ures, and comparisons which I have examined with care; and really this has been the point which largely has been contested between counsel. They have spent themselves, and very ably, too, in their arguments and proofs, in showing the growth of this corporation, and the expansion of its business, and the percentage of its profits allotted to stockholders, and the percentage allotted to these salaried officials. I think, however, that this whole argument on behalf of the defendants is based upon a mistaken idea of the value and significance of the mere enlargement of the corporate assets. The success of a great business or manufacturing corporation is measured by what the stockholders get, and not by mere accumulation of assets. Very often it would be far wiser for a manufacturer to stop with the one mill that he has, and take in his profits during the few years, perhaps, in which profits can be made in that mill without expansion. Very often it is a fatal mistake for the manufacturer to go on and buy more mills. He may be blowing a bubble that after a time will burst. It may be that this large accumulation of profits which this corporation has turned into these new mills, this $133,000 that they put into the Saugerties mill, may all go upon liquidation, upon the failure of the business, to pay creditors, and the stockholders may never have a dollar out of it. I do not see that the aggregation of assets in the expansion of a business venture, when all the assets are left at the risk of the business and may never come to the stockholders, affords a very sure basis for enlarging the salaries of the corporate agents and officers. The idea is that they are to be paid for accumulating these large assets and exposing them to the risk of an enlarged business; but it is not assured as yet that any success will come out of it. Failure may come out. It seems to me that it would be high time for these gentlemen to enlarge their salaries when they show that their services are so much more valuable to the corporation that the stockholders are getting a substantial interest in the profits, and until that time comes it seems to me that such increases as they have made are unwarranted.

And here, again, regard must be had to the peculiar character of the stock of these private trading corporations, which is practically without market value, as distinguished from the stock of corporations like banks and trust companies and railroad companies, the stock of which is readily salable in the market. If Mr. Raynolds' 600 shares of stock had a market price which steadily rose from year to year as the undistributed profits of the corporation accumulated, then it would be true that the efforts of these skillful managers in accumulating corporate assets and piling up undistributed profits were directly beneficial in a pecuniary way from year to year to Mr. Raynolds.

In such case Mr. Raynolds, as I have said before, could realize from year to year his fair share of the profits by the sale of his stock in small lots. But in this case, and generally in all others like it, the minority stockholders' shares cannot be sold to advantage in the market, and do not increase in market value as the corporate surplus increases, and generally find a market only among the majority stockholders, who are controlling the business of the corporation. The claim in such a case that the expansion of the corporate business and the accumulation of undistributed profits, which are kept at the risk of the business, are beneficial to every stockholder, rests in my opinion upon rather a slender foundation. If the policy of expansion turns out to have been wisely adopted, then, of course, all the stockholders may finally be greatly benefited. On the other hand, if, as has been the case in countless numbers of trading corporations, the policy of expansion leads to failure, and the distribution of the entire corporate assets among creditors, to the exclusion of the stockholders, then the actual benefit received by the stockholders from the accumulation of profits seems almost to disappear from view. The only sure benefit that now occurs to me is the possibility that the minority stockholder had for making a better bargain on account of the accumulation for the sale of his stock in the very disadvantageous and limited market in which such sale might be effected. I cannot find much merit in the claim of managers of close corporations like this that their salaries ought to be increased because they are conducting the business of their employer, the business of the corporation, successfully, as measured by the accumulation of profits. I incline to think that this is an instance where equity should look behind the fiction of corporate existence, and, in measuring the compensation of the managers of a corporation by the success which their operations have attained, analyze the success to a large extent, if not wholly, from the stockholder's point of view -from the point of view of the man who cannot touch a dollar of the accumulated profits of the corporation until a dividend has been declared.

I have dealt now with the salary of the president and the treasurer, and my conclusion is that these salaries should be limited to the figures which were fixed in 1900, and which were practically assented to and accepted by Mr. Raynolds, the complainant. Before leaving this subject there is just one other matter that I meant to refer to briefly. The proofs on the part of the defendants to sustain their salaries do not seem to me to include what they might have adduced. They fixed their salaries. Of course, they come here and swear that they think they are fair. They bring a single outside expert, a Mr. McEwen, who gives some testimony, and I shall not discuss his testimony at

was filed in May, 1904, within two or three months after the resolution of the board was adopted raising these salaries. The officers will be required to pay back to the corporation the excess over and above the figures that I have mentioned which they have collected. The salaries must be accounted for -the excess paid since the adoption of the resolution. The complainant was guilty of no laches.

Very shortly after the adoption of this resolution in February, 1904, on April 18th, the attorney for Mr. Raynolds, as I recall the fact and the date, wrote a letter to the corporation distinctly protesting against the increase of salaries, and that protest was followed up in May, 1904, by the filing of the bill. The result, therefore, is that the officers will be required to account for the entire increase which they have received since the increase was made in February, 1904.

In support of the conclusions which I have endeavored to set forth, I refer to the following New Jersey cases: As to the question of a compulsory dividend: Fougeray v. Cord (1892) 50 N. J. Eq. 185, 24 Atl. 499, s. c. (on appeal) 50 N. J. Eq. 756, 26 Atl. 886; Griffing v. Griffing Iron Co. (1901) 61 N. J. Eq. 269, 48 Atl. 910; Trimble v. A. M. Sug. Ref. Co. (1901) 61 N. J. Eq. 340, 48 Atl. 912; Stevens v. U. S. Steel Corp. (N. J. Ch.; 1905) 59 Atl. 905. As to the salary question: Gardner v. Butler (1879) 30 N. J. Eq. 702; Fougeray v. Cord, supra; Davis v. Thompson & David Co. (1902) 63 N. J. Eq. 572, 52 Atl. 717; Hayes v. Pierson (N. J. Err. & App.; 1899) 45 Atl. 1091; Lillard v. Oil, etc., Co. (N. J. Ch.; 1903) 56 Atl. 254; Booth v. Land Filling, etc., Co. (N. J. Ch.; 1905) 59 Atl. 767.

(68 N. J. E. 602)

J. H. MOHLMAN CO. v. AMERICAN GROCERY CO.

(Court of Errors and Appeals of New Jersey. March 20, 1905.)

PHYSICIANS-LIABILITY FOR EMPLOYMENT—

EVIDENCE.

On an injury to a servant of a corporation, another employé took the injured servant to a physician, and during the treatment the physician determined that the services of a dentist were necessary; and the physician, on asking the corporation's manager who would pay the dental bill, was referred to a casualty company which had insured the company against liability for accidents to its employés. Held, that the fact that the manager did not deny responsibility on the part of the corporation for the medical treatment rendered, and that he referred the physician to the casualty company, was not a ratification of the physician's employment, and the corporation was not liable to him.

Appeal from Court of Chancery.

Suit by the J. H. Mohlman Company against the American Grocery Company, in which a receiver was appointed. Appeal by the receiver from an order allowing the claim of Dr. A. Nelson. Reversed.

George C. Tennant, for appellant. Jarvis N. Atkinson, for respondent.

GUMMERE, C. J. The bill in this case was filed by the complainant to have the defendant, the American Grocery Company, declared insolvent. After hearing, a decree of insolvency was entered, and a receiver appointed. Among the claims presented to the receiver was one by Dr. A. Nelson for medical services rendered by him to one Charles Landhagen, a boy who had been in the employ of the grocery company. The claim having been rejected by the receiver, Dr. Nelson appealed to the chancellor, and the hearing of this appeal by one of the vice chancellors resulted in the setting aside of the action of the receiver, and the allowance of the debtor's claim to the extent of $253. From the order allowing this claim the receiver now appeals to this court.

The following facts appeared from the proofs submitted by the vice chancellor: Landhagen, the boy to whom the physician's services had been rendered, was kicked by one of the company's horses while engaged at work at their stable, and received a severe injury to his jaw. He was immediately taken by another employé of the company (one Schriever) to the doctor's office for treatment. Schriever, upon being asked by the doctor who would be responsible for his bill, replied that the American Grocery Company would be good for it. During the course of the treatment, which extended over a period of more than two months, it became necessary, in the judgment of the doctor, to have an intradental plate made for the boy. This work required the services of an expert dentist; and the physician so advised a Mr. O'Brien, another employé of the grocery company, who was in the habit of accompanying Landhagen on his visits to the doctor's office. At the same time that the doctor advised O'Brien of the necessity for this plate, he asked him who would pay the dentist's bill; and the latter referred him to the grocery company's cashier. The doctor then called upon the cashier, who in turn applied to the company's manager for instructions, and was told by the manager to refer the doctor to the Fidelity & Casualty Company, a corporation which had insured the grocery company against liability for accident to its employés. The cashier obeyed this instruction of the manager, and the doctor then called up the casualty company on the telephone, and was informed by the agent of the casualty company who answered his call not to go ahead with the case until that company had looked into the matter, and that if he sent the boy to the dentist, and incurred any bill, he would have to pay it out of his own pocket. No other communications were had by the doctor with the employés or agents of the grocery company relating to compensation for his services, so far as the proofs in the case show.

It was not contended that the statement made by Schriever, that the American Grocery Company would be good for the physician's bill, imposed any liability upon that corporation. In fact, it was conceded by counsel and held by the vice chancellor that he had no authority to bind it, and that there was nothing in the case from which it could be concluded that Schriever's statement had been communicated to the grocery company, and ratified or acquiesced in by it. But the vice chancellor considered that liability on the part of the grocery company to pay the physician's bill was shown by the fact that, when its manager was advised as to the necessity of having an intradental plate made for the boy, he, instead of denying any responsibility on the part of the company for the boy's injuries, or any liability to pay for the medical and surgical treatment rendered necessary thereby, referred the physician to the Fidelity & Casualty Company. The vice chancellor was of opinion that this failure to repudiate liability, coupled with the reference of the matter to the casualty company, was "the most positive affirmation of the liability of the assured that could possibly be made"; that it was "a ratification of the retainer of the doctor, and notified him that he was contracting an obligation against the corporation from day to day while rendering those services" to the boy. We do not think the deduction drawn by the vice chancellor from the failure of the grocery company's manager to repudiate liability on its part, and his referring the doctor to the casualty company, is justified. The question of the company's liability was one which the manager was not concerned with. He knew that if it existed the company was protected against loss by reason thereof through its contract with the casualty company. He properly concluded, therefore, that as the casualty company was ultimately liable, if liability existed at all, for the expenses incurred on account of the boy's injuries, that company, and not the grocery company, was the one to determine whether or not the proposed expenditure should be made. His reference of the physician to the casualty company was tantamount to saying: "We have no responsibility in this matter. If the boy has any claim, the casualty company must pay it. They, therefore, and not the American Grocery Company, are the ones by whom the question of incurring this proposed expense must be passed upon." Instead of being an affirmation of the grocery company's liability, and a notification to the physician that he was contracting an obligation against that company by treating the boy for his injuries, it was rather a notification that the doctor must look to the casualty company, and not to the grocery company, for compensation for his services.

Finding nothing in the evidence submitted to the court below from which a promise on

the part of the grocery company to pay the claimant for his services can fairly be implied, we conclude that the order appealed from should be reversed.

(69 N. J. E. 485)

In re HYNES' WILL. (Prerogative Court of New Jersey. May 9, 1905.)

APPEAL-DISMISSAL-PROBATE PROCEEDINGS

ORPHANS' COURT.

Under P. L. 1898, p. 793, § 202, declaring that proceedings of a surrogate respecting the probate of a will shall be subject to appeal to the orphans' court by any person interested, and to proceedings thereon as if the will had not been proved, an appeal to the orphans' court may, with the consent of appellant, be dismissed without notice to a person who was cited to appear, but did not himself appeal.

Appeal from Orphans' Court, Hudson County.

Proceedings for probate of the will of Mary Hynes, deceased. From a decree admitting the will to probate Mary Hynes appealed to the orphans' court, and from an order of that court dismissing the appeal Roger Ryan appeals. Affirmed.

James A. Gorden, for appellant Roger Ryan. Wilson, Carr & Stackhouse, for appellees.

BERGEN, Vice Ordinary. By the decree of the surrogate of the county of Hudson bearing date September 3, 1903, the last will of Mary Hynes was admitted to probate. From that decree an appeal to the orphans' court of the county of Hudson was regularly taken by Mary Hynes, one of the children of the testatrix, and citations were thereupon issued to all persons interested, as if the contest had been instituted by caveat, and there had been no decree by the surrogate. On August 24, 1904, an order was made, with the consent of the appellant, by the orphans' court dismissing the appeal of Mary Hynes; and it is from this order that Roger Ryan, who was among those cited on the appeal of Mary Hynes, appeals to the prerogative court, although he has never appealed from the surrogate's decree of probate.

The only question to which the brief for the appellant Ryan was addressed is the power of the orphans' court to dismiss, with the consent of the appellant, an appeal from the decree of the surrogate admitting a will to probate, without notice to all persons who may have been cited to appear, and without hearing the subject-matter of the appeal. The general rule that an appellant may have his appeal dismissed at any time while the cause remains within the jurisdiction of the appellate court, upon such terms as to costs as may be lawfully imposed, is well established; but the appellant here insists that under our statute the orphans' court has no power to dismiss an appeal of this

(71 N. J. L. 301)

HILL v. BUCHANAN et al.

March 20, 1905.)

NOTES-INDORSEMENTS-LIABILITY OF IN

and to proceedings thereon as if the will had not been proved." In my opinion, the decree of the surrogate admitting this will to probate operates as a conclusive adjudication, which can only be avoided by an appeal taken within the time allowed by the statute, and proceedings under the appeal should be confined to ascertaining and establishing the rights of the party prosecuting the appeal. Under this statute the proceedings below are made "subject" to appeal at the option of one qualified to exercise that right, and the language used cannot be construed to mean that all who could, but have not availed themselves of the option within the time fixed by law, become joint appellants, entitled to control the action of the diligent suitor.

The action of the orphans' court in issuing citations cannot invest one cited with any right he did not previously possess. Not having taken an appeal his right was lost, and the citation could not restore the privilege. While the section of the act under consideration does not authorize or provide for the citation of parties whose rights have been settled by the decree of the surrogate from which they do not appeal, it is quite proper, however, that some notice of the appeal should be given to such as might be injured by a reversal of the surrogate's action; but when thus in court, not having appealed, they can only be heard in support of the decree below. To hold otherwise would permit one who, for want of an appeal, has no standing in court, to contest a decree from which he has taken no appeal, and allow him a right which the law denies to him if proceeding on his own behalf.

Under section 13 of the act we are considering, any person interested may deprive the surrogate of his jurisdiction, and require the proponents to summon all parties, and in their presence submit the proof required to sustain a probate, in which proceeding the orphans' court has original jurisdiction; but this section applies only when a caveat is filed, or the surrogate, for reasons stated in the law, declines to act, and submits the matter to the orphans' court. If, however, no caveat is filed, and the surrogate retains jurisdiction, his determination as expressed in his decree is final, and bars all who do not appeal, where a review of his decree is sought under conditions here existing.

The decree of the orphans' court is therefore affirmed.

DORSER.

Where the name of a maker of a note payable to his own order appeared beneath that of the last accommodation indorser, and it was protested for nonpayment, and notice given to both maker and indorsers, the last accommodation indorser, having possession of the note, was entitled to call on the next indorser for reimbursement.

[Ed. Note. For cases in point, see vol. 7, Cent. Dig. Bills and Notes, § 612.]

Error to Circuit Court, Essex County.

Suit by William Hill against Jesse Buchanan and others, as executors of Paul Buchanan, deceased. Judgment in favor of defendants, and plaintiff brings error. Reversed.

James M. Trimble, for plaintiff in error. Francis Child, for defendants in error.

GUMMERE, C. J. This was an action upon a promissory note made by Louis A. Gartz to his own order, and indorsed by F. Gartz, Paul Buchanan, William Hill, and John P. Weber, in the order named, each one of whom went upon the note for the accommodation of the maker. L. Gartz himself, the maker of the note, appears upon it not only as maker, but also as first and as last indorser. When the note fell due it was protested for nonpayment, and notice of dishonor was sent to the maker and each of the indorsers. The day following Hill was called upon by Weber, the last of the accommodation indorsers, who produced the note and demanded its payment. Hill complied with the demand, and now seeks to recover the amount of the note from defendants, who are the executors of Buchanan, the indorser whose name precedes Hill's upon it. At the close of the case the trial judge directed a verdict for the defendants; stating as his reason for doing so that the plaintiff had failed to show "that Weber, who stood below him on the note, and was an accommodation indorser, had taken up the note by paying value for it, and had thus become a quasi holder for value, so as to transmit to the plaintiff such a title to the note as would enable him to maintain his suit." The plaintiff assigns error upon this instruction. The fact that the maker's name appeared upon the back of the note, beneath that of the last of the accommodation indorsers, coupled with the fact that afterward the note was protested for nonpayment, and that notice thereof was given to both maker and indorsers, was sufficient proof that the maker had parted with the note, and thereby fixed the liability of the indorsers not only to the holder, but inter sese. This being so, the possession of the note by Weber after its protest, and after notice of dishonor had been served upon