upon creditors, and rendered judgment for [ void ab initio "as against the creditors of the the defendant. seller." Section 1. Argued November term, 1913, before GARRISON, TRENCHARD, and MINTURN, JJ. | Haight & Autenreith, of Jersey City, for appellant. Hartshorne, Insley & Leake, of Jersey City, for appellee. [3] The trial court, upon a contest involving the plaintiff's title and right to possession which were clearly in issue (Bierman v. Reinhorn, 71 N. J. Law, 422, 58 Atl. 1983; Du plessis v. Moine, 87 Atl. 111; Petchenik v. Rich, 87 Atl. 98), held that, by reason of the existence of the fraud contemplated by the statute, the plaintiff had not acquired title. This finding quite manifestly upheld the validity of defendant's levy under the writ of attachment, and warranted the entry of this judgment. The objections raised to the rulings of the trial court require only the comment that they were, in effect, unprejudicial to the plaintiff's case. The judgment will be affirmed with costs. (83 N. J. Eq. 140) FIRE ASS'N OF PHILADELPHIA v. WELLS. (Court of Chancery of New Jersey. March 26, 1914.) 1. INSURANCE (§ 606*)-PAYMENT OF LossRIGHT TO SUBROGATION. MINTURN, J. (after stating the facts as above). [1] The district court upon a basis of fact, furnished by the testimony, found that the sale in bulk in this case, to Jaeger, was void, as having been made fraudulently in contravention of the provisions of the socalled Sales in Bulk Act (Laws 1907, p. 570). We think the testimony was ample to warrant the finding. There is nothing in the testimony from which we can reasonably infer that either the plaintiff or his vendor, Jaeger, made the slightest pretext to comply with the provisions of that act. Their failure to do so is defended upon the ground, inter alia, that the act is unconstitutional, as contravening the 14th amendment of the federal Constitution. Substantially similar statutes in other jurisdictions have been held to be constitutional. Thorpe v. Penrock Co., 99 Minn. 22, 108 N. W. 940, 9 Ann. Cas. 229; Williams v. Wichita Bank, 15 Okl. 477, 82 Pac. 496, 2 L. R. A. (N. S.) 334, 6 Ann. Cas. 970; Squire v. Tellier, 185 Mass. 18, 69 N. E. 312, 102 Am. St. Rep. 322; Neas v. Borches, 109 Tenn. 398, 71 S. W. 50, 97 Am. St. Rep. 851. The United States Supreme Court in Kidd & Co. v. Musselman Co., 217 U. S. 461, 30 Sup. Ct. 606, 54 L. Ed. 839, upheld the constitutionalDefendant's property, which was insured by complainant, was fired by the negligence of ity of the Michigan act which had been sus- a railroad company. After complainant made tained in that jurisdiction. Spurr v. Travis, payment to the amount of the policy and re145 Mich. 721, 108 N. W. 1090, 116 Am. St. ceived a written receipt declaring that it should Rep. 330, 9 Ann. Cas. 250. The general au- tled with the railroad company, executing it a be subrogated to that amount, defendant setthority and policy of legislative regulation of release of all claims. Held, that as defendant this character is vindicated upon the theory settled the claim without complainant's knowlof the police power for the suppression of edge, and did not notify it of the giving of a release which was a prima facie bar, complainfraud, and the protection of legitimate busi-ant is entitled to hold defendant as trustee for Lemieux v. Young, 211 U. S. 489, 29 the amount of the loss which it paid. ness. casioned by the negligence of a railroad comWhere an insurer pays for loss by fire ocpany, it becomes entitled to subrogation against the railroad company by operation of law, and a subrogation receipt or other agreement is un[Ed. Note.-For other cases, see Insurance, Cent. Dig. 88 1504-1511, 1514-1516; Dec. Dig. § 606.*] necessary. 2. INSURANCE (§ 606*) — PAYMENT OF LOSS — SUBROGATION-EFFECT OF SETTLEMENT. § 606.*] Bill by the Fire Association of Philadelphia against Thomas Wells. Decree for complainant. [Ed. Note. For other cases, see Insurance, The plaintiff's title depends upon the valid-Cent. Dig. §§ 1504-1511, 1514-1516; Dec. Dig. ity of his vendor's title. If that was void by reason of the application of the sales act to the facts, the plaintiff's title necessarily falls. His contention that the defendant is not a creditor, within the meaning of the act, Defendant was the owner of certain buildis unsubstantial. ings and their contents, which have been [4] Defendant, as a properly authorized of- totally destroyed by fire caused by the negficer of the law, represents a judgment cred-ligence of a railroad company. The builditor upon a writ of attachment, and for this ings were protected by fire insurance written purpose the creditor acts through him. Qui facit per alium facit per se. by complainant company to the amount of $2,000. After the fire complainant company [2] Equally unsubstantial is the contention paid the $2,000 insurance to defendant, and that the defendant cannot raise the question received from defendant a receipt for the of title in this proceeding, but must attack money, in which receipt defendant formally the sale by a direct proceeding for the pur- assigned to complainant his claim against pose of invalidating it. The general policy the railroad company to that amount. Thereand purpose of the act, upon proof of the after defendant, without the knowledge of facts, is to render the alleged sale null and complainant, made a settlement with the railroad company, whereby he received from had been theretofore paid to him, he in fact that company $5,000 and executed a general release, discharging the railroad company from all liability by reason of the fire. Complainant now seeks to recover from defendant its loss of $2,000. By way of defense defendant claims that, when he accepted the insurance money and executed the subrogation receipt in behalf of complainant, he was informed by the agent who paid him the money that he would be privileged to settle with the railroad company for the balance of his loss, and also claims that in making his settlement with the railroad company he settled for only the balance of his loss, and at that time apprised the railroad company of the fact that he had received the $2,000 insurance money, and had executed a subrogation receipt to complainant insurance company for that amount. Thompson & Smathers, of Atlantic City, for complainant. Wescott & Weaver, of Cam den, for defendant. LEAMING, V. C. (after stating the facts as above). [1] It was complainant's right and privilege to pay to defendant the amount of the insurance, and by that payment to become subrogated to defendant's claim against the railroad company to the extent of the amount paid. No "subrogation receipt" or other receipt or agreement was necessary; subrogation arose from the act of payment, and not from the convention. Monmouth Co. Fire Ins. Co. v. Hutchinson, 21 N. J. Eq. (6 C. E. Gr.) 107; Weber v. Morris & Essex R. R. Co., 35 N. J. Law (6 Vr.) 409, 413, 10 Am. Rep. 253; Sheldon on Subrogation, § 6. But a writing was executed. That writing was signed by defendant, and formally acknowledged by him before a notary public. It sets forth the payment of the insurance money, and assigns to complainant defendant's claim against the railroad company to the amount of the payment. The receipt does no more than state the exact conditions which would have existed by operation of law without a receipt. Defendant claims that he was induced to accept the insurance money and sign the receipt by a statement of the insurance agent | that the payment and receipt would not, in any way, interfere with defendant collecting the balance of his loss from the railroad company. The writing which was executed is silent touching any such privilege to be extended to defendant, and the agent denies that any such statement was made. But the views which I entertain render it wholly immaterial whether any such statement was made or not. [2] While defendant claims to have made settlement with the railroad company for only the balance of his claim, and claims to have fully apprised the railroad company of In executed to the railroad company a written general release of liability from all claims resulting from the fire; in order to procure his own money he consented to formally release the railroad company from its liability to complainant, and did this without the knowledge or consent of complainant. making that settlement and in executing that instrument defendant was not acting in ignorance of his rights and duties in the slightest degree; the settlement was made under the immediate direction of his counsel. Touching that settlement, his counsel has testified as follows: "He [defendant] came to my office for the purpose of getting me to go with m to the railroad company. I went. It was stated on that occasion to the railroad's agents, Mr. Brister, their general agent, being present, and one or two others, that Mr. Wells [defendant] had accepted $2,000 from the insurance company, and that he had signed subrogation receipts. It was then stated by me to the railroad company what Mr. Wells has testified to here before this court; it was further stated by me to the railroad company that they were running some risk of a lawsuit in this matter, to which Mr. Brister replied he would take the responsibility of that and take care of it." Under these circumstances, and with full appreciation of the fact that complainant was the equitable owner of a part of his claim against the railroad company, defendant executed a formal instrument, releasing the railroad company from all liability for the losses occasioned by the fire, and now seeks to repudiate the terms and appropriate effect of his own deliberative written instrument, and to hold against the terms of his own declarations by the claim that he informed the railroad company that he had assigned a part of his claim to complainant, and in fact made settlement of the balance only. It must be assumed that, under the circumstances narrated, some purpose existed for the execution of an instrument which in terms released complainant's claim, for, as already stated, defendant knew that he had no right to release complainant's claim without first receiving from the railroad company, for complainant,' complainant's money; whatever that purpose may have been, the legal effect of the act was to place in the hands of the railroad company an instrument which was operative as a bar to complainant's recovery of its claim against the railroad company unless complainant should be able to establish as a fact, to the satisfaction of a jury in an action against the railroad company, that prior to the execution of that instrument the railroad company had been apprised of complainant's rights. It thus appears that defendant not only had no right to execute the release of complainant's claim, but necessarily knew that he had no such right, and, under the circumstances L. p. 363) § 4, since there was no representative Cent. Dig. §§ 556-560; Dec. Dig. § 129.*] The maxim that he who comes into equity EVI mony of his counsel, necessarily knew that the release which he executed was operative as a prima facie bar to complainant's right of recovery against the railroad company. It may well be doubted whether a person who has sustained a loss, and who holds partial indemnity from a company who is entitled to be subrogated to the amount of the indemnity, is privileged, as against the indemnifying company, to make a compromise settlement with a company who is primarily liable for the whole loss, without the knowledge or co-operation of the indemnifying company. Commercial Union Assurance Co. v. Lister, L. R. 9 Chancery Appeal Cases, 3. TRUSTS ($ 89*)-RESULTING TRUST DENCE TO ESTABLISH TRUST-SUFFICIENCY. 483. But it is entirely clear that the owner In a suit for partition, by heirs of a wife, of the legal title to the two concurrent of land alleged to belong to her, and which the claims, in making such settlement without husband claimed under a resulting trust, evithe knowledge or co-operation of the indem-dence held to show that the husband furnished all the purchase money. nifying company, whether the settlement [Ed. Note.-For other cases, see Trusts, Cent. should be of the whole claim or only of that Dig. §§ 134-137; Dec. Dig. § 89.*] part in excess of the amount of the indem-4. TRUSTS (§ 86*)-RESULTING TRUST — PAYnity, assumes the burden of equitable duties to the indemnifying company, which are at least coextensive with all rights which the Though, where a husband furnishes the indemnifying company could assert or pre-purchase money for land conveyed to his wife. serve if present and participating in the settlement. In such circumstances the execution of a release of complainant's claim was not only a breach of the trust assumed and a substantial injury to the enforcement of complainant's rights, but plainly imposed upon defendant a further duty to apprise complainant of his acts in the premises, to the end that the prima facie bar to complainant's recovery which he had wrongfully created could be removed. That duty was not performed, and the statute has now run. In executing the general release under the circumstances stated, defendant has equitably denied himself the defense that he settled for only the balance of his loss. MENT OF CONSIDERATION FOR CONVEYANCE the presumption is that it was intended as a gift, and hence no trust results, yet the presumption may be rebutted. [Ed. Note.-For other cases, see Trusts, Cent. Dig. § 128; Dec. Dig. § 86.*] EVI 5. TRUSTS ($ 89*)-RESULTING TRUST a gift, and hence a trust resulted. Bill by James S. Shotwell and others, against John A. Stickle and others. Bill dis missed, and decree rendered for defendants. On final hearing on bill, answer, cross-bill, replication, and proofs. I am convinced that defendant's conduct in making settlement with the railroad company without the knowledge or co-operation This suit is brought for the partition of a of complainant, and in executing a general release to the railroad company in consid- farm near Johnsonsburg, in Warren county, eration of the money by him received at that formerly owned by one Isaac Stickle, who settlement without apprising complainant of died in the month of May, 1900. He left a the facts which he now asserts, is operative will, by which, among other things, he apto render him presently liable to complain-pointed his three sons, Joseph P. Stickle, ant in this suit for that part of the loss paid by complainant. I will advise a decree to that effect. (83 N. J. Eq. 188) SHOTWELL et al. v. STICKLE et al. (Court of Chancery of New Jersey. March 24, 1914.) 1. WITNESSES (§ 129*)-COMPETENCY-TRANSACTIONS WITH DECEASED PERSONS. Where, in a suit by the heirs of a wife to partition land, the husband answered and claimed the land under a resulting trust because he had furnished the purchase money, the husband was not incompetent to testify as to statements by, and transactions with, the deceased wife, under the evidence act of March 23, 1900 (P. Philip Stickle, and John A. Stickle, as executors thereof. He gave them power to make sale of his real estate, directing that such sale should be public, and should be advertised in the same manner as is required by law for sale of lands by order of any court. In pursuance of this direction, the executors advertised the premises for sale in December, 1900, in the manner prescribed by the will, but were unable to procure any bids. An agreement was subsequently reached that John A. Stickle, one of the executors, should purchase the property for the sum of $7,000, which agreement was reduced to writing, and was executed on March 6, 1901. It provided that the said John A. Stickle should pay to him in the aggregate over $5,000, and that he made other improvements on the farm sufficient to bring up his total expenditure for betterments to the sum of $6,000; that he paid the taxes, averaging $90 per annum, the insurance premiums, the interest on the dower mortgage to Mrs. Lang; and, that during the whole period of his possession, he conducted the business of farming on the said premises at his own expense, for his own ac own; that his wife not only contributed nothing to the purchase money, but that she had a separate estate of only about $1,600, no part of which he ever received, which was always invested by her for her own benefit and in her own way. the executors of the will of Isaac Stickle the erected a new house and barn upon the premsum of $5,475.91, and assume a dower mort-ises, and repaired other buildings, which cost gage on the premises for the principal sum of $1,524.09; that the executors should advertise the farm at public auction for as soon a day as possible, and that at the sale the farm should be sold to such person as the said John A. Stickle should designate, at whatever price or amount the same should be bid up to, and, upon the delivery of the deed, the said John A. Stickle bound himself to pay the said sum of money, which was to be regarded as the purchase price, notwith-count, and took the proceeds thereof as his standing the sum or amount for which the said farm should be struck off and sold. Two of the executors, Joseph P. Stickle and Philip Stickle, covenanted that they would advertise the farm and sell the same to John A. Stickle for the sum above mentioned, and deliver to him, or to such person as he might designate, a good and sufficient deed for the price aforesaid, notwithstanding the sum or price at which the farm might be struck off at the sale. It was further provided that the share of John A. Stickle in his father's estate should be taken as a payment on account of the purchase money, and that, in case he neglected or refused to receive the deed and pay the purchase money, his said share should be forfeited to the executors; that the sale should be advertised for April 13, 1901; and the deed be delivered at the office of George A. Angle, at Belvidere, on Saturday, April 20, 1901. At the time of the death of Mrs. Stickle, she left no children. However, a child was born to them on September 21, 1891. The defendant John A. Stickle says that this child was born alive. This is denied by the complainants and the other defendants, who allege that the child was born dead, and that no rights whatever can be predicated on this event. It likewise appears, and is undisputed, that John A. Stickle, subsequently to the death of his wife, purchased the interests of James I. Shotwell and Dellie Shotwell, a brother and sister of Mrs. Stickle, for the sum of $2.200. The questions arising are whether John A. Stickle paid all the purchase money for the said premises, whether the circumstances show that a trust resulted from the wife to him, growing out of the payment of such purchase money, and whether, in case a resulting trust is not so found, the said John A. Stickle, by virtue of his marriage, the seisin of the wife of the lands in question, and the birth of a child alive had conferred upon him a right of curtesy in the said lands. Thomas M. Kays and Henry Huston, both of Newton, for complainants. George M. Shipman and William H. Morrow, both of Belvidere, for defendants. The farm was advertised for sale as agreed. It was purchased in the name of Martha Stickle, the wife of John A. Stickle, and the deed was delivered at the office of Mr. Angle on April 20th following. The deed was taken by John A. Stickle to the office of the county clerk, and left there for record, he paying the clerk's fee therefor. At this time John A. Stickle and his wife were living on the farm in question as tenants of the father's estate. After the delivery of the deed, they returned home, continued their occupation of the premises until the death of Martha Stickle, which occurred on May 15, 1909. During all this period, the title to the farm remained in Martha Stickle, and she died without having made conveyance there- HOWELL, V. C. (after stating the facts of to any one. She left as her heirs at law as above). [1] Before reaching the merits the persons named in that behalf in the bill of the controversy, it is necessary to deterof complaint, among the others, her brothers, mine a preliminary question relating to the James S. Shotwell and Ivan Shotwell, the admissibility of certain evidence which was complainants in this suit, who filed their bill offered on the part of the defendant John A. for the purpose of obtaining partition of the Stickle. The offer was to introduce by him said lands among the heirs at law of the said statements made by, and transactions had Martha Stickle. with, Martha Stickle, his wife. This offer John A. Stickle, her husband, alleges in was objected to, upon the ground that its his answer and in his cross-bill that, at the reception would be a violation of the fourth time of the sale of the farm and the delivery section of the evidence act of March 23, of the deed, he paid all the purchase money 1900 (P. L. p. 363), for the reason that the out of his own funds, and that his wife heirs at law of Martha Stickle were her agreed that she would make a deed to him representatives in the suit, within the meanat any time when he might request it, or ing of the statute. The evidence offered when it was convenient for the parties to was received subject to be stricken out if cepted their respective shares of the purchase money. This is a condonation of the maxim of equity appealed to, and estops them from obtaining any decree adverse to the transaction; but the maxim does not reach so far. It must be understood to refer to willful misconduct in regard to the matter in litigation, and not to misconduct, however gross, which is unconnected therewith, and with which the opposite party in the cause has no concern. 1 Pom. Eq. Jur. § 399; Smith Man. of Eq. § 39; Williamson v. Fowkes, 9 Hare, 592; Gibson v. Goldsmid, 5 D. G., M. & G. 757. It is obvious that the cause of action to which that maxim might apply is a cause of action in favor of the Stickle heirs and devisees, and not a cause of action which relates to the estate of which Martha Stickle died seised; hence the maxim has no application to the case in hand. that it was incompetent. Upon consideration own sale. Smith v. Drake, 23 N. J. Eq. 302, of the circumstances, and the examination Marr v. Marr, 73 N. J. Eq. 643, 70 Atl. 375, of the authorities, I have reached the con- 133 Am. St. Rep. 742. But it will be observclusion that the evidence was properly ad-ed that this is not a proceeding on behalf of mitted, and I reach this conclusion upon the the devisees under the will of Isaac Stickle, ground that there is no representative rela- but is an entirely separate and distinct tion in the case which can be held to bring cause of action. Possibly the heirs of Isaac it within the statute. The parties here rep-Stickle might have set aside the transaction, resent no one; they are each and all litigat- but it appears by the evidence that they ing concerning his and their own individual | knew all about it, acquiesced in it, and acrights; what they shall take by the final decree they will take, not as anybody's representatives, but for themselves individually, and in their own right. Such was the holding of the Court of Errors and Appeals in Smith v. Smith, 52 N. J. Law, 207, 19 Atl. 255, which was an action for dower brought by the widow against the lessees and devisees of the husband; and in McKinley v. Coe, 66 N. J. Eq. 70, 57 Atl. 1030, which was an application by the payee of a note given by the testatrix, whose will charged her debts on her lands for a direction that the proceeds of sale of land sold in partition proceedings should be applied to the payment of her note; followed in Cowdrey v. Cowdrey, 71 N. J. Eq. 353, 64 Atl. 98, the latter case having been affirmed on appeal in 72 N. J. Eq. 951, 67 Atl. 111, 12 L. R. A. (N. S.) 1176. The precise question was decided by Vice Chancellor Emery in the case of Small v. Pryor, 69 N. J. Eq. 606, 61 Atl. 564, a case in which the circumstances closely resemble those before the court in the case at bar. There the complainant filed a bill for parti- | tion. The widow of the decedent filed a cross-bill, claiming the property under a resulting trust, on the ground that, although she had furnished the purchase price, the title was taken in the name of her husband. The evidence of the widow to show the circumstances was admitted upon the authority of the cases above cited. It was held, however, that the weight of the evidence was insufficient to establish the trust. I therefore conclude that the testimony in this case was properly admitted, and the motion to strike the same from the record is denied. [2] There is yet another matter to be examined before we reach the merits. The objection is made that John A. Stickle ought not to receive any relief from this court, because he has come into court with unclean hands; that is to say, that, by making the agreement of March 6, 1901, with his brothers and coexecutors, Joseph P. Stickle and Philip Stickle, touching the disposition of the lands of which his father died seised, he committed a fraud upon his brothers and sisters, and that this was intensified by the provision in the agreement that he should only pay $7,000 for the farm, no matter what the highest bid was. It may well be that, under certain circumstances, he might have been called to account for these irregular transactions; the principle being that no [3] The first question pertaining to the merits of the controversy is whether John A. Stickle paid to his brothers all the purchase money for the said premises. Deducting the dower mortgage, $1,524.09, there remained to be paid $5,475.91. This was done in the following manner: There was first the check of Mrs. Stickle for $4,375.91; check for milk which Mr. Stickle carried with him for $155.34; his interest in his father's estate, $949.44. This left him short, as his story is, $49.54, which amount was advanced by his brother Philip, to whom he afterwards repaid the amount. These figures overrun the amount of the payment, and the discrepancy is not explained, but, while they do not exactly coincide, I am satisfied that the payment was made substantially in the way just mentioned. I am likewise satisfied that the money for which Mrs. Stickle gave her check, viz., $4,375.91, was wholly the money of John A. Stickle. It was made up in this manner: He had on deposit in the Merchants' National Bank of Newton $1,209.94; he sold a mortgage which he held on the Andover Methodist Church for $1,872: he collected from Frank Carr $420; borrowed from Isaac Carr $400, and from his wife $60; deposited check for $155.34; had his note discounted at the bank, and obtained as proceeds $258.63. This money was transferred to the credit of Mrs. Stickle, and her check was thereupon drawn against it. It seems very clear that the whole fund was provided by John A. Stickle, and that his |