(96 N. J. Law, 105) (113 A.) POLHEMUS v. MELIDES. (Supreme Court of New Jersey. April 28, Arrest 1921.) (Syllabus by the Court.) 15-May be had for fraudulent promise to marry accompanied by seduction. Where a man promises to marry a woman, at the same time seduces her, the seduction being effective by means of the promise of marriage and entering into the promise as a component of the wrong, he then refuses to perform his promise and abandons her, the original promise is a fraud for which he can be arrested and held to bail. Perry v. Orr, 35 N. J. Law, 295, applied and followed. Action by Caroline Polhemus against Harry Melides, for breach of promise of marriage. On motion to discharge defendant from arrest. Motion denied. In this case, all these facts are present, set I out in the affidavit, except "the attempt to elude the jurisdiction and process of the court." We think this is not a necessary element in the proof of fraud; it may be an additional circumstance which may be considered. But without this the affidavit in this case is sufficient. This is the meritorious question on this motion, in this case. The motion therefore is denied. The order was made under the fourth subdivision of section 57 of the Practice Act (P. L. 1903, p. 551; 3 Comp. Sts. of N. J. p. 4069), viz. that the defendant fraudulently contracted the debt or incurred the demand. All the mooted questions in this case are fully discussed in Perry v. Orr, 35 N. J. Law. 295. A restatement of them seems therefore unnecessary. There are but few cases in the reports on the subject. They will be found Argued before SWAYZE, PARKER, and collected in the note to Mainz v. Lederer, 59 BLACK, JJ. George J. Chryssikos, of Jersey City, the motion. William A. Kavanagh, of Hoboken, posed. for op L. R. A. 957. In 4 Ruling Case Law, p. 154, par. 12, it is stated the courts have generally held seduction to be a sufficient fraud to sustain the right to arrest in breach of promise suits, and as exempting from the operation of constituBLACK, J. This was a motion to discharge tional provisions prohibiting arrests in acthe defendant from arrest, in an action for tions for debt, except where fraud exists. 5 breach of promise of marriage. The record C. J. p. 459, par. 113; Id. p. 447, par. 96. shows a Supreme Court Commissioner made By holding the affidavit submitted on this moan order to hold the defendant to bail, in an tion sufficient to justify the order made by action for a breach of promise of marriage. the Commissioner, we do not preclude the The order was based on the ground that the defendant from any inquiry into the fraud, defendant fraudulently led the plaintiff, Caro- at the trial, under the case of Austrian v. line Polhemus, to believe that he would mar-Laubheim, 78 N. J. Law, 178, 73 Atl. 226, afry her, that he willfully and fraudulenty deceived her by his statements made to her during the time that he kept company with her, then refused to carry out his promise to marry her. The affidavit presented to the Commissioner, on which the order is based, is attacked as insufficient. We think the affidavit fully supports the order made by the Commissioner. It shows that, under the promise of marriage, the defendant seduced the plaintiff, the seduction being effective by means of the promise of marriage, and it entered into the promise as a component of the wrong. The parties lived together as man and wife, under the name of Mr. and Mrs. Harry Melides, at No. 1136 Garden street, Hoboken, for some time. On November 2, 1920, the plaintiff gave birth to a baby boy, the father being the defendant. During all this time the defendant continually promised to marry the plaintiff, until he deserted her. firmed 80 N. J. Law, 459, 78 Atl. 1134. 1. Corporations 668 (7)-Service on officers of foreign corporations temporarily in the state on personal business held abortive. Where defendant corporations were not authorized to and never had in fact transacted any business in this state, service on their officers temporarily in this state on business of their own was abortive. 2. Equity 392-Change of counsel no ground for rehearing. Complainant's motion for rehearing on the ground that he has obtained new counsel whose plea is, in effect, that if given another chance he could make a better showing of facts, and a more persuasive argument upon the facts and the law, than his predecessor had made, must be denied where there are no newly discov In the case of Perry v. Orr, 35 N. J. Law, 295, 301, Mr. Justice Scudder said the affidavits in the case sufficiently disclose the facts of the promise to marry, the seduction effected by means of the same, the attempt to elude the jurisdiction and process of the ered facts. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes Corporation Act, § 88, provides that service of process in personal actions against a foreign corporation may be made on any officer, director, agent, or engineer of such corporation personally or at his dwelling house, but for such service to have legal vitality and constitutional sanction the corporation must be found in this state-that is, it must have subjected itself to the jurisdiction by "doing business" in this state, and a single or isolated transaction is insufficient and participation of ouicers of defendant foreign corporations at a convention of a national trade association is not a "doing business" within the state so as to subject the corporations to jurisdiction by service on such officers acting as its delegates. [Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Doing Business.] 6. Equity 392-Rehearing will not be granted for counsel's mistake of law or error of judgment as to force of evidence. A rehearing will not be granted because of error of judgment or mistake of law by counsel as to the pertinency or force of certain evidence. 7. Pleading 34(4)-Construed most strongly against pleader. Pleadings must be construed most strongly against the pleader. 8. Corporations 360-In suit to assess nonresident stockholders, inferable from bill not alleging otherwise that defendants bought stock in their home state. Where in a suit by a receiver to assess defendant nonresident stockholders in a domestic corporation the bill did not allege that sales of the stock to defendants was negotiated in the state, construing the pleading most strongly against the pleader, it is not to be implied that they were, but, on the contrary, it is inferable that the sales were made in the home states of defendants, who manifestly did not subscribe for the stock. 9. Corporations 563 (2)-Receiver suing nonresident stockholders not entitled to complain if abortive service is not allowed to stand as notice of assessment. An abortive personal service on officers of nonresident corporation defendants sued by a receiver as stockholders of a domestic corporation may well be allowed to stand as notice of a proposed assessment, but the receiver has no cause for complaint if this course is not adopted where defendants have already been served with notice as directed by an order of publication. Suit by W. Holt Apgar, receiver of the Intonna Glass Company and others, praying dependent Glass Company, against the Althat an assessment be levied against defend ants for the par value of the amount of stock for which they subscribed and that they be decreed to pay the assessment to plaintiff re ceiver. Decree for the defendants. On rehearing. Original decree adhered to. Burnett, Sorg, Murray & Duncan, of Newark, for the motion. Homan & Buchanan, of Trenton, opposed. BACKES, V. C. [1] The receiver of the defunct Independent Glass Company (window glass trust) filed its bill against 32 foreign corporations, setting up that they were stockholders of the company, and praying that an assessment be levied against them "for the par value of the amount of stock for which they subscribed," and that they be decreed to pay the assessment to the receiver, so that he may satisfy the company's debts and the cost of the administration. Process issued and was returned non est, and thereupon an order for substituted service upon the defendants was entered, and published and posted as therein provided. Later a second subpoena issued against them and was returned by the sheriff of Atlantic county served upon three, the Dunkirk Window Glass Company, Camp Class Company, and Smethport Glass Company, service being made upon the president of the first two and upon the vice president of the third. They entered special appearances, and upon the return of an order to show cause the service was quashed, it appearing by the proofs that the defendants were not authorized and never had in fact transacted any business in this state, which was not controverted, and that the officers upon whom process was served were at the time temporarily in this state upon business of their own. Service under such circumstances was obviously abortive. Camden Rolling Mill Co. v. Swede Iron Co., 32 N. J. Law, 15; Puster v. Parker Mercantile Co., 70 N. J. Eq. 771, 67 Atl. 1102. drawn to make this motion for a rehearing. [2] An appeal was taken, which was withThe receiver has taken on new counsel, chance he could make a better showing of whose plea is, in effect, that if given another facts, and a more persuasive argument upon the facts and the law, than his predecessor had made. There are no newly discovered facts, and for that reason the motion must go down. Kirschbaum v. Kirschbaum, 111 Atl. 697. [3] A motion for a reargument on the case (113 A.) as made comes too late after the entry of the order or decree. [4] Jurisdiction of the court over the persons of the defendants was properly raised by motion to quash the writ. Brimberg v. Hartenfeld Bag Co., 89 N. J. Eq. 425, 105 Atl. 68. See Interstate Amusement Co. v. Albert. 239 U. S. 560, 36 Sup. Ct. 168, 60 L. Ed. 439; Knapp et al. v. Bullock Tractor Co. (D. C.) 242 Fed. 543. in the scope of corporate capacity. The business of the convention was that of the association, and the participation therein by the defendant corporations cannot by any stretch of fancy be looked upon as doing business in this state so as to render the foreign corporations amenable to our jurisdiction and subject to a decree in personam. A single or isolated transaction is not doing business. D. & H. Canal Co. v. Mahlenbrock, 63 N. J. Law, 281, 43 Atl. 978, 45 L. [5] The officers of the defendant corpo- R. A. 538; Von Seyfried v. Vollers, 75 N. rations were at the time process was served J. Law, 405, 67 Atl. 930. Moreover by "busiattending a convention of the National As-ness" is meant trading, in its broadest sense, sociation of Window Glass Manufacturers at commercially, financially, or otherwise, withthe Traymore, Atlantic City, of which they individually were members. So it appeared by the proofs. Present counsel says that, if given the opportunity, he believes he can show that the corporations were members of the association, that the officers were their representatives, and that their mission into this state was upon business of their companies, the convention, the object of which, admittedly, was to confer and act upon matters involving solely the policy of the confrères in their common calling. He further says that this would have been shown upon the original hearing had the affiants been put to a cross-examination upon their depositions, and for the first time calls my attention to a request to that effect in the affidavit of the receiver. Counsel at that time neither presented nor pressed the application. I fail to see how these developments would change the result. Section 88 of the Corporation Act provides that service of process in personal actions against foreign corporations may be made "upon any officer, director, agent, clerk or engineer of such corporation" personally or at his dwelling house. C. S. p. 1653. But, that such service have legal vitality and constitutional sanction, the corporation must be "found" in this state; that is, it must have subjected itself to the jurisdiction by "doing business" in this state. Carroll v. N. Y., etc., R. R. Co. 65 N. J. Law, 124, 46 Atl. 708; St. Clair v. Cox, 106 U. S. 350, 1 Sup. Ct. 354, 27 L. Ed. 222. In Doctor v. Desmond, 80 N. J. Eq. 77, 82 Atl. 522, Vice Chancellor Leaming quashed the service of a subpoena ad respondendum served upon the director of a Pennsylvania corporation attending a stockholders' meeting in this state of a corporation of this state. He found that the officer represented the foreign corporation at the meeting, and that to that extent the corporation was transacting business in this state, but he held, citing numerous authorities, that "It appears to be well settled that the rule that a corporation by transacting business in a foreign state voluntarily subjects itself to the laws of that state regulating the service of process on foreign corporations has reference to the transaction of some substantial part of its ordinary business by its officers or agents selected for that purpose, and that the transaction of an isolated business act is not carrying on or doing business within the meaning Counsel next insists that it was not pointed out to me that the contract sued on was made in this state, and consequently it was not argued thot the case comes within an exception to the general rule, viz. and where a foreign corporation, not authorized to do business in this state, engages in a single transaction, it is subject to process, in respect of such transaction, by service upon its officers who afterwards come into this state on either corporate or private business. He cites as authority Moulin v. Trenton Life & Fire Ins. Co., 24 N. J. Law, 222, and Mr. Justice Dixon's interpretation of that decision in National Condensed Milk Co. v. Brandenburgh, 40 N. J. Law, 111, that "Since the case of Moulin v. Insurance Co., 4 Zab. 222, and 1 Dutcher, 57, it must be regarded as the settled law of this court that, if a corporation makes a contract in a state other than that in which it was chartered, it thereby submits itself to the jurisdiction of such foreign sovereignty so far as to be liable to suit therein in regard to that contract, when summoned according to the laws of the state." Were it not for the opinion of this excellent judge, it would be my impression, that the Moulin Case holds that jurisdiction over a foreign corporation doing business within the state continues after the corporation has withdrawn, with respect to contracts made in the state, while doing business there, and that the jurisdiction may be enforced by process served according to the law of the state. If, however there is this exception to the rule, as the Supreme Court holds there is, it is not applicable here; for nowhere in the record does it appear that the contract was made in this state. [6] Of course, a rehearing will not be granted because of an error of judgment or mistake of law by counsel as to the pertinency of force of certain evidence. Warner V. Warner, 31 N. J. Eq. 549; McDowell v. Perrine, 36 N. J. Eq. 632; Patterson v. Read, 43 N. J. Eq. 18, 10 Atl. 807 (cited with ap 65 Atl. 1017); Cumberland, etc., Co. v. Clinton, etc., Co., 84 N. J. Eq. 557, at page 566, 94 Atl. 647. [7, 8] The receiver's bill alleges that the defunct company was incorporated in 1900, with an authorized capital stock of $300,000, divided into 3,000 shares of the par value of $100 each, that it commenced business with $1,000, and "that the said corporation, in pursuance of the powers conferred upon it by said articles of incorporation, did thereafter sell and dispose of its capital stock to the following named defendants residing at the places set opposite their respective names the amount of stock of the par value set opposite their names." Then follows the names of the corporations and the amount in money of stock. There is no allegation that the sales were negotiated in this state, and it is not to be implied that they were. Nor is it now contended that they were, except upon the theory that, as corporate stock has its situs in the state of its origin (Amparo Mining Co. v. Fidelity Trust Co., 74 N. J. Eq. 197, 71 Atl. 605, and 75 N. J. Eq. 555, 73 Atl. 249), and as it is to be assumed that the stock was issued there, it is to be presumed that the contract of purchase was made where issued. It is manifest that the defendants did not subscribe for the stock, and it is inferable that the sales were made in the home states of the defendant corporations, and this inference is strengthened by the rule that pleadings must be construed most strongly against the pleader. Stephens, etc., Transportation Co. v. Central R. R. Co., 33 N. J. Law, 229. [9] Counsel also insists that the service would have been permitted to stand, if not as process, as notice to the nonresident defendants of the proposed assessment, as he says was done by Vice Chancellor Stevens in Puster v. Parker Mercantile Co., 64 N. J. Eq. 599, 55 Atl. 817. That was not a case for an assessment upon corporate stock, and the practice there pursued was disapproved in Wilson v. American Palace Car Co., 64 N. J. Eq. 534, 54 Atl. 415. The course now indicated might have been adopted with propriety had it been suggested, but the complainant would have had no cause for complaint had it been refused, as the defendant corporations had already been served with notice as directed by the order of publication. (92 N. J. Eq. 609) debtedness to the payee, such payments were not voidable in the bankruptcy proceedings, where the payee was not aware of the bankrupt's insolvency, and had no reasonable ground to believe that he was being preferred. 2. Banks and banking 140(1)—Holder of checks cannot compel payment by bank. The holder of bank checks, though he is a bona fide holder for value under 3 Comp. St. 1910, p. 3738, § 25, cannot exact payment of them from the bank, which had the right to determine whether to pay them or not, under 3 Comp. St. 1910, p. 3756, § 189. 3. Banks and banking 142-Trusts 9412 -Bank charged with knowledge of account when it pays check; no recovery of amounts paid in excess of deposits from payee of checks on theory of trust. state of its customer's account on which a A bank is charged with knowledge of the check is drawn when it makes an election whether to pay the check or not, and the fact that the account appeared to be good when actually it was not is immaterial, so that a bank whose bookkeeper falsified an account on which checks were drawn is liable for the acts of its bookkeeper as against an innocent holder of the checks to whom the bank had paid the amounts they called for, and cannot recover such amounts from such holder on any theory that a trust should be declared in the bank's favor on the amounts. 4. Payment 27-Pre-existing debt makes innocent receiver of stolen money a holder for value. A person, receiving stolen money innocently in due course of business in payment of a preexisting debt, is a holder for value as against the former owner. Suit by the Liberty Trust Company against William J. Haggerty and others to impress Decree advised a trust on certain funds. dismissing the bill. McCarter & English, of Newark, for complainant. Lum, Tamblyn & Colyer, of Newark, for de fendant Mayhew. David Bobker, of Newark, for defendant Lehlbach, trustee. FIELDER, V. C. The proofs show that the defendant Haggerty was conducting a sham importing business in the city of Newark, his real purpose being to obtain money from others, ostensibly for investment in his busi LIBERTY TRUST CO. v. HAGGERTY et al. ness, or on personal loans on his promise of (No. 46/163.) repayment with interest at a high rate. (Court of Chancery of New Jersey. April 14, Complainant is a trust company doing a 1921.) 1. Bankruptcy 166(4)-Payments not voidable, where no reasonable cause to believe preference. banking business, with whom Haggerty kept He induced a a checking bank account, bookkeeper in complainant's employ to so manipulate the books of the bank that checks Although bankrupt was insolvent when pay- drawn on the bank by Haggerty were honments were made by him on account of his in-ored and paid out of an apparent balance to (113 A.) [1, 2] There seems to be no doubt that Haggerty was insolvent at the time he made the payments on account of his indebtedness to Mayhew, but my conclusion from the evidence is that Mayhew was not aware of that fact and had no reasonable cause to believe that he was being preferred as a creditor, and therefore the payments made to Mayhew are not voidable under the federal Bankruptcy Act (U. S. Comp. St. §§ 9585-9656). I am also satisfied that Mayhew had no reason to believe that Haggerty's bank account was being falsified, and that Haggerty's checks on complainant to Mayhew's order were paid with money Haggerty was stealing from com Haggerty's credit, when in fact he had in- [ bankrupt's estate should not be permitted to sufficient funds to meet his checks. The profit by the crime of the bankrupt. first false bookkeeping entry in Haggerty's account appears under date of July 24, 1918, and not again until August 14, 1918, from which latter date to on or about December 9, 1918, the false entries occur nearly every day and by means of the conspiracy between Haggerty and the bookkeeper the former succeeded in obtaining on his overdrafts a total of nearly $53,000 of the bank's funds. The falsification of Haggerty's ac count was accidentally discovered by one of the bank officials on December 9, 1918, and Haggerty was arrested the following day. A petition in bankruptcy was filed against Haggerty December 20, 1918, and he was duly adjudged a bankrupt, and a trustee in bank-plainant. Haggerty's checks came to Mayruptcy was appointed. The total amount realized on his assets was about $9,500 and upward of $150,000 in claims have been filed with his trustee. The defendant Mayhew entered Haggerty's employ about May 1, 1918. Shortly prior to that date he had been attracted by the inducements held out by Haggerty, and had made loans to him at usurious interest rates. Subsequent to the date of his employment, Mayhew continued to make loans to Haggerty on the latter's promissory notes, receiving from time to time payments of interest at rates which ran from 20 per cent. to 40 per cent. per annum and partial payments on principal. These payments of principal and interest were made by Haggerty's checks to the order of Mayhew, drawn on and honored by complainant during the time complainant's bookkeeper was engaged in falsifying Hag gerty's account, and the amount paid by complainant on these checks, against which Haggerty actually had no funds to his credit, amounts to $19,250. Complainant seeks to have the money so received by Mayhew impressed with a trust in its favor, upon the theory that the checks given Mayhew by Haggerty and drawn on complainant were not received by Mayhew as a bona fide holder for value, and that they were not effectual to pass title to Mayhew of money stolen by Haggerty from complainant. In the event that Mayhew should not be required to account for such money directly to complainant, the complainant and the trustee in bankruptcy contend that at the time of such payments Haggerty was insolvent, and that Mayhew had reasonable cause to believe that he was insolvent, and that he (Mayhew) was being preferred, and because all the payments to Mayhew were made within four months before the filing of the petition in bankruptcy, they must be repaid to the trustee. Complainant then insists that a trust on such funds should be hew as payments on account of principal and interest due on Haggerty's promissory notes which evidenced Mayhew's loans to Haggerty. On receiving these checks, Mayhew became a bona fide holder for value. Comp. Stat. p. 3738, § 25. As the holder of these checks, Mayhew had no legal right to exact payment on them from complainant, because they did not constitute a contract between complainant and Mayhew and complainant had the right to determine whether to pay them or not. Comp. Stat. p. 3756, § 189: Creveling v. Bloomsbury National Bank, 46 Bank of New Jersey v. Berrall, 70 N. J. Law, N. J. Law, 255, 50 Am. Rep. 417; National 757, 58 Atl. 189, 66 L. R. A. 599, 103 Am. St. Rep. 821, 1 Ann. Cas. 630. [3] In making its election whether to pay or not, complainant was bound to know the state of its account with Haggerty. The fact that his account appeared to be good when actually it was not is immaterial. Complainant placed its bookkeeper in a position where he had the opportunity to falsify the account, and it must be held accountable for his acts as against an innocent third party who presented checks received in the ordinary course of business. Having exercised its option to pay or not to pay by honoring the checks, complainant cannot recover the money back from the payee. This is under the general rule that payment of a check by a bank upon which it is drawn, under the mistaken belief that the maker of the check had sufficient funds to his credit to pay the check, is a finality, and the bank cannot recover from the payee of the check the amount so paid. One of three reasons and sometimes all three reasons have been assigned for the rule: First, because there is no privity between the payee and the bank; second, because the bank always has the means of knowing the state of the depositor's account by an examination of its books, and therefore the payment is not a mistake within the meaning of the general rule which |