Ferry v. Laible

27 N.J. Eq. 146
CourtNew Jersey Court of Chancery
DecidedFebruary 15, 1876
StatusPublished

This text of 27 N.J. Eq. 146 (Ferry v. Laible) is published on Counsel Stack Legal Research, covering New Jersey Court of Chancery primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ferry v. Laible, 27 N.J. Eq. 146 (N.J. Ct. App. 1876).

Opinion

The Vice-Chancellor.

The -bill, as originally framed, presented an ordinary fore■closure case. It prayed a decree for the sale of certain mortgaged premises in satisfaction of a mortgage made by Christopher Wiedenmayer and Johanna Laible, to the complainants, for the sum of $65,000. The mortgaged premises were the property of John Laible the first, at the time of his -death in August, 1862, and were conveyed by his executors to Wiedenmayer just before the execution of the mortgage in suit. Answers were filed by certain of his children, denying the power of the executors to convey, and also alleging that the conveyance to Wiedenmayer was not made to carry out an actual sale, but was a mere artifice to enable him to execute the mortgage to the complainants. The complainants thereupon amended their bill, substantially alleging that the testator, at the time of his death, was engaged in the brewery business; that his executors, pursuant- to the directions of his will, continued his business after his death that the debt secured by their mortgage was contracted by the executors in the purchase of necessary brewers’ materials used in the business; that the business, under the management of the executors, was [148]*148prosperous, and out of the means furnished by the complainants for carrying it on, the executors, without the knowledge of the complainants, paid the testator’s debts,, and erected on the brewery premises a large brick dwelling-house, at a cost of nearly $30,000; also, a large new brewery, and a cooling-house, and made large additions to the cellars, machinery and fixtures; that in consequence of the large outlays for these purposes, the executors were unable to pay the complainants, and although never distinctly so informed, they suppose the-conveyance to Wiedenmayer was made with a view of securing their claim, and preventing a sale of the brewery premises under judicial proceedings. They, therefore, insist that whether their mortgage is a valid lien on the mortgaged premises or not, the testator, by directing the continuance of his business after his death, embarked his whole estate in trade, and charged it in equity with all debts properly incurred in its prosecution.

Two demurrers have been filed, one by Maria A. Laible, the widow and sole legatee of the testator’s deceased son John, insisting that the amendments contain no equity; and the other by the testator’s widow, alleging that the bill, as amended, is multifarious.

In support of the objection of want ‘of equity, it is said that where a testator directs his executors to continue his business after his death, and they contract debts in its prosecution, the primary remedy of creditors is against the executors-personally, and they have no remedy against the assets until the personal remedy is exhausted, unless insolvency is alleged. This view seems to have the support of the judgment of Vice-Chancellor Bacon, in Owen v. Delamere, 15 Eq. Cas. 139, and he cites the judgment of Lord Eldon in Ex parte Garland, 10 Vesey 120, as his authority. Lord Eldon’s opinion, as I read it, gives no support to this view, but so far as he lays down any rule on the subject of the order of liability, declares the fund or property embarked in trade primarily answerable.. He says: Creditors whose debts have been contracted after the death of the testator, have the whole fund that is embarked in [149]*149the business; and in addition, they have the personal responsibility of the individual with whom they deal. They have something very like a lien upon the estate embarked in the trade.” It is manifestly just that so much of his estate as the testator has embarked in the business, shall be answerable, in some form, to the creditors of the business. I think this rule may be fairly deduced from the cases, that so much and no more of the testator’s assets as he has directed to be employed in the continuance of his business after his death, with the accumulations thereon, shall stand charged in equity with all debts properly contracted in the prosecution of the business. Ex parte Garland, supra; Ex parte Richardson, 3 Madd. 138; Thompson v. Andrews, 1 M. & K. 116; Cutbush v. Cutbush, 1 Beav. 185; McNeillie v. Acton, 4 DeG., M. & G. 744. There can be no doubt that on payment by an executor, out of his own funds, of a judgment recovered against him personally, for a debt properly incurred by him in the business, he would be entitled to re-imbursement out of the trust property. It stands pledged, unquestionably, for the ultimate discharge of all debts contracted in its employment, according to the will ®f the testator. Vice-Chancellor Bacon concedes that by directing a continuance of the trade, the testator has created a trust estate, which the court will keep separate, and apply exclusively to the purposes of the trust. Owen v. Delamere, supra. Why, then, should creditors, who must in any event be paid out of the trust property, whether it be regarded as primarily or secondarily liable, be put to this circuity of ¡action, with■ its delays and useless expense? Ro reason of policy or convenience was shown for limiting creditors, in the first instance, to a personal remedy against the executors, and in the absence of a binding authority constraining me to adoq>t that view, I think the demurrer alleging want of equity should be overruled.

The position of an executor continuing the testator’s business pursuant to his will, is a hard one at best. If the business is prosperous, he can derive no benefit from it; if it proves disastrous, he is personally liable for all loss beyond the value [150]*150of the assets embarked in the venture. 2 Williams on Ex’rs 1526, marg’l. His position is one of pure hazard, which he assumes for the benefit of others, without .the slightest possibility of advantage to himself. Under these circumstances-; the court should be slow to listen to an objection made by the beneficiaries of the testator, to the remedy adopted by a creditor, resting solely on the ground that it is not the most oppressive he could have employed.

The other demurrer imputes two faults to the bill as amended: First, that it seeks to prosecute, in the same action, two distinct causes of action; and second, that it brings before the court, as defendants, certain persons who have no interest whatever in the controversy, so far as it relates to the question whether the complainants can or cannot charge the general estate of the testator with their debt.

No general rule defining what causes of action may be properly joined and what cannot, can be laid down. The question is always one of convenience in conducting a suit, and not of principle, and is addressed to the sound discretion of the court. Emans v. Emans, 1 McCarter 118; Campbell v. Mackay, 1 M. & C. 618; 1 Daniell’s Ch. Pr. 334, note 2; Story’s Eq. Pl., § 284.

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27 N.J. Eq. 146, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ferry-v-laible-njch-1876.