690.

This precise question was decided adverse- bad as a plea in bar. In affirming this ly to the appellants' contention by the Su- judgment, Mr. Justice Depue said: preme Court in Wheeler v. Ellis, 56 N. J. "The defendant has received part of the conLaw, 28, 27 Atl. 911. sideration of his contract to purchase in the We see no reason to question the sound-conveyance of the land, which is admitted to he ness of this decision, the pith of which is the fraud practiced on him is one to be compenof some value. The injury he has sustained by that when the mortgage that accompanies a sated for in damages, and the loss he has susbond is not a lien upon the land the statute tained thereby might, in the action for the conceases to apply to the action on such bond.sideration money, be used for the purpose of reducing the amount to be recovered, but would Pruden v. Savage, 70 N. J. Law, 22, 56 Atl. not bar the action. * * In every case, what manner of defense may be made under the statute will be determined by the circumstances of the case and the situation of the defendant in reference to the subject-matter of the litigation. If the contract is still executory, or if It is upon reason equally so in the case it has been executed and has been rescinded beof the termination of a lien that once ex-tirely failed so that the defendant has no benefore suit brought, or the consideration has enisted. Franklin L. & B. Ass'n v. Richman, fit whatever from the contract, the defense may 65 N. J. Law, p. 526, 47 Atl. 426. be pleaded in bar. *** But where the contract having been executed has not been rescinded and the consideration has not entirely failed, the defense is only a partial defense and will not bar the action. In that event, it cannot be pleaded in bar, and can be used at the trial to

This is unquestionably the case when no lien ever existed. Seigman v. Streeter, 64 N. J. Law, 169, 44 Atl. 888.

The fact that the decree in the foreclosure directed the payment of the later mortgage does not affect the grounds of this decision. Wheeler v. Ellis.

Nor by parity of reason, does the fact that the debt on the bond was reduced by the proceeds of the sale that terminated the lien of the mortgage. There was no error in the refusal of the court to direct a nonsuit upon this ground.

reduce the amount of the plaintiffs' recovery."

The declaration as to the defense of fraud as a partial failure of consideration, although it was obiter the case before the court, has always been regarded as a correct exposition of the law.

In Brewster v. Brewster, 38 N. J. Law, 119, the question was directly decided in the Supreme Court. This was a case certified that brought up the question of the admissibility of testimony showing that false representations had induced the giving of the promissory note sued on. Chief Justice Beasley in his opinion said:

[2] Upon the other ground, we think that the court erred in excluding testimony offered by the defendants to show that by reason of false representations attributable to the plaintiff they were induced to pay more for the land than it was reasonably worth and more than they would have paid therefor if they had not relied upon the truth of such representations. The false representation was that the property was rented to one of the richest brewers in the state on a lease that had 10 years to run at an annual rental of $1.000. The falsity of this representation and the plaintiff's connection therewith were fully set out in the defendant's answer, and, while not a bar to the action, it presented a defense that was open to the defendants in abatement of the debt claimed by reason of a partial failure of consideration of the contract sued upon. Upon this question the excluded testimony would, if | 552." admitted, have raised a jury question. We think that the defense in question was open to the defendants.

"I can see no valid objection to this as a defense. * * The defense, if received and proved, will have the effect of confining the agreement to its honest purpose. Where fraud enters into a contract, it is not always necessary for the party wronged to rescind in order to resist its full operation. Thus, if a purchaser buying land discovers, after taking title, that he has been cheated, by means of fraudulent statements with respect to the property, he is not compelled to rescind the agreement, but he can defend and claim an abatement in a suit against him for the price of the land. This rule of practice is well settled, and is stated in the recent case of Lord v. Brookfield, 37 N. J. Law,

See, also, Knapp v. Hoboken, 39 N. J. Law, 394; Rogers v. Baker, 66 N. J. Law, 56, 48 Atl. 1003; Sommers v. Myers, 69 N. Section 13 of the New Practice Act (Act | J. Law, 24, 54 Atl. 812; U. & G. Rubber Co. March 28, 1912 [P. L. p. 379]) provides that: v. Conard, 80 N. J. Law, 293, 78 Atl. 203, "In an action upon a contract, whether un- Ann. Cas. 1912A, 412. der seal or not, the defendant may set up in abatement of the debt or damages claimed a defeet in or partial failure of the consideration of the contract sued on."

As a general proposition, fraud that induces the making of a contract works a partial failure in the consideration thereof.

This rule which we considered to be well settled is a general one for the abatement of a purchase price by reason of a partial failure of consideration due to fraud that entered into the sale, and hence in the nature of things applies to the sale of land as well as in any other case; indeed, Lord v. Brookfield was a case of the sale of land.

In Lord v. Brookfield, 37 N. J. Law, 552, the contract sued on was, as in the present The circumstance that in the present case case, a bond given in part payment for the the defendants had conveyed the land before purchase of land. A plea set up a false the suit against them for the purchase price representation that affected the value of was brought does not affect the application

not set up this defense until the action forfing the plea of not guilty, the defendant the purchase price was brought against moved "to quash the indictment on the them which, unlike rescission, was a matter ground that the grand jury which returned over which they had no control. When sued, it was impaneled and sworn and constituted they offered to prove fraud as evidence of under the act of May 27, 1913 (P. L. p. 803), a partial failure of consideration and in which had been superseded by the act of abatement of the amount claimed on their May 29, 1913 (P. L. p. 828)." The motion bond. This testimony should have been re- was overruled and an exception taken, and ceived and submitted to the jury under prop- that action is assigned as a reason for reer instructions. versal. We are of opinion that the motion

The judgment of the Supreme Court is re- to quash was properly overruled. versed, and a venire de novo awarded.

(86 N. J. L. 247)

STATE v. TOTH. (No. 136.)

The following is a statement in chronological order of the pertinent events and facts:

On May 27, 1913, the so-called "Fielder Act" (P. L. 1913, p. 803) was approved. It

(Court of Errors and Appeals of New Jersey. provided for a new method of selecting and

June 15, 1914.)

(Syllabus by the Court.)

1. GRAND JURY (§ 2*)-VALIDITY OF INDICTMENT-IMPANELING JUROks.

drawing grand and petit juries, and by its terms it took effect immediately.

On May 29, 1913, the so-called “ChancellorSheriff Act" (P. L. 1913, p. 828) was apAn indictment returned by a grand jury proved. By this act the juries were to be drawn on November 24, 1913, and impaneled selected and drawn by a commission conand sworn on December 9, 1913, pursuant to the provisions of the Fielder Act (P. L. 1913, p. sisting of the sheriff and a commissioner ap803), is a valid indictment as against an objec-pointed by the chancellor, instead of by the tion that it was not found by a grand jury sheriff alone, as under the Fielder Act. It drawn, impaneled, and sworn according to law, since the Chancellor-Sheriff Act (P. L. 1913, p. provided that: 828), by which the Fielder Act was ultimately repealed, by its terms was not to take effect until November 25, 1913, and on November 22, 1913, was decided by the Supreme Court to be unconstitutional, which decision was not reversed by the Court of Errors and Appeals until January 23, 1914.

[Ed. Note.-For other cases, see Grand Jury, Cent. Dig. §§ 1, 17; Dec. Dig. § 2.*] 2. COURTS ($ 91*)

COURT-EFFECT.

OPINIONS OF SUPREME

A decision of the Supreme Court is the law of the state until reversed by the Court of Errors and Appeals, and acts done by officials in pursuance of the law thereby declared, prior to such reversal, are valid, so far as they involve the interests of the public or third persons.

[Ed. Note. For other cases, see Courts, Cent. Dig. §§ 313, 325, 326; Dec. Dig. § 91.*} 3. GRAND JURY (§ 7*)-LEGALITY-TITLE OF OFFICERS.

The legality of a grand jury does not depend at all upon the validity or invalidity of the title of the officer by whom such body is selected or drawn. If the title of such officer is colorable, indictments found by a grand jury selected or drawn by him are as impregnable against attack as if its members had been selected or drawn by an officer whose title is unimpeachable.

[Ed. Note. For other cases, see Grand Jury, Cent. Dig. §§ 2, 16, 21; Dec. Dig. § 7.*]

Error to Supreme Court.

"All acts and parts of acts inconsistent with this act are hereby repealed, and this act shall take effect immediately, but its provisions, except as to the referendum herein contained shall remain inoperative as a law of this state until the legal voters of the state voting at the next general election held after the approval of this act for the election of the members of the General Assembly have adopted the provisions of this act in the manner hereinafter provided.

* * And if the greater number of votes cast with reference to the adoption or rejection of this act favor the adoption of this act, the act shall become effective as a law of this state on the fourth Tuesday of November, one thousand nine hundred and thirteen."

It was so approved at the polls.

On November 22, 1913, the Supreme Court decided the Chancellor-Sheriff Act to be unconstitutional.

On November 24, 1913, in accordance with the provisions of the Fielder Act, there was drawn the grand and petit jurors to serve for the next ensuing term of the courts of Middlesex county.

On November 25, 1913, the Chancellor-Sheriff Act would have become effective had it

not been declared unconstitutional by the Supreme Court.

On December 9, 1913, the grand jury was

Joseph Toth was convicted of murder in impaneled and sworn pursuant to the provi

the first degree, and brings error. Affirmed.

Russell E. Watson, of New Brunswick, for plaintiff in error. George S. Silzer, prosecutor, of New Brunswick, for the State.

TRENCHARD, J. The defendant, Joseph Toth, was indicted by the Middlesex county grand jury for murder. He was convicted of murder in the first degree.

sions of the Fielder Act.

On January 23, 1914, the Court of Errors and Appeals reversed the decision of the Supreme Court and decided the ChancellorSheriff Act to be constitutional. Hudspeth v. Swayze, 89 Atl. 780.

On January 28, 1914, the indictment in question was returned by the grand jury impaneled as aforesaid.

On February 2, 1914, the record in Hud[1] The record discloses that, before enter- | speth v. Swayze was remitted from the

Court of Errors and Appeals to the Supreme, can be no exemption of property by force of Court. special or local statutes, except in the case of On February 9 and 10, 1914, the trial and contracts which the amendment of the organic law could not reach. conviction of the defendant took place.

[1-4] The Supreme Court affirmed the judged a binding contract, the exemption contended ment of the board of equalization of taxes in for must be allowed. If it was not such a cona per curiam which reads as follows:

"The stipulation of facts shows that prosecutor was incorporated under special charter by chapter 86 of the Laws of 1861, P. L. p. 198. This charter conferred no exemption from taxation.

"By chapter 267 of the Laws of 1870, an amendment to said charter, it was provided: "That the provisions of the fifth section of an act entitled "An act to incorporate the Drew Theological Seminary of the Methodist Episcopal Church," approved February 12, 1868, in relation to the exemption of the real and personal property of said corporation from assessment and from taxation, be, and the same are hereby, extended to the corporation created by the act to which this is a supplement.'

"The provision in the fifth section of the charter of Drew Theological Seminary (Laws of 1868, p. 4) reads as follows: And the property of said corporation, real and personal, shall be exempt from assessment and from taxation.' "It further appears, inter alia, that Seton Hall College is an educational institution, and has been operating as such under its charter since 1861; that it acquired the lands on which the tax was imposed in 1861; and that no tax was levied against it until the one now in question, for 1911. The exemption is claimed by virtue of the legislation cited above, and not by virtue of section 4 of the tax act of 1903 (Act April 8, 1903 [P. L. p. 395]).

tract, then the claim for exemption must fail. The presumption is strongly against such a contract. It must be established by clear and positive evidence, or be implied from circumstances which leave no other conclusion open to a rational mind. Little v. Bowers, 46 N. J. Law. 300: State Board of Assessors v. Paterson & Ramapo R. R. Co., 50 N. J. Law, 447, 14 Atl. 610. In Cooper Hospital v. Camden, 6S N. J. Law, 691, 54 Atl. 419, Mr. Justice Pitney, speaking for the Court of Errors and Appeals, held that: "A contract that disables the state from exercising the sovereign prerogative of taxation, with respect to the property of a given corporation, is in derogation of common right, and, so far as it goes, is subversive of the power of government itself. Every reasonable intendment is against the existence of such a contract. He who comes into court asserting its existence must be prepared to show that, in fact, it was made as alleged, and that its terms are such as to reasonably admit of no other interpretation than that claimed. The contract claimed to exist in the case under review does not arise from any provision in the original charter of the appellant corporation, but rests entirely upon a supplement to the act creating the corporation. This supplement was enacted long after the passage of the act of 1846, providing that the charter of every corporation thereafter granted should be subject to alteration, suspension and repeal, in the discretion of the Legislature. The right of exempThe board of equalization of taxes, in af- tion, therefore, is based upon a supplement to firming the tax, filed a memorandum, which, aft- the charter passed at a time when the Legiser reciting the above facts, proceeds as follows: lature had expressly reserved to itself the right "The property involved in this case consists of to alter, suspend or repeal every charter tracts of land situated in the taxing district of which it might thereafter grant. But even if the village of South Orange and owned by Seton it be in doubt whether the exempting statute Hall College. These tracts do not include the was not subject to repeal by virtue of the act of land upon which the college buildings are erect- 1846, the question still remains whether the ed. The question to be decided is whether the former statute constituted an irrepealable conproperty involved is exempt from taxation by tract. We are unable to give it that effect. virtue of the supplement to the act under which There is nothing in the language or terms of the the appellant was incorporated. The purpose of act itself from which a binding contract may be that supplement was manifestly to grant such implied. At the time of its passage the beneexemption. It is settled, however, that under ficiary of the act had been in existence for sevthe amendatory provision of the Constitution eral years, had purchased lands, erected buildadopted in 1875, requiring property to be as- ings, and was carrying out the purpose of its sessed for taxes "under general laws and by incorporation. Conceding that its work was uniform rules, according to its true value," charitable, and that the Legislature might there can be no exemption of property from tax-deem the continuance of such work a sufficient ation by force of special or local statutes, ex- consideration for a contract of exemption from cept in the case of contracts which the amend- taxation, there is nothing to show that there ment of the organic law could not reach. Sis- was any prospect or likelihood of a discontinters of Charity v. Township of Chatham, 52 uance of such work if the Legislature should N. J. Law, 373, 20 Atl. 292, 9 L. R. A. 198. fail to grant tax immunity. The passage of The effect of the general tax act of 1903 was to the exempting act imposed no new burden or obrepeal all exemptions except those expressly al- ligation upon the beneficiary, and it conferred lowed by that act, as far as the Legislature had no new benefit upon the state. True, the extenthe power to do so. Hanover Township v. sion of the field of its operations by the appelCamp Meeting Ass'n, 76 N. J. Law, 65, 68 Atl. lant in consequence of its freedom from taxation 753. It follows, therefore, that the exemption might increase the extent of its benefits to soclaimed on this appeal has been annulled both ciety, as an educational institution, but any by force of the constitutional amendment of such extension was purely voluntary, and was 1875 and the operation of the act of 1903, un- in no case a condition to the enjoyment of the less the supplement granting the exemption con- tax exemption." In the case of Mount Pleasant stitutes an irrevocable contract between the Cemetery Co. v. Newark, 52 N. J. Law, 539, state and the appellant. That the Legislature 20 Atl. 832, cited in appellant's brief, the Chief may enter into an irrevocable contract as to tax- Justice, speaking for the Court of Errors and ation with a private corporation, which is not Appeals, said: "It must certainly be conceded subject to alteration by a subsequent Legisla- that if an exemption from any public burthen ture by virtue of the right reserved in the act be made as a mere privilege, it may at any time of 1846, which is now section 4 of the Corpora- be revoked; such a concession would be purely tion Act (P. L. 1896, p. 277), is pointed out by nudum pactum, and as such would not be legalMr. Justice Swayze in the Hanover Township ly binding." In our opinion, the exempting Case. He cites the authorities establishing that act relied upon by the appellant in the case unrule, and adds that "the question which arises der review in no case purported an intention to is whether in any particular case the exemp- impose upon the state an irrepealable contractution, total or partial, is a mere gratuity, or al obligation, but was a gratuitous privilege whether the elements of a binding contract are extended by the public to the corporation, and present. If the exemption is a mere gratuity, was subject to revocation. That being our view, it is subject to repeal." If the act of the Leg- it necessarily follows that we must sustain the

We concur in the opinion of the Supreme feasible, and therefore no cause of action Court, which adopted the opinion of the was stated in the plaintiff's complaint. The board of equalization of taxes, and the judg-question of law thus presented was disposed ment appealed from will be affirmed, for the of under rule 40 of the Supreme Court by reasons stated in the board's opinion.

(86 N. J. L. 276)

BRAZZALLE v. DIEHM.

striking out the complaint, and, such decision being decisive of the whole case, judgment final was entered, and plaintiff appeals.

The only question argued relates to the estate vested in the widow and the two chil

(Court of Errors and Appeals of New Jersey. dren at the time of their conveyance to the

June 15, 1914.)

(Syllabus by the Court.)

defendant. The gift to John and Margaret vested at the death of testator subject to de

WILLS ($ 742*)-CONVEYANCES BY DEVISEE-feasance in the event of death without lawCONSTRUCTION-INTEREST CONVEYED.

A testator devised a life estate in lands to his widow, and after her death to his two children, and, if one should die without lawful issue, then his or her share should go to the other, but, if both should die, then to another daughter. The latter died in the lifetime of the life tenant, and her heirs conveyed her interest in the land to the widow and the two children. who together subsequently conveyed the land by a deed with full covenants. Held, that the latter conveyance passed an indefeasible title in fee simple.

[Ed. Note.-For other cases, see Wills, Cent. Dig. §§ 1900-1906; Dec. Dig. § 742.*]

Appeal from Circuit Court, Hudson County. Action by Lucy Brazzalle against Louis Diehm. Judgment for defendant, and plaintiff appeals. Affirmed.

McDermott & Enright, of Jersey City, for appellant. James C. Agnew, of Town of Union, for appellee.

ful issue, with right of survivorship if one should die without issue, and also to the life estate of the widow. Whether the survivor takes the share of the other child absolutely is not necessary to be decided in this case because, if absolute, it would pass by their deed to the defendant.

Under this will, if Margaret had issue, her

title became indefeasible, and her deed would convey an absolute estate, but, if she should die without leaving issue, her estate would go to John, notwithstanding any conveyance she might have made, and the converse of this proposition would be true if applied to John, and, if both die without the happening of the contingency, the title would pass to Elsie, unless the contention of the apDellant, to be hereafter dealt with, be sound. The situation is substantially the same as it would be if the testator had given a vested estate in fee simple to one, subject to its divesting upon the happening of the contingen

BERGEN, J. By his last will and testament, John Masker devised the residue of his estate to his widow for life and after her de-cy, death without issue, in which event the cease to John and Margaret Masker, two of his children, "their heirs and assigns forever," but, if his widow should remarry, "then her right to my estate shall cease and only to be entitled to her right of dower in my real estate." The will further provided that, if John or Margaret "should die without lawful issue, then his or her share should go to the other one, but if both should die, then to my first named daughter, Elsie Jane Boman." Elsie died intestate after the testator, and thereafter her only heirs at law conveyed to testator's widow and the two children, John and Margaret, all their estate in the lands involved in this controversy, whether vested, contingent, or expectant, and subsequently the widow, John, and Margaret conveyed the land to the defendant, who in turn conveyed to plaintiff by deed containing full covenants of seisin and warranty.

estate would vest in Elsie, a condition similar to that in Dilts v. Clayhaunce, 70 N. J. Eq. 10, 62 Atl. 672, where it was held by Chancellor Magie that such an estate as Elsie would take, on the happening of the contingency, was not a contingent remainder, but a provision in her favor in the nature of an executory devise. Such executory interest in lands may be conveyed (2 Comp. St. 1910, p. 1539, § 19), "although the contingency on which such right, estate or interest are to vest may not have happened,” and under this statute Elsie could in her lifetime have conveyed her executory interest subject to the contingency that John or Margaret leave issue. Wilkinson v. Sherman, 45 N. J. Eq. 413, 18 Atl. 228, affirmed in this court 47 N. J. Eq. 324, 21 Atl. 955.

In the will under consideration there is no gift by implication or otherwise to the issue of John or Margaret. The gift is to them, their heirs and assigns forever, subject to a defeasance if they should die without lawful issue, which means death in the lifetime of the life tenant without lawful issue; the words "without lawful issue" to be read without leaving lawful issue. 4 Comp. St. 1910, p. 5870, § 27, of our statute concerning wills. If either John or Margaret should die leaving lawful issue, their defeasible estates

The appellant, claiming that the estate of the grantors of the defendant was, under the will of the testator, defeasible under certain contingencies contained in the will, and therefore not capable of being conveyed, brought this suit to recover damages for breach of the covenants contained in defendant's deed to her. The defendant answered. admitting the facts stated, but claimed that the estate conveyed was a fee simple inde