Crisman v. Smith

44 N.J. Eq. 238

• Court: Supreme Court of New Jersey
• Decided: March 15, 1888
• Status: Published

Opinion

The opinion of the court was delivered by

Dixon, J.

Virgil H. Crisman appeals from a decree of the chancellor by which he is ordered to account to James Roe’s administrator for the moneys received, or which ought to have been collected by him, upon a voluntary subscription made by various persons, in the following words:

“We, the subscribers hereto, agree to pay to VirgiJ H. Crisman, who is hereby appointed our agent to collect and receive the subscriptions hereon, the sums by'us respectively subscribed and set opposite our names, on demand, said sums being payable either in money or notes at the bank, payable in three months after date, which notes and money are to be used for the following purpose and no other: To place the Sussex Railroad extension from Newton to Branchville in the hands and under the control of the Sussex Railroad Company, free and clear of all incumbrance, with the agreement and promise on the part of said company that they will at once complete said road and operate the same to the village of Branchville, and will issue stock of said company to the subscribers therefor and persons entitled thereto to the amount of $125,000.

“ This subscription not to be binding unless the sum of $3,500 be hereto subscribed by responsible persons.

“Branchville, April 27th, 1870."

The administrator’s claim to the account is based upon the assertion that the object of the subscription included the payment to O.badiah P. Armstrong of a debt due to him for land over which the railroad extension ran; that Roe was a surety for the debt and paid part of it, and therefore his administrator is entitled to insist that the fund subscribed shall be applied to exonerate his estate from responsibility for the residue of the debt, and to re-imburse the estate for what Roe paid.

The foundation of the claim is, that the payment of the debt to Armstrong is embraced in the object of the subscription. This object is, iu the writing subscribed, explicitly stated to be “ for the following purpose and no other: to place the Sussex railroad-extension from Newton to Branchville in the hands and under the control of the Sussex Railroad Company, free and clear of all encumbrance.” This statement affords conclusive evidence of the object of the subscribers, and the authority and duty of Crisman were to apply the funds to this object solely, and if they were not all needed for that purpose, to restore the surplus to the subscribers in proportion to their contributions. Abels v. McKeen, 3 C. E. Gr. 462.

We must, therefore, first determine whether the payment to Armstrong was proper for the accomplishment of the object ' stated.

At the date of the subscription, the pertinent facts, as we gather them from the rather unsatisfactorily printed case, were these: In 1866, the residents of Branchville desired to have the Sussex railroad extended from Newton to that village, and the Sussex Railroad Company had intimated its willingness, in case the entire right of way was secured free of encumbrance, and the road-bed was graded, to accept a conveyance thereof and issue a certain amount of its stock therefor, and then to complete and operate the extension. In order to carry out this scheme, William H. Bell and James Roe made an arrangement with Armstrong, over whose land the proposed extension would lie, by which Armstrong executed and delivered to Bell a deed purporting to convey to the Sussex Railroad Company, in fee, the right of way over his land, and Bell and Roe signed and gave to Armstrong a writing as follows:

“ Memorandum of Agreement between Obadiah P. Armstrong and the Sussex Bailroad Company.

“Whereas, the said Obadiah P. Armstrong this day conveyed by deed the right of way for the extension of the Sussex railroad from Newton to Branch-ville across his lands; therefore, the Sussex Bailroad Company agrees to pay the said Obadiah P. Armstrong, in consideration for said conveyance, the sum of three thousand dollars on or before the 1st day of June, 1867.

“ William H. Bet/l, 1 “James Roe, )

1Lafayette, Octobe)' lllh, 1866?

The Sussex Railroad Company had not authorized Bell or Roe to enter into this arrangement on its behalf, nor does it appear ever to have ratified or known of the same. Armstrong, at the time, had, or soon afterwards acquired, an understanding of the true position occupied by the company and by Bell and Roe, but, nevertheless, permitted his deed to remain in the hands of Bell, expecting that it would be delivered to the company in furtherance of the proposed scheme, and resting content with the personal obligation insured by Bell and Roe, by their executing, without authority from the company, the memorandum above recited. This posture of the affair continued until about April 8th, 1870, when the Armstrong deed was delivered by Bell to the company, and recorded, upon the understanding that the company should issue its stock and complete and operate the extension. This understanding was afterwards fulfilled. Armstrong has never claimed to hold the company responsible for the debt or to have any lien upon the land therefor.

The legitimate inference from these circumstances is, that Arm•stroug empowered Bell to deliver to the company the deed which he had executed for the purpose of conveying to the company the right of way, clear of all encumbrances, and accepted as full satisfaction for the purchase-money the personal obligation of Bell and Roe, and that when such delivery was made the title was vested in the company, free from any lien of the grantor. Such was the decision of the Vice-Chancellor in this cause, and no appeal has been taken therefrom.

It follows, from this, that on April 27th, 1870, when the document now in controversy was signed, the payment of Armstrong’s debt was not at all required for the purpose of placing the railroad extension under the control of the company clear of encumbrance. Armstrong had ceased to have any right, legal or equitable, which he could set up to defeat or delay the execution •of that purpose, and, so far as any claim of his was concerned, the purpose was already accomplished before the subscription was made.

For this reason we think the complainant is not entitled to call the defendant to account for the fund subscribed, in order that it may be applied to the payment of this debt.

The decree for an account should be reversed.

Deoree unanimously reversed,.