Wisner v. Osborne

55 A. 51, 64 N.J. Eq. 614, 19 Dickinson 614, 1903 N.J. Ch. LEXIS 97
CourtNew Jersey Court of Chancery
DecidedMay 16, 1903
StatusPublished
Cited by1 cases

This text of 55 A. 51 (Wisner v. Osborne) 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
Wisner v. Osborne, 55 A. 51, 64 N.J. Eq. 614, 19 Dickinson 614, 1903 N.J. Ch. LEXIS 97 (N.J. Ct. App. 1903).

Opinion

Stevens, Y. C

This case is, in its essential features, like Taylor v. Wands, 10 Dick. Ch. Rep. 495. There John Taylor, as here J. K. Osborne, having failed in business and being heavily indebted, undertook to form a corporation, putting in as capital money derived from the surrender of an insurance policy issued for the benefit of the wife. There, as here, the stock representing the money put in was, most of it, issued to the wife. There, as here, the debtor took one share, of stock to qualify him to become a director and president, and there, as here, the stock, chiefly through the debtor’s skill and experience, increased greatly in value and the company earned and paid large dividends. It was there held by the court of errors that the wife and her transferees were not only entitled to retain the stock as against her husband’s creditors, but were also entitled to the company’s earnings, although, as Mr. Justice Magie said in that case, the corporation owed its success to the husband’s business ability and exertions.

I cannot find anything in the proofs to differentiate that case from this.

The evidence is voluminous and some of it vague and conflicting, but the material facts are few in number and not controverted. Much of the evidence relates to a period when the company’s affairs became prosperous, and has little, if any, bearing upon the merits, being admitted only because it was claimed that it would throw a reflex light upon the period of organization in 1892. It does not seem to me to illumine that period at all or to cast any doubt upon the real character and the good faith of .the original transaction if we view it in the light of the law as authoritatively laid down in Taylor v. Wands.

Eor three years the company had a precarious existence, having few assets, loaded down with debts and subject to chattel mortgage sales. Had this suit been brought during that period there would have been absolutely nothing on which to found a decree that the stock or the property was really the husband’s and subject to his debts. The mere fact that this company, after that time, became prosperous and that its prosperity was due in large measure to the efforts of the husband in his char[616]*616acter of officer and manager cannot convert that into his property which before belonged to his wife.

Section 9 of the bill of complaint charges that the stock of the company belongs to Joseph K. Osborne, but that fifty shares stand in the name of his son, Edgar, and section 15 charges that the stock is in equity subject to the lien of the judgment. In support of this vague allegation the plaintiff relies upon the following facts: Edgar came of age on June 29th, 1894. Both before and after that time he lived with his father. At the age of seventeen he went to work in a printing office in New York. He received first $5 a week and afterwards $10. A part of his earnings he, with his father’s consent, invested in stock of the Eighth Ward Building and Loan Association. The investment was made in his own name. When the J. TL Osborne Manufacturing Company was organized he sold this stock and gave the proceeds ($400) to its treasurer. Eor this he received on October 29th, 1892, three shares of the J. K. Osborne Company.

About the same time he went into that company’s employ, receiving first $5 a week, then $10, and afterwards more. On April 27th, 1895, the company was indebted to him for salary the sum of about $800. On that day an agreement, in writing, was entered into between himself, his father and mother and one Wolfe for an apportionment of one hundred and seventy-five shares of unissued stock, by the terms of which he was to receive, and did in fact receive, thirty-two shares. This was received by him apparently in satisfaction of the moneys owing to him at the time by the company. The stock certificate book and the minutes show that the stock was issued to the stockholders in a very irregular way, but, so far as Edgar’s liability to the complainant is concerned, these irregularities are not very material. The issue to Edgar of three shares is thus shown to have been made at a time when he was a minor, and the $800, for which the thirty-two shares were issued, represented wages or salary due in part before and in part after he came of age. The contention is that the money which Edgar put in and the wages due for his labor before his majority belonged to his father, and that consequently the stock given for them is, in law, [617]*617stock held by him in trust for his father and subject to the claims of his father’s creditors.

I will assume that the before-mentioned allegations of the bill are sufficiently specific to permit of this contention being urged. On that assumption I do not think that the claim can be maintained. The question is, can a father who is indebted permit his minor son, as against his creditors, to receive and invest his earnings and hold them as his own ?

According to the Roman law, children of any age, begotten in lawful wedlock, were under their father’s power. As regarded the person, this power, until after the time of Augustus, extended to their life and liberty; as regarded property, in the words of the Inst. Lib. 11 tit. 9:

“Anciently whatever came to children, male or female, was acquired for the parents without any distinction, if we except the ‘peculium Castrense,’ and this so absolutely that what was acquired by one child the parent might have given to another or to a stranger or sold it or applied ■it in what manner he thought proper.”

In the time of Justinian, however, the father was only permitted to take the usufruct of what the son had acquired by any other means than his father’s fortune. The father might, indeed, have emancipated the son, but emancipation, at any age, depended almost entirely upon the father’s will.

In striking contrast with the civil law is the common law. That law gives the infant’s property to the infant. It does not even give the father the usufruct or enjoyment of it during the limited period of the son’s minority. Says Blackstone (1 Bl. 453) :

“A father has no other power over his son’s estate than as his trustee or guardian, for though he may receive the profits (of land held by Socage tenure) during the child’s minority, yet he must account for them when he comes of age.”

As to personalty, says Judge Vredenburgh, in Graham v. Houghtalin, 1 Vr. 557, when a child, in the lifetime of its father, becomes vested with it, “no one is strictly entitled to [618]*618take it as guardian until a guardian has been duly appointed by some public authority.” Under paragraph 38 of the Orphans Court act (Gen. Stat. p. 2363), first enacted in 1843 (P. L. of 1843 p. 84), the father may be appointed guardian of the estate, real and personal, of his minor children.

The law is that the minor’s property, however acquired, is his own, and that even the father, if he be trusted with its administration, must account to the infant for it when he comes of age.

This is the status of the minor’s property. Now, as to his earnings. Says Blackstone (1 Bl. 453) :

“He [the father] may indeed have the benefit of his children’s labor while they live with him and are maintained by him, but this is no more than he is entitled to from his apprentices or servants.”

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Bluebook (online)
55 A. 51, 64 N.J. Eq. 614, 19 Dickinson 614, 1903 N.J. Ch. LEXIS 97, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wisner-v-osborne-njch-1903.