v. Everett and the law of England. I cannot better illustrate the nature of it than by quoting from the following cases: In Hall v. Doe, 5 Barn. & Ald. 687, L. mortgaged to S. in fee. Default in the payment of principal and interest was made in 1780, and suit was commenced more than 30 years from the date of the last payment of interest. The statute of limitations was insisted upon. Abbott, C. J., said: "Upon this finding I am of opinion that this must be considered as an occupation by the permission of the mortgagee, and, if so, there was no adverse possession, and the statute of limitations does not apply. The payment of interest would have been conclusive evidence of a continuing tenancy. That fact is not found by the jury, but that is not the only ground upon which the court can proceed. If there were any circumstances from which the court might have presumed that the premises were not occupied by the permission of the mortgagee, they ought to have found that fact. Here, however, is nothing to justify us in presuming that this occupation was not by the permission of the mortgagee. The judgment, therefore, must be for the plaintiff." In a note to Partridge v. Bere, 5 Barn. & Ald. 604, 7 E. C. L. 330, it is said: "In every case in which a tenancy by suffrance exists between the parties, and even where an adverse possession commences, as by the entry of the heir or devisee of the mortgagor without the consent of the mortgagee, the payment of interest is a recognition of the title of the mortgagee, and evidence of an agreement that the mortgagor or person deriving title from him shall hold at will, and a strict tenancy at will commences." The court of appeals in Blue v. Everett necessarily decided that the mortgagor's possession was to be deemed adverse from the very day of the breach of the condition. They inferred this, I suppose, from the two facts of nonsurrender and nonpayment. Chief Justice Abbott, in the case cited, did not think that that was the fair inference from those facts, and thought, too, that if, after the breach of the condition, interest had been paid, that "would have been conclusive evidence of a continuing tenancy." This was also denied in Blue v. Everett, on the ground that payment of interest is referable to the bond, and not to the mortgage; and it was held to be so referable not only in cases where the interest is paid by the mortgagor, but also in cases where, as in Blue v. Everett, it is paid by the grantee of the mortgagor, who is under no personal liability to pay, and who would not have paid but for the presence of the mortgage. In view, however, of the grounds upon which the decision rests, it seems plain that where, as in the present case, the payments of interest cannot be referred to the bond, but must be referred to the mortgage, the fair inference is that the mortgagor holds by permission, and not adversely. I think, therefore, in accordance with the doctrine of all the cases: (1) That,

where the payments are properly referable to the mortgage, they are an acknowledgment that the mortgagor or his grantee holds under or by permission of the mortgagee; (2) that the possession only becomes adverse when such payments cease; (3) that, as the right to bring ejectment would continue for 20 years from the time of the last payment, so the right to foreclose continues for the same period. As the last payment in the present case was made within 20 years before suit commenced, the complainant is entitled to a decree.

COYLE v. GRIFFING IRON CO. (Court of Errors and Appeals of New Jersey. Nov. 20, 1899.)

INJURY TO EMPLOYÉ-ASSUMPTION OF RISK.

A person who enters into the employ of another assumes all the risks and perils usually incident to the employment, and included in such risks and perils are those which it is a part of his duty to take knowledge of by observation. (Syllabus by the Court.)

Error to supreme court.

Action by Cornelius Coyle against the Griffing Iron Company. Judgment for defendant (41 Atl. 680), and plaintiff brings error. Affirmed.

Queen & Tennant, for plaintiff in error. Vredenburgh & Garretson, for defendant in

error.

GUMMERE, J. This action is brought by the plaintiff, Coyle, against the defendant company, for personal injuries received by him while at work in their employ. His employment began in September, 1895, and he commenced operating the machine at which be was hurt about three weeks later. His injuries were received in November, 1896. His work upon the machine included the oiling, twice each week, of certain pulleys, which communicated power to it by means of belting which ran to the main shafting of the shop. There were three pulleys to the machine; the outer ones being "loose," and turning on the axle, the inner one being "tight," and fastened to it. The axle, running through the three pulleys, operated machinery at its left end by means of cog wheels. The object of the loose pulleys was to provide a means of throwing the belting off the tight pulley, thus stopping the operation of the machine. The belting ran through a guide in front of the pulleys, and was shifted from the loose to the tight pulley (and vice versa) by means of a lever which ran across the three pulleys. The guide through which the belting ran was fastened to this lever, and extended down over the pulleys like an

The pulleys ran at a speed of between 800 and 900 revolutions a minute. The cogs which started the machinery to the left of the pulleys were about three inches away from the nearest pulley. There were oil

tubes on the inside of the loose pulleys. In order to oil them, the operator would throw the belting on the tight pulley, and thus start the machinery. The loose pulley would continue to revolve for some time by its acquired momentum, which was stopped by the operator, either by pushing a stick underneath, or by holding the hand against the flat part of the pulley. On the morning of the accident, Coyle stopped the loose pulleys in the usual manner, and, after taking out the plugs from the oil tubes, started to pour in the oil. He did this with his left hand. While he was putting back the plugs into the tubes, the belting was suddenly shifted from the tight to the loose pulley which he was oiling. It immediately commenced to revolve rapidly. One of the spokes struck Coyle's hand, throwing it between the cogs immediately to the left. The result was that he lost two fingers and part of his hand, the use of which was entirely destroyed.

The ground upon which the plaintiff seeks to impose upon his employer responsibility for the accident from which he is suffering is that, with the machine in proper order, the belt would not have shifted from the right to the loose pulley. The defect in the machine is said to have been caused by the absence of a bolt which fastened the lever to the guide, and it is claimed, and is beyond question true, that inspection by the master would have led to the discovery of the defect. The machine, as originally constructed, had two bolts making this fastening. The natural result of the absence of one of them, as was shown by the testimony produced on the part of the plaintiff, was to cause the guide to work loose from the lever, thereby making it possible for the belting to shift | from one pulley to another, although not thrown over by the man operating the machine. After the testimony on both sides was in, the trial judge, considering that the testimony showed, among other things, that the defect in the machine which caused plaintiff's injury was an obvious one, directed a verdict in favor of the defendant. The plaintiff now seeks to set aside the judgment entered upon that verdict.

That the insecure fastening of the lever to the guide, due to the absence of a bolt, was an obvious defect, and one which the plaintiff, by exercising a reasonable degree of caution, would have discovered, is clearly shown by the proofs offered by him. By those proofs it appears that the belt had been out for nearly nine months preceding the date of the accident. The plaintiff himself testified that, although he had not observed the absence of the bolt before he was injured, he noticed immediately afterwards, while standing in front of the machine, that there was but one bolt in the guide, and that there was only a hole where the other one should have been. It cannot be doubted that a defect so easily seen would have been discovered by him had he used ordinary care

in observing if the machine fell out of repair. Although the master is charged with the duty to his servant of providing reasonably safe and proper machinery and appliances for the latter to work upon, and of using due care in keeping such machinery and appliances in repair, and of making inspection thereof at proper intervals, the servant who operates a machine or mechanical appliance is on his part also chargeable with certain duties with relation to such machinery and appliances. He must exercise a proper watchfulness in order to see that, in the course of its use, it does not become defective for want of repair, and so more dangerous in its operation than it would otherwise be. And, if the repairs needed are not such as should be made by him, his duty requires him to report the condition of the machine to his employer. And this duty becomes more imperative when personal danger to himself and others may follow from the continued use of the machine while out of repair. of repair. Bailey, Mast. Liab. p. 169, and cases cited. As a corollary to this rule, it follows that, where a machine becomes defective during use, and consequently more dangerous to operate, and such defect is an obvious one, which might have been discovered by the servant by the use of reasonable diligence, he is presumed to have taken upon himself the risks incident to its further use while out of repair, and, if injury results to him from such use, the master is not liable. In other words, the servant assumes all the risks and perils usually incident to the employment, and included in such risks and perils are those which it is a part of his duty to take knowledge of by observation. Foley v. Light Co., 54 N. J. Law, 411, 24 Atl. 487; Chandler v. Railway Co., 61 N. J. Law, 328, 39 Atl. 674; Johnson v. Snuff Co., 62 N. J. Law, 417, 41 Atl. 936. The testimony in the case would not have supported any other verdict than that directed by the trial judge, and there was, consequently, no error in the instruction complained of. Aycrigg's Ex'rs v. Railroad Co., 30 N. J. Law, 460; Meyers v. Birch, 59 N. J. Law, 238, 36 Atl. 95; McCormack v. Oil Co., 60 N. J. Law, 243, 37 Atl. 617. The judgment of the supreme court should be affirmed.

WARWICK v. ELY et al.

(Court of Chancery of New Jersey. Nov. 10, 1899.)

WILL-INTEREST ON LEGACIES-ACTION FOR

LEGACY-SET-OFF.

1. Pecuniary legacies bear interest one year from the testator's death, though the will gives the executors three years in which to settle the estate, "if they think that time advantageous."

2. In an action for a legacy against executors in their representative capacity they cannot set off a claim against the legatee for rent due to them as residuary devisees or as heirs of the testator.

mitted that rent was paid by him up to the time of testator's death, but the unpaid rent accruing subsequently to the testator's death amounts to the sum of $300. It is offered to prove that the assignee, at the time he took his assignment of the legacy, knew of the existence of this debt. The land occupied by the legatee was devised to Stephen D. and James A. Ely, who are the executors of the will. Or, to state it more accurately, they, having a power of sale of this and other property, were the beneficiaries of the fund received from the sale. Now, it is apparent that the rent due after the death of testator did not belong to his estate, and could not be recovered by his personal representatives. If the will had been refused probate, the rent would have belonged to the heirs of the intestate. The will being proved, it belongs to the devisees. Whether, during the abeyance of the execution of the power to sell, the rent belonged to the beneficiaries under the will of the testator, or to his heirs, does not matter, for in no aspect can the rent belong to the personal representatives. Tayl. Landl. & Ten. 309. Now, the executors wish to set § up a claim which they hold as residuary devisees, or in which they hold a part interest as one of several heirs, against a claim preferred against them as the personal representatives of the testator. It is perceived that the right in which they claim the rent and the right in which they defend this suit are radically different. They could not sue for this rent as executors. If the claimed offset is permitted, the estate would be entitled to the benefit of the application of the rent, and the executors would be entitled to an allowance for a legacy as paid, and would so hold so much of the assets for their own personal benefit. Neither in equity nor law can a setoff be sustained, unless the claims are mutually held in the same right, unless in the latter court a peculiar equity is created by the circumstances. Black v. Whitall, 9 N. J. Eq. 572, 577; Brewer v. Norcross, 17 N. J. Eq. 219, 226. There is no equity which will permit this set-off, so the rule must control that personal representatives cannot, in an action against them in their representative capacity, set off a debt due to them personally. Stickney v. Clement, 7 Gray, 170; Bradshaw's Appeal, 3 Grant, Cas. 109. I am constrained to the conclusion that the evidence tendered to prove a set-off is incompetent for that purpose. The complainant is entitled to a decree for the amount of the assigned legacies, with interest from September 13, 1896.

become insolvent, in order to secure some of its directors against a liability incurred for the corporation. A preference of that character cannot stand, although at the time it is given there is no statutory prohibition against it.

2. Directors of a corporation, who have become its sureties to creditors, will, on insolvency, be subrogated to the rights of the creditors.

3. Certain creditors of a New Jersey corporation brought suit against it in New York. Some of its directors became its sureties in order to relieve its property in that state from attachment. After adjudication of insolvency, a part of the property came to the hands of its receiver. Order was duly taken forfeiting the corporation's charter. The receiver represented to the chancellor that the attorneys who had been defending the New York suit for the corporation would not proceed with the defense in his behalf unless their fees for past services should be paid, but that if such fees should be paid they would attempt to procure a dismissal of the complaint, on the ground of forfeiture of charter, for a specified fee, and, if unsuccessful, would try the cause for a specified fee. On this representation the receiver was authorized to pay, and did pay, such fees in arrear. Shortly thereafter, on petition of the creditors and on notice to the receiver, the order for forfeiture was modified so as to permit the New York suit to proceed. The creditors laid before the receiver their claim on the same basis as in the New York suit, and he informed them that he had adjusted it for a less sum. The receiver afterwards decided not to defend the New York suit, and so notified one of the directors. Judgment was recovered for the full amount of the claim. The directors compromised with the creditors for a sum less than their recovery, but exceeding the receiver's adjustment of the claim, and took an assignment of the judgment. Held, (1) that the directors had a lien on so much of the New York property as came to the hands of the receiver; (2) that the directors should be allowed to prove the claim of the judgment creditors on the basis of the compromise, and need not relitigate the matter with the receiver; (3) that such relief could be afforded under an answer by way of cross bill in a suit brought by the receiver to recover assets of the corporation which had been withdrawn after insolvency, and had been placed in trust for the indemnity of the directors.

4. The provision of the general corporation act, authorizing an appeal to the court of chancery from any determination of the receiver of an insolvent corporation, is not technical. Relief may be given under an original bill, or by way of cross bill, or in any proceeding by which jurisdiction may be secured. If, after the receiver's determination, a new element comes into the controversy, it is not necessary to present the same to the receiver before appealing to the court for adjudication.

(Syllabus by the Court.)

Appeal from court of chancery.

Bill by George R. Gray, receiver, against Jerome Taylor and others. Decree for complainant (38 Atl. 951), and defendants appeal. Interlocutory decree affirmed, and final decree reversed.

The cause was heard on bill, answer, and stipulation. The following is a chronological statement of the facts:

1890.

March 27th. The United States Credit-System Company, organized under the general corporation act of this state, filed Its amended certificate, stating its object to be to sell and furnish a system of credits, and to limit and guaranty wholesale dealers, manufactur

ers, and jobbers against loss arising by reason of bad debts; and that its business, with the principal office in Newark, N. J., would be carried on in all the states and territories of the United States of America, and in other countries specified.

April 9th. The company issued to the firm of S. Rawitzer & Co., of New York City, its policy insuring them against a specified excess of loss through insolvency of purchasers of merchandise sold between April 1, 1890, and April 1, 1891.

1893.

Rawitzer & Co., having made a claim, under and within the limit of their policy, for $6,912.26, and interest from November 28, 1891, which was disputed, began suit thereon in the supreme court of the state of New York, and either issued, or were about to issue, a warant of attachment against property in that state belonging to the company exceeding in value the amount of their claim, which process the laws of that state allow against a foreign corporation.

July 24th. Henry Untermeyer and Adolph Hellenberg, two of the fifteen directors of the company, at its request, gave bond to Rawitzer & Co. in $12,000, conditioned to pay any recovery in the action, and the attachment was discharged or not executed. The company, however, entered appearance and filed answer in the cause.

September 25th. The board of directors of the company passed a resolution requesting its members to "rebond" Messrs. Untermeyer and Hellenberg, and on the same day twelve of the other directors, of whom Jerome Taylor was one, gave to those gentlemen their written obligation to bear pro rata with them the payment of any sum they should be called on to pay by reason of said bond, in case the corporation should be unable, by reason of insolvency or otherwise, to reimburse them.

1894.

July 31st. A report from the company's books made to the New Jersey commissioner of banking and insurance, by examiners appointed by him, showed on July 1st an impairment in value of $85,766.13 in the capital stock of the company, then $285,550.

August 17th. The executive committee of the board of directors of the company adopted the following resolution, viz.: "Moved that we make a deposit of $6,000 with Jerome Taylor, for him to hold in trust to cover any liability on the bond given by Messrs. Untermeyer and Hellenberg in the Rawitzer case." The sum named was paid to Mr. Taylor, who on August 21st deposited it with the Fidelity Title & Deposit Company.

August 20th. At a meeting of the board of directors, the president reported that the result of an examination of the company's affairs by such commissioner showed an impairment of capital of about $60,000. The feasibility of procuring a surrender and can

cellation of stock in proportion was discussed, and the executive committee was authorized to consult counsel, and, if then they should be satisfied that it was for the best interests of the company, to make application for a receiver.

August 21st. Mr. Knight, one of the directors, and also one of the counsel, of the company, notified the deputy commissioner of banking and insurance that the company had that morning stopped issuing policies because of its insolvency, and the next day a new examination was made. The directors and officers of the company then told the deputy commissioner that the company was insolvent, and expressed a wish that a receiver should be appointed as soon as possible, as a great many claims were pressing, and they did not wish to prefer one creditor over another.

August 22d. The examiners reported to the commissioner that further investigation showed that the amount charged for liabilities on claims in process of adjustment was insufficient, and the impairment of capital on July 1st was $195,766.13.

August 23d. The commissioner filed his bill against the company for an adjudication of insolvency and appointment of receiver, and the chancellor made order to show cause thereon, returnable September 4th, and appointed George R. Gray temporary receiver.

September 4th. The receiver made his sworn report, showing an excess of liabilities over assets of $280,841.25. This included as a liability the sum of $101,299.16 as return premiums on cancellation of policies, and did not include capital stock. On the same day the chancellor adjudged that the company was insolvent, and appointed Mr. Gray permanent receiver.

September 6th. Order was made requiring creditors to present their claims within four months, and directing notice of the order to be mailed each creditor.

October 2d. Order was made declaring the company's charter forfeited and void, except for collecting and distributing assets.

November 7th. The receiver filed petition representing that before his appointment two suits had been begun in New York against the company, one by Douglas L. White for $4,000, and one by S. Rawitzer & Co. for $3,000; that in the latter case, in order to dissolve an attachment, the company gave a bond in $6,000, with a surety, and to secure the surety deposited $6,000 with Jerome Taylor; that the defense of both suits was intrusted to the firm of Rose & Putzel, lawyers, of New York City, in whose hands all papers and documents were placed; that said firm had sent a bill to the company, before its insolvency, for $500 retaining fee and for preparation of the cases; that it would be impossible for the receiver to defend the suits successfully without such papers and documents; that Rose & Putzel refused to deliver up the papers and documents, or go on with the cases, unless