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Second. Testator devised and bequeathed as follows: "I do give and devise unto all my brothers and sisters and their representatives, after the decease of my wife, the house and lot left in trust to her, and also the bank stock left in trust to her, to be equally divided, share and share alike." The sisters, three in number, all died in testator's lifetime, leaving issue, and the question is: who takes under the words "or their representatives"? I have so recently considered this question in Howell v. Gifford, 64 N. J. Eq. 180, 53 Atl. 1074, that I shall not attempt to repeat here what I said there. Among the cases cited in the opinion is King v. Cleaveland, 4 De G. & J. 477, which seems to be on all fours with the case at bar. I think the word "representatives" is substitutionary, and means, having reference to the context, "next of kin under the statute of distributions."

(70 N. J. Eq. 797)

CITY OF ELIZABETH v. CENTRAL R. CO. et al.

(Court of Errors and Appeals of New Jersey. March 25, 1907.)

JUDGMENT-ISSUES-RES JUDICATA.

A judgment by the Supreme Court that under the riparian acts the grant by the state to a railroad company operated to terminate the existence of a street over lands included in the grant below high-water mark, while unreversed was conclusive of such question as between the parties.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 30, Judgment, §§ 1248-1252.]

Appeal from Court of Chancery.

Information by the Attorney General, on relation of the city of Elizabeth, and a bill in equity by such city against the Central Railroad Company of New Jersey and others, to test the validity of a grant of tide lands. From a decree dismissing the bill and information (59 Atl. 348), complainants appeal. Affirmed.

Frank Bergen, for appellants. R. V. Lindabury, for respondents.

PER CURIAM. Our examination of this case leads us to the conclusion that the decree appealed from should be affirmed. We concur in the opinion of the learned Vice Chancellor before whom the cause was heard in the court below, except so far as it intimates a dissent from the view expressed by the Supreme Court in the case of Elizabeth v. Central R. R. Co., 53 N. J. Law, 491, 22 Atl. 47, that under the riparian acts the grant of the state to the Central Railroad Company (which was the subject-matter of the controversy in that case as well as in present one) operated to terminate the existence of Elizabeth avenue, over the lands included in the grant, below high-water mark, as is pointed out by the learned Vice Chancellor in his opinion, so far as the issues involved in the present information and bill are concerned. The determination of the Supreme Court,

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DENCE.

STOLEN GOODS-VALUE-EVI

Upon the trial of an indictment for receiving stolen goods, the owner of the goods may testify as to their value.

[Ed. Note. For cases in point, see Cent. Dig. vol. 42, Receiving Stolen Goods, § 15.] 2. SAME-INSTRUCTIONS.

A charge of the court in such case that the jury has a right to infer from the circumstances surrounding the purchase of the goods as to whether or not the defendant must have known that the goods were stolen is not open to the construction that the court thereby instructed the jury that the only two elements of the crime charged were "that the goods were stolen" and that "the defendant must know that they were stolen," although in that connection the court omitted to instruct the jury that they must also find that the defendant bought or received the goods; the court having expressly directed the jury in another part of the charge that, if the defendant was not there that day (i. e., at the time and place where and when the goods were alleged to have been received by him) he could not have bought the goods and it was their duty to acquit him. State v. Goldman, 47 Atl. 641, 65 N. J. Law, 394 distinguished.

(Syllabus by the Court.)

Error to Supreme Court.

Emil Feiss was convicted of receiving stolen goods, and brings error. Affirmed.

Gustave A. Hensicker, for plaintiff in error. Eugene Emley, Prosecutor of Pleas, for the State.

GARRETSON, J. The plaintiff in error was convicted in the Passaic quarter sessions upon an indictment charging him with having received certain goods and chattels, to wit, one diamond ring of the value of $25, and one diamond stick pin of the value of $5, in all of the value of $30, knowing said goods and chattels to have been stolen, and the Supreme Court affirmed the conviction. The entire record has been returned under the certificate of the judge and causes of reversal have been served pursuant to section 137, p. 1147 of the criminal procedure act.

The first cause for reversal specified is permitting the alleged thief to answer the question, "What kind of a store is it?" The witness, having testified to taking the articles specified from the owner and selling them to the defendant at a store at Main street near Broadway, was asked, "What kind of a store is it?" to which answer was given, "It looks like a hockshop." We are not able to discover, nor have we been pointed by the defendant's counsel to, any particular in which this question was illegal.

The next cause for reversal is because the court permitted the owner of the goods stolen to testify to their value. It is the unlversal practice to permit the owner of goods stolen to testify as to their value upon the trial of the thief, and we know of no reason why the owner should not be permitted to testify as to the value upon the trial of the receiver. Besides, if this evidence is inadmissible, it could not be said to be injurious because it is criminal to receive or buy, knowing it to have been stolen, "any valuable thing whatsoever," without any reference as to how much it is worth.

The fourth cause for reversal relates to the refusal of the court to direct a verdict of acquittal at the close of the state's case. An examination of the evidence returned with this writ satisfies us that it was sufficient to justify and require its submission to the jury. State v. Jaggers, 71 N. J. Law, 281, 58 Atl. 1014, 108 Am. St. Rep. 746.

The fifth, sixth, and seventh causes of reversal are directed to the charge. The defendant specifies as erroneous instruction the following: "As has already been intimated, upon the motion made by the counsel of the defendant to dismiss this indictment, the jury had a right to infer from the circumstances surrounding the transaction as to whether or not the defendant must have known that the goods were stolen. Now, you have heard her story. Perhaps you will be able to recall all the circumstances besides those that I mentioned from which you can make the inference that the defendant, being an intelligent business man and accustomed to deal in this kind of business, would be able to conclude from appearances, from what took place, whether or not he was justified in the purchase of those articles, and whether or not he should make an investigation where the circumstances were suspicious." This part of the charge dealt only with the circumstances surrounding the purchase of the goods, and instructed the jury as to what bearing they might have upon the knowledge of the defendant as to whether or not the goods were stolen. The counsel of plaintiff in error, in pointing out the defects in the charge, says that the court started out with the erroneous proposition that the only two essential elements of the crime charged were "that the goods were stolen," and that "the defendant must know that they were stolen, and omitted to instruct the jury that they must also find that the defendant bought or received the goods." This is a misapprehension of the effect of the charge as a whole. At its close the court instructed the jury as follows: "If you conclude that these goods were stolen and were bought by the defendant, knowing them to have been stolen, or that the circumstances were such that he must have inferred that they were stolen, why, he is guilty of the crime charged. However, if he was not there that day, he could not have bought the

goods, or, if you conclude that he did buy the goods and did not know that they were stolen, then it is your duty to acquit him." It is also urged that there is error in that part of the charge in which the judge said to the jury: "In other words, were the circumstances surrounding this transaction, conceding the state's case, in the first place, to be true, were the circumstances surrounding this transaction and the purchase of these two articles of jewelry such that the defendant must have known that they were stolen?" If this is an instruction, then the jury was told that the defendant must have known from the circumstances surrounding this transaction and the purchase of these two articles of jewelry that they were stolen. He must have had knowledge, not suspicions. State v. Goldman, 65 N. J. Law, 394, 47 Atl. 641, holds that "the proof must be that the defendant had knowledge, not that he had suspicions."

The defendant refers to the Goldman Case in support of the alleged error in the charge as above. But the instruction in the Goldman Case was entirely different from the instruction in this case. In that case the court charged "that which a man ought to have suspected in the position of the defendant he should have suspected, and he must be regarded as having suspected in order to put himself upon his guard and upon inquiry. The proof in any case is inferential." This quotation from the Goldman Case cap have no application to the part of the charge excepted to in this case.

Another specification of cause for reversal is the following from the charge: "Now, gentlemen of the jury, I may fail to recall exactly and accurately just what was said while the testimony was being given; but, as I recall the testimony, this young woman was asked by the counsel for the defendant whether, when she was selling these things

Was not she asked by him, or did she not say to him, that her husband had pneumonia, and that she was poor? It may be that I do not recollect that testimony accurately, but it looks very much as if I did recollect it accurately when I say that question was asked of her at the time she was selling these goods, for what was the reason of asking those questions, or that kind of a question, at any other time? Didn't you say, perhaps, as a reason for wanting to dispose of these articles, that you wanted the money, that your husband was sick with pneumonia, and that you were poor? Well, the asking of a question does not necessarily bind the defendant, gentlemen of the jury, but in dealing with that part of the case you have a right to consider that element in it." In the course of the trial the witness who was the alleged thief, and who testified that she had sold the goods to the defendant, testified on cross-examination as follows: "Q. Did you tell him [the defendant] anything about your husband? A. I told him

it was my engagement ring, and said he was sick with pneumonia. Q. Did you tell him that you wanted to dispose of these things because you needed the money? A. Yes, sir. Because your husband was sick? A. Yes,

sir. Q. Did you tell him you were suffering for want of food? A. No, sir. Q. Did you tell him your husband was suffering from pneumonia, and you needed the money? A. Yes, sir." The defendant by his testimony claimed that he did not buy the articles from this witness, and could not have done so at the time she alleges, because he was then in New York. It was entirely proper for the court to state this testimony to the jury, and to direct their attention to the inferences that might be drawn from it. One very obvious inference would bear upon the truth of the defendant's alibi. The question would naturally arise: How could this conversation be tween the witness and the defendant take place when the defendant was at the time in New York? We find no error in this part of the charge.

Another specification of cause for reversal was in the part of the charge of the court referring to the evidence of an alibi. Exception was taken to this at the time of the trial, but the court, upon its attention being called to it, withdrew that part of the charge from the consideration of the jury, and evpressly directed them to disregard it.

The judgment brought up by this writ of error must therefore be affirmed.

(72 N. J. Eq. 473)

HAGGERTY v. BADKIN. (Court of Chancery of New Jersey. March 8, 1907.)

1. BANKRUPTCY-DISCHARGE TRUST FUNDS

PARTNERSHIP.

Held,

Pursuant to the formation of a contemplated partnership between defendant and intestate, the latter paid to defendant $500 for the benefit of the firm. Almost immediately thereafter intestate died, and pending his sickness defendant deposited such funds in a bank in his own name, and after intestate's death converted the money to his personal use. that intestate's death dissolved the partnership, after which defendant became a trustee of such fund for the benefit of intestate's estate, holding the same in a fiduciary capacity within Bankr. Act July 1, 1898, § 17, subd. 4, c. 541, 30 Stat. 551 [U. S. Comp. St. 1901, p. 3428], exempting from a discharge debts created by misappropriation while the bankrupt is acting in a fiduciary capacity.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 6, Bankruptcy, §§ 793-802.] 2. EQUITY

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DECREE-ENFORCEMENT-ATTACH

MENT AGAINST PERSON.

Where a surviving partner wrongfully misappropriated funds which he held in trust for the estate of his deceased partner, the latter's administrator, in a proceeding in equity to compel the enforcement of a decree for the payment of the money, was entitled to process against defendant's body, which would be executed in the absence of proof that defendant was unable to obey the order.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 19, Equity, § 1056.]

Proceeding by Austin L. Haggerty, as administrator, against John H. Badkin, to compel defendant to pay the amount of a decree on pain of being punished for contempt. Granted.

James Steen and William D. Tyndall, for complainant. A. C. Hart, for defendant.

PITNEY, V. C. This is a proceeding to compel the defendant to pay to the complainant the amount of a decree recovered by the latter against the former in this cause on the 5th day of January, 1905, for upwards of $500, besides costs.

The motion is resisted on two grounds. The first and principal ground is a discharge in bankruptcy granted a year later by the District Court of the United States for the District of New Jersey, which purports to discharge defendant from all debts and claims which existed on the 10th day of May, 1905, "excepting such debts as are by law excepted from the operation of a discharge in bankruptcy." The complainant replies to this defense that the debt for which the decree was granted is within that exception, and he relies on the fourth subdivision of section 17 of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 551 [U. S. Comp. St. 1901, p. 3428]), where are enumerated the several exceptions, the fourth of which is: "Such debts as were created by his fraud, embezzlement, misappropriation or defalcation while acting as an officer or in any fiduciary capacity." The complainant contends that the debt herein arose by a misappropriation to his own use of money which had been confided to him by complainant's intestate in a fiduciary capacity. To sustain this contention, resort is had to the original bill in the cause, the answer thereto and the proofs, and facts appearing at the trial and the findings of the court thereon.

The bill charges that the intestate, in his lifetime, about the 20th of May, 1902, being in negotiations with the defendant in reference to a proposed partnership between them. deposited with the defendant the sum of $500 as and for his share of the partnership capital. The bill further shows that immediately after such deposit complainant's intestate was taken violently ill and died of the illness on May 26th, and alleges that the actual formation of the partnership was interrupted by such illness, and was never consummated. The answer of the defendant denies these allegations, and sets up that there were in fact negotiations between the parties as to the formation of such partnership, but that the plan for such partnership did not include the use of any capital; that the defendant was employed as a salesman for a furniture house, and complainant's intestate desired to join him in the business of selling furniture; and that, in order to carry out that plan, it was necessary for defendant to abandon his present business connection, which was valu

able, and that intestate paid him the $500 as a personal compensation to him for giving up his then present lucrative job. The cause came on for hearing before me as Vice Chancellor, and I found the issue in favor of the complainant, and, as a matter of fact, that the $500 was paid to the defendant as a contribution to partnership assets and funds. I have since read over the stenographer's minutes of the evidence and my oral reasons for the decree, and am entirely satisfied with the result above stated. It appeared at the hearing that the complainant's intestate at the date of the transaction, May, 1902, was 24 years old and single, and resided with his mother in Hackensack, N. J., and worked as a clerk on a small salary for his uncle, a New York business man. The defendant was a married man about 14 years older than intestate, and lived with his wife in Hackensack. He was a salesman on a salary of $30 per week for a New York furniture house. Neither of the parties had any capital, nor were either engaged in any business of any sort for themselves. The defendant kept no bank account, but brought his weekly wage home to his wife every Saturday night, and handed it to her after the fashion of an ordinary mechanic. In this state of affairs, about the 1st of May, 1902, the parties entered into negotiations to enter into the business of selling furniture as partners, and it was supposed that they would need a little capital in the business, presumably to pay traveling expenses and the like, which under the arrangement between defendant and his employers were paid by his employers in addition to his weekly wage. For the purpose of supplying this capital, it was arranged that complainant's intestate should contribute to the business $500 and the defendant contribute his knowledge and familiarity of the business to stand as an equivalent for the contribution in cash by the intestate. Complainant's intestate borrowed that sum from his uncle in a check dated May 17, 1902, drawn by his uncle to his order. On the evening of May 19th (as near as the date can be determined) deceased took the check to the house of the defendant in Hackensack, and there indorsed it over specially to him as his contribution to the capital. Either at the moment of the indorsement or immediately after, deceased was taken violently ill with malignant diphtheria. Defendant took the check to New York, and opened an account In his own name in a bank, and deposited the check to his own credit. The date of the entry in the book is May 20th. He called to see the deceased the same evening, and found him very ill. They had some conversation on business matters, heard in part by the deceased's mother, who heard the deceased say to the defendant, "Let that remain for a few days." it appeared that no written contract had as yet been entered into between them, but typewritten sheets embodying a contract, with corrections, were found in the posses

sion of the deceased. He died on the 26th of May. Defendant called at once upon the uncle who had advanced the money, and the uncle recited to him the terms of the contract, as hereinbefore stated, and he admitted it to be correct. He speedily used the $500 for his personal use. The evidence satisfied me that the terms of the contract of partnership were substantially agreed upon, but that the intestate desired to have them reduced to writing. Under these circumstances, the question is whether the debt is excepted from the effect of the discharge in bankruptcy, and that question depends on whether it was received in the first place or afterwards detained by the defendant in a "fiduciary capacity." That it was so received or detained I think there can be no doubt, if we give to these words their ordinary meaning.

Money is received or detained by one from another in a fiduciary capacity when, in the mind of the person handing the money to the other, as such mind is known to that other, it does not become the absolute money and property of that other, to do with as he chooses as his own money, but is received by him for a particular purpose in which a person or persons other than the person receiving it is or are interested. If two persons are in partnership, and one is acting as cashier or financial manager and the other pays money to his partner to be used in partnership business, the money so paid is received in a fiduciary capacity. The receiver holds it in trust for the partnership and for the benefit of the partners in proportion to their several interests, and neither partner has the right to appropriate one dollar of it to his individual use without the consent, express or implied, of the other party. Each partner, for all the purposes within the scope of the partnership, becomes the agent of each other partner and of the partnership entity, and when a present partnership is dissolved by death of one of the partners the survivor at once becomes a trustee for the representatives of the deceased. Now, it seems to me this sort of fiduciary capacity is clearly within the language of the act. The words "fiduciary capacity" do not in my judgment refer to a technical trust such as forms the ordinary basis of treatises on that subject.

Mr. Hill, in his introduction to his work on Trustees (page 1), defines a "trusteee" as, in the widest meaning of the term, "a person in whom some estate, interest, or power in or affecting property of any description is vested for the benefit of another." And he says that that definition also extends to bailees, factors, and agents whose duties in their fi duciary character are recognized and enforced at common law. And Mr. Willis, in his treatise, published in Lord Eldon's time (page 1), gives the same definition. To the same effect is Mr. Perry in his book (section 1). The original bankrupt law of 1841 (Act Aug. 19, 1841, c. 9, 5 Stat. 440) provided in its first section that "all persons whatsoever residing etc.

owing debts which shall not have been created in consequence of a defalcation as a public officer or as executor, administrator, guardian or trustee, or while acting in any other fiduciary capacity," might apply to be discharged in bankruptcy. The fourth section provided that no person who, after the passage of this act, should apply trust funds to his own use, should be discharged. Under that legislation the Supreme Court of the United States, in Chapman v. Forsyth, 2 How. (U. S.) 202, 11 L. Ed. 236, held that a balance due from a mercantile factor to his principal arising out of the ordinary dealings between factor and principal is not a fiduciary debt in the meaning of that act. Justice McLean, in delivering the opinion of the court, held that the cases enumerated in the first section, namely, defalcation by public officer, executor, administrator, guardian, and trustee, were special trusts, the "other fiduciary capacity" mentioned must mean the same class of trusts, and says "the act speaks of technical trusts, and not those which the law implies from the contract." He then refers to the fourth section of the act, which provided that the discharging certificate, when duly granted, shall in all courts of justice be deemed a full and complete discharge of all debts, contracts, and other engagements of said bankrupt as are provable under the act, and may be pleaded as a complete bar. And the court further held that the creditor entitled to the exception must appear and show in the bankrupt court that he was entitled to the exception, and that the court for that reason had no jurisdiction as to his claim. Notwithstanding this decision, the Supreme Court of New York four years later in White v. Platt (1848) 5 Denio, 269, under the same act, held that a debt was not barred by an act of bankruptcy which arose under the following circumstances: Defendants were indebted to plaintiff in a sum certain. They transferred to him certain promissory notes as collateral to secure the indebtedness. Before the maturity of these notes the plaintiff returned them to the defendants to collect them on plaintiff's account as his agent. Defendants collected the notes, and did not account to plaintiff therefor. The court held that they received them in such a fiduciary capacity that they were not discharged by a discharge in bankruptcy. This case has never been doubted, but was cited with approval by Judge Strong speaking for the Supreme Court of the United States in Clark v. Iselin, 21 Wall. 360, 368, 22 L. Ed. 568. Here a transaction in all respects similar to that involved in White v. Platt is thus characterized in the headnote: "When a person borrowing money of another pledges with that other a large number of bills receivable as collateral security for the loan (many of them overdue), the pledgee may properly hand them back to the debtor pledging them, for the purpose of being collected, or to be replaced by others. All money so collected is money collected by the debtor in a fidu

ciary capacity for the pledgee." I stop here to say that the distinction between the New York case and the one in 2 How. (U. S.) 202, 11 L. Ed. 236, is one which runs through all the cases, and is noticed by the judges, namely, that a factor who sells goods for a principal naturally and in the ordinary course of business mingles the proceeds of the sales with his own money and the amount at once becomes a simple debt, and that the principal or consignor of the goods is presumed to have notice of the ordinary course of business. In fact, it is a pure mercantile transaction, resulting in an implied contract, and the natural remedy is by action of assumpsit at common law. In the case in New York and others I shall have occasion to cite there could be no such usual course of business, and it was the duty of the debtor defendants, as soon as one of the collateral notes intrusted to them for collection was paid, to transmit the proceeds instanter to their creditor.

Act March 2, 1867, c. 176, 14 Stat. 533, varied in its language from that of 1841. It provided not in the first section, as in that act, but in the thirty-third section, that "no debt created by the fraud, or embezzlement of the bankrupt or his defalcation as a public officer or while acting in any fiduciary character" shall be discharged under the act. The contrast between this section of the act and the corresponding section of the prior act is manifest. By dropping out the word "other" found in the first section of the old act the Legislature divorced the words "fiduciary capacity" from the list of specific trust positions enumerated in the older act. Moreover, its position in the statute is significant. And this was the view taken by many federal and state courts when that act first came under judicial consideration. Judge Blatchford, then district judge, so held in Ex parte Seymour, 6 Int. Rev. Rec. 60, 1 Ben. 348, Fed. Cas. No. 12,684, and his view was approved by Justice Nelson of the Supreme Court of the United States in Re Kimbal, 6 Blatchf. 292, Fed. Cas. No. 7,769, and by many other judges. As late as 1882 Judge Pardee followed these judges in Fulton v. Hammond (C. C.) 11 Fed. 291. In that case Hammond had received from the clerk and master in the chancery court of Lincoln county, Tenn., a sealed bill made to him in his official capacity for a large sum of money for collection, signing therefor a receipt (containing a copy of the note) in these words: "I receive said note to collect without suit, if practicable. If not I am to employ counsel and collect by suit if necessary." In a suit by the successor in office of the original payee to recover the amount collected by Hammond, the latter pleaded a discharge in bankruptcy. Judge Pardee declined to allow the plea, referring to White v. Platt, supra, and the cases decided by Judge Blatchford and Justice Nelson above cited, and held that the distinction is clear between the case of a commission merchant or cotton factor selling

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