenth of August, 1876, condemning the mortgaged premises to sale for the payment of their debt, and directing that a fieri facias issue for that purpose; and that a fieri facias was issued on the thirty-first day of August, 1876, and delivered to the sheriff of Monmouth county, who, pursuant to its command, sold the mortgaged premises at public auction on the fourteenth day of November, 1879, to the defendants for $10,000, and subsequently, on the twelfth of December, 1879, executed a deed to them in consummation of the sale. The plea further avers that such decree, sale, and conveyance effectually and absolutely barred and foreclosed all the rights and equities of both Andrew and William S. Mount in the mortgaged premises, and also the rights and equities of all persons claiming through them, or either of them, by title acquired subsequent to the institution of the foreclosure suit. This plea, it is contended, is faulty in two important particulars: First, because it does not show that the assignee in bankruptcy was made a party to the foreclosure suit, and, not having been made a party, it is insisted that the rights with which he became invested, by force of the bankrupt law, were unaffected by the decree and sale made in that suit; and, secondly, it is insisted that the defendants by their letter of January 2, 1874, to Andrew Mount, became bound to exercise, for his benefit, the power of sale contained in the mortgage, and that they were not relieved from the performance of this duty by the foreclosure and sale of the mortgaged premises, inasmuch as they became the purchasers thereof at such sale; in other words, that they, by their letter, took on themselves a trust in favor of Andrew Mount to sell the mortgaged premises for his benefit, which was not destroyed or extinguished by the sale and conveyance under the decree of foreclosure, but was continued in full force by the fact that they acquired title to the mortgaged premises at such sale.

There is nothing in the first objection. The foreclosure suit had been pending nearly a year before Andrew Mount was adjudged a bankrupt. He had appeared to the suit, and filed an answer before the proceeding in bankruptcy was commenced. His assignee took whatever right or interest he acquired in the mortgaged premises, under the bankrupt law subject to that suit. The rule is now established that where a mortgagor is adjudged a bankrupt during the pendency of a suit for the foreclosure and sale of his mortgaged premises, and an assignee is appointed, the assignee stands, in respect to the mortgaged premises, in the same position as any other purchaser pendente lite. If the assignee desires to become a party to the suit, he must ask to be substituted in the place of the bankrupt; and, if he fails to do so, his non-intervention will raise an implication, either that he has no defense, or that he has elected to waive any defense he may have. If he fails to intervene, and a decree for sale is made, he will be concluded by it; and a sale made in execution of the decree, will bar his rights as effectually as it does those of the bankrupt. Eyster v. Gaff, 91 U. S. 521. The court, in the case just cited, say: "The bankrupt act expressly provides that the assignee may prosecute and defend all suits in which the bankrupt was a party at the time he was adjudged a bankrupt. If there is any reason for interposing, the assignee may have himself substituted for the bankrupt, or he may be made a defendant on his own petition. If he chooses to let the suit proceed without defense, he stands, as any other person would on whom the title had fallen since the suit was commenced. It is a mistake to suppose that the bankrupt law avoids, of its own force, all judicial proceedings in the state or other courts the instant one of the parties is adjudged a bankrupt. There is nothing in the act which sanctions such a proposition." The law, as thus declared, has been enforced by this court in Esterbrook Co. v. Ahern, 31 N. J. Eq. 3; and by the court of errors and appeals in Davis v. Sullivan, 33 N. J. Eq. 569, and must be considered as authoritatively settled in this state.

The second objection also seems to me to be without substance. The letter upon which it is founded did not, in my judgment, change the contract relations existing between the parties, by force of the mortgage, in the slightest degree, except that the mortgage purported to have been given to secure a debt of $275,000, while the letter admits that the debt which it secures is only $75,000. But in all other respects the terms of the mortgage and the letter appear to be substantially identical in their legal import. The mortgage conveyed the lands described in it as security for the payment of a debt. By the contract thus made the mortgagees acquired a right, if the mortgagors failed to pay the debt when it fell due, to enforce payment by a judicial sale of the mortgaged premises; and, if more was realized by the sale than was sufficient to pay the debt, the surplus would belong to the mortgagors. Now, that is just what the letter stipulates Andrew Mount shall be entitled to. It says that the four mortgages are held by the defendants as collateral security for the payment of a debt of $75,000, and that, if they realize out of these securities more than is sufficient to satisfy their debt, they will render the surplus to Andrew Mount. The method to be adopted to realize upon the securities, or to enforce payment of their debt, is not defined or marked out. The mortgagees were left free to adopt any lawful method. They had an undoubted right to resort to a sale of the mortgaged premises by judicial process. That was a remedy which was inherent in their contract, and of which no power could deprive them. That is the method which the plea avers the defendants adopted. This method of realizing upon this particular security produced no surplus. The mortgage debt was over $80,000, and the mortgaged premises, it appears, were sold for $10,000. It is true, it also appears that the mortgaged premises were sold by the defendants, within three months after they obtained title, for $125,000. It may be that the disparity between the actual value of the mortgaged premises and the sum for which they were sold at judicial sale was so great that the court, on application at the proper time, would have set the sale aside, but no relief of that kind is sought by the bill in this case. It raises no question either as to the fairness or validity of the sale. Indeed, the fact that the defendants had acquired title to the mortgaged premises by judicial sale is not mentioned in the bill. It is obvious, therefore, that no relief can be given to the complainant in this suit on the ground that the mortgaged premises were sold to the defendants for a price so grossly inadequate as to render their purchase fraudulent. So long as a judicial sale stands, the sum for which the property was sold must, as between the parties, be taken as a conclusive test of its value. Snyder v. Blair, 33 N. J. Eq. 208. If the matters stated in the plea are true, it would seem to be indisputable that the defendants have not realized sufficient upon this particular security-and this is the only security which the bill shows anything has been realized upon to satisfy their debt. There is, therefore, no surplus, and consequently nothing in the hands of the defendants for which they can be required to account.

The claim that the letter of January 3, 1874, created a trust relation between the defendants and Andrew Mount, imposing upon the defendants the duty, if they purchased the mortgaged premises at judicial sale, to hold and dispose of them for his benefit, is, in my judgment, purely fanciful. There is nothing in the letter, as I read it, which gives the least support to this claim. The only duty which the defendants assumed by the letter was, in case they realized more from the security than was sufficient to pay their debt, to render the surplus to Andrew Mount. As already remarked, the defendants were at liberty to adopt any method or remedy for realizing upon the securities which the law furnished. The remedy which they adopted was a foreclosure of this particular mortgage by a judicial sale of the mortgaged premises. Their right to resort to this remedy was, in my judgment, beyond dispute, and I regard as equally certain that the title that they thus acquired to the mortgaged premises invests them, so long as it stands, with all the rights and equities which inhered in the parties, whether complainant or defendant, at the time of the institution of the suit.

The case upon which the complainant wholly relies to vindicate her claim that the defendants took title to the mortgaged premises, under the sale in foreclosure, for the benefit of Andrew Mount, or those standing in his right, is Brown's Adm'r v. Tyler, 8 Gray, 138. It appeared in this case that the plaintiff's intestate had assigned a mortgage which she held on the lands of one Gardner to the Bank of Roxbury as collateral security for a debt which the defendant owed to the bank. The assignment was a pure matter of favor to the defendant. The bank subsequently proceeded, by a course of practice peculiar to Massachusetts, to foreclose the mortgage. This was effected by an entry on the mortgaged premises pursuant to judicial authority, and holding possession for three years thereafter. The bank, two years after its title had become indefeasible as against the mortgagor by three years' possession, sold the mortgaged premises for enough to satisfy its debt. After the bank sold the mortgaged premises, the plaintiff brought an action against the defendant to recover the money which his intestate had paid, by force of the assignment and the subsequent proceedings, for the defendant's use, and the defendant set up the statute of limitations in bar of the action. The question which this condition of the pleadings presented, was, when should it be considered the money was paid? When the title of the bank to the mortgaged premises became indefeasible as against the mortgagor, or at the later period, and when the bank actually realized its money on the sale of the mortgaged premises? Chief Justice SHAW, who heard the case originally, held that payment should be considered to have been made on the expiration of three years after entry when the title of the bank became indefeasible, and he consequently adjudged the action to be barred; but the supreme court, on a review of the case, adopted the other view. They held that the property, as well after foreclosure as before, was equally held in trust for the benefit of both pledgeor and pledgee, and was to be disposed of for the benefit of all parties. They said: "On the one hand, the assignee who held the same as collateral security was not, in consequence of the foreclosure, required to take the land in payment, if he was ready and willing to proceed to reduce the same to cash by a

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