ment of the insurance money to the judgment debtor or any other person, and to this end the insurance company is made a defendant. Separate demurrers, for multifariousness only, have been filed by the defendants John O'Shaughnessy, the judgment debtor, Oury, Bridget O'Shaughnessy, and the insurance company, together with its officers. The ground relied on by counsel for demurrants is that each of the separate demurrants had no connection with the case against the other defendants, and should not be put to the burden of a defense against these claims. But while, as to defendants other than the judgment debtor, this want of connection with portions of the whole case as presented by the bill may exist, yet the settled rule of this court in relation to bills of this character Is that they are not, on that account alone, multifarious. Creditors' bills of this class are considered to present the single object of enabling the complainant to obtain satisfaction of his judgment at law out of the judgment debtor's property, and the equitable jurisdiction of the bill is based on this object. Inasmuch as the object of the bill and the relief prayed are the satisfaction of the judgment, and this may be decreed out of any property of the debtor, which is properly reached by the aid of this court, the complainant, in his bill filed for this general purpose, is not restricted to relief against a single class of property, alleged to belong to the debtor, and he may follow in one bill separate properties of the debtor in the hands of separate defendants. This rule in relation to creditors' bills was settled by Chancellor Green in Way v. Bragaw (1863) 16 N. J. Eq. 213. In that case real estate of the judgment debtor was alleged to be fraudulently conveyed to one defendant, personal estate to have been similarly conveyed to another defendant, and certain equitable interests and property not to be reached by execution at law were also sought to be applied. A demurrer for multifariousness on the ground of the separate interests of defendants in the property sought to be reached was overruled. This rule was followed on this point in a similar case (Randolph v. Daly [1863] 16 N. J. Eq. 313), Chancellor Green saying (page 315): "It is well settled that on a bill to set aside fraudulent conveyances made by a debtor, and for a discovery of his property, it is no objection that a defendant to whom a portion of the property has been conveyed has no connection with other fraudulent transactions of the debtor. The case against the debtor is entire. If the defendant is a necessary party to some part of the case as stated, he cannot object that he has no interest in other transactions which constitute a part of the entire case." These cases have not been since questioned, and they control the present case on the point now involved. I have examined all of the cases referred to by the demurrants' counsel, and find nothing in them to qualify or control the doctrine of

these cases, nor do I think that the present case is distinguishable.

The distinction mainly insisted on is that the fraudulent transactions alleged in regard to the real estate occurred before 1889, and that those relating to the personal estate occurred in 1897. But this only relates to the degree or marked character of the separation between the two classes of property and of the claims against the separate owners, and manifestly does not prevent the operation of the rule settled by the above cases, that claims against persons in fact owning separate properties by separate fraudulent transactions may be united in bills of this character. And so far as Oury, the claimant of a lien on the personal property, and Bridget O'Shaughnessy, the claimant of the real estate, are concerned, it must also be observed that they are properly joined for another reason, pointed out in Way v. Bragaw, supra (page 216), viz. that their separate titles are connected not only in their operation against the complainant's remedy at law, but in the relief to be administered, inasmuch as, on a decree in favor of complainant against both, the real estate can only be sold to pay the balance remaining due after the application of the personal estate to the complainant's claim. The insurance company is a necessary party to the relief prayed by way of reaching the insurance moneys in their hands as equitable assets, and for the purpose of restraining payment to the judgment debtor pending the suit. They may, by petition for payment into court, be relieved from further prosecution. Meyers v. Schuman (N. J. Ch.; Green, V. C., March, 1895) 31 Atl. 460, 461. The demurrers are therefore overruled, with costs, and an injunction under the rule to show cause will be advised.

COOPER v. HAWLEY. (Court of Errors and Appeals of New Jersey. Dec. 10, 1897.)

BUILDING CONTRACT-CONSTRUCTION-EXTRAS. A building contract contained, among others, these provisions: "Third. Should the owner at any time during the progress of said building request any alterations, deviations, ad litions, or omissions from the said contract, she shall be at liberty to do so; and the same shall in no way affect or make void the contract, but will be added or deducted from the amount of the contract, as the case may be, by a fair and reasonable valuation. ** * Fifth. * * Should any dispute arise respecting the true value of the extra work or of the works omitted, the same shall be valued by two competent persons,-one employed by the owner, and the other by the contractor; and those two shall have power to name an umpire, whose decision shall be binding on all parties. * *Seventh. No alterations or extra work shall be done without a written order from the architect, and an express agreement in writing as to the cost." Held, that the prohibition of the seventh clause extended only to orders of the architect, and had no relation to the other clauses.

**

Depue, Gummere, Bogert, and Nixon, JJ., dissenting.

(Syllabus by the Court.)

Error to supreme court.

Action by Ira E. Hawley against Hattie E. Cooper to recover on a contract. From a judgment for plaintiff, defendant brings error. Affirmed.

The parties agreed, under seal, that Hawley should erect a building on Miss Cooper's land, and that she should pay him therefor, in installments, $3,925. The work was to be done under the direction of Herman Fritz, an architect. The following provisions of the contract are pertinent to the controversy now under review: "Third. Should the owner at any time during the progress of said building request any alterations, deviations, additions, or omissions from the said contract, she shall be at liberty to do so; and the same shall in no way affect or make void the contract, but will be added or deducted from the amount of the contract, as the case may be, by a fair and reasonable valuation. Fourth. Should the contractor, at any time during the progress of such works, refuse or neglect to supply a sufficiency of materials or workmen, the owner shall have power to provide materials and workmen, after three days' notice, in writing, being given, to finish the said works, and the expense shall be deducted from the amount of the contract. Fifth. Should any dispute arise respecting the true construction or meaning of the drawings or specifications, the same shall be decided by Herman Fritz, and his decision shall be final and conclusive; but should any dispute arise respecting the true value of the extra work, or of the works omitted, the same shall be valued by two competent persons,-one employed by the owner, and the other by the contractor; and those two shall have power to name an umpire, whose decision shall be binding on all parties. Seventh. No alterations or extra work shall be done without a written order from the architect, and an express agreement in writing as to the cost." Four months after the time fixed by the contract for its completion, the building was still unfinished, and the owner, on three days' notice, discharged the contractor and caused it to be finished by others. The contractor brought suit in the circuit court of the county of Essex for $2,275, the amount of the unpaid installments of the contract price, and $96.29, the cost of a few extras. In defense, the owner claimed that the work done by the contractor varied so greatly from the specifications as to defeat any recovery, and, by way of recoupment and set-off, sought damages for delay and defective work, and allowance for the cost of finishing the building. At the trial, the contractor claimed modifications of the contract and other acts of the owner, justifying the delay, and asserted that his work was in substantial compliance with the contract as modified. He conceded a deduction of the estimated cost to him to finish the building, which cost he undertook to show would have been less than the cost to the

owner. The character of the work up to the time of the discharge and the propriety of such discharge were submitted to the jury, under instructions to which no exception was taken, and that seem unexceptionable. The evidence showed deviations from what was specified in the contract. These the contractor sought to vindicate by parol authority. The defense objected to any proof of alterations or extra work authorized only by parol. The trial judge, under exception, permitted such proof, but directed it to be limited to cases where the parties themselves had mutually agreed to the modifications, and, in his charge, instructed the jury as follows: "Before you can find that there was a change in the contract,-a modification of the plans,you must be satisfied that the parties to the contract-not the architect and the plaintiff, but the defendant and the plaintiff-mutually agreed to such changes." He assumed in his charge that the contract required that such an agreement should be in writing expressing the cost, and should be accompanied by a written order from the architect, but instructed the jury that those requirements might be waived, and that a waiver might be inferred from the facts and circumstances proved in the case. ception was taken.

To these instructions exThe verdict was for $1,532.35. The two exceptions recited present the only matters assigned for error in the supreme court, where the resultant judgment was affirmed. The plaint under the present writ is such affirmance.

Robert H. McCarter, for plaintiff in error. William B. Guild, for defendant in error.

COLLINS, J. (after stating the facts). The contention, unsuccessful at the trial and in the supreme court, now pressed for our decision, is that, inasmuch as the contract between the parties was under seal, it could not be altered by parol. Speaking for myself, I can see no reason why a valid contract, of whatever nature, should be denied efficacy because the parties had previously made a different contract, however solemn in form; but it is sufficient now to say that such a determination is in no way involved in an affirmance of the judgment under review. The cause was tried on the mistaken assumption of court and counsel of a correlation between the provisions of the seventh clause of the contract and those of the third and fifth clauses of that instrument. They are so discrepant as to be clearly independent provisions. Alterations, deviations, additions, or omissions requested by the owner are to be valued after the work is done. Alterations or extras ordered by the architect are conditioned on a previous agreement as to their cost. The language of the seventh clause is obscured by condensation; but, construed in the light of the other clauses, it plainly refers only to orders of the architect. An agency for an owner is readily in

ferred, in certain cases, to rest in a supervising architect. Seymour v. Dock Co., 20 N. J. Eq. 396; Bridge Co. v. McGrath, 134 U. S. 260, 10 Sup. Ct. 730. In this contract, by the seventh clause, such agency is expressed and circumscribed. The ruling, therefore, of the trial judge, was all that the plaintiff in error could ask. The unnecessary statement in the charge that the contract requirements might be waived was harmless even if incorrect.

The only other complaint urged in this court is that alterations were proved for which the only authority shown was that of the architect by parol. If this be so, it must be assumed that, under the lucid instructions of the judge, the jury treated such alterations as unauthorized. It follows that they found them to be consistent with a substantial compliance with the contract. The amount of the verdict as applied to the evidence does not indicate any disregard of the principles laid down to guide the jury. If the plaintiff in error conceived otherwise, her remedy was by motion for a new trial, not by writ of error. If it could be shown, indeed, that in no case of deviation from the contract was there evidence of the owner's concurrence, it is possible that it might be held error for the judge to have submitted the matter at all to the jury; but this is not claimed. Authority to change the stairs was admitted to have been given, and there was evidence of authority to erect the building at a higher elevation than that called for by the plans. The grievance of the plaintiff in error is thus exhibited in the brief of her counsel: "There was error in the judge's charge, in that it left it to the jury to determine whether there was any evidence of a modification of the contract, when the case displayed absolutely none whatever, except in reference to the elevation of the house. The plaintiff below did offer proof that the defendant was present and assented to such location, but there was absolutely no proof of her assent to, or knowledge of, any of the other changes of which the case is replete with examples, beyond the mere occupancy of the house by her, after discharging the contractor. The jury should have been charged that inasmuch as the case showed no evidence whatever of acceptance or waiver by the defendant of any of the provisions, that the plaintiff could not recover thereon. It was a great hardship upon the defendant to permit, under the guise of subsequently proving the defendant's assent to or ratification of the alterations and changes, evidence to be given of such changes, modifications, and alterations throughout the entire job, and then leave the case to the jury, although it was devoid of any proof whatever as to such ratification of deviation, except in reference to the variation in the elevation of the house." It appears, therefore, that the owner's authority for, at least, one deviation besides that conceded,

was fairly open to discussion. The testimony shows that this was the most important one. With the exception of the change in the stairs, passed by with the remark that authority for that was admitted, it was the only one to which the judge alluded in his charge to the jury. This court cannot be asked to scrutinize the voluminous testimony as to other deviations. We cannot know that claim of authority for any others was pressed before the jury. If so pressed without supporting proof, protection could have been afforded by appropriate requests to charge. I shall vote to affirm this judgment.

CHATTEL MORTGAGES-VALIDITY-ENFORCEMENT

DEFENSES-ESTOPPEL-EXTENT OF LIEN.

1. A chattel mortgage is good, though the affi davit is defective, as against the receiver of the mortgagor.

2. In an action to foreclose a chattel mortgage given by a corporation, and assigned to complainants, it was no defense that complainants were indebted to the company for the money with which it was to commence business.

3. A chattel mortgage by a corporation, authorized by de facto stockholders only, is good as to third persons.

4. A chattel mortgage given by a mercantile corporation was not invalidated, as to it or other creditors, by the fact that it was delivered to the attorney of the lessor of the premises in which the company did business, in pledge, to carry out an agreement by which the lien of such mortgage was to be subordinated to the lien of a new mortgage made to such landlord for rent. 5. The lien of a chattel mortgage of a retail stock of goods, at the time of enforcement, rests only on the goods in stock at the time the mortgage was executed.

6. Where sellers of mortgaged personalty covenant "to warrant and defend the sale against all and every person whatsoever," and the mort gage is subsequently assigned to them, they are estopped to enforce it.

Action by Elizabeth Kane and Margaret Dorian against Daniel Lodor, receiver, etc., to foreclose a chattel mortgage. Judgment for defendant.

This bill is filed to foreclose a chattel mortgage. The order of events relating to the creation of this instrument, its ownership by the present complainants, and the status of the present defendant, is this: A number of years since, Patrick McGinley, Peter Kane, and Elizabeth Donahue were conducting a dry-goods business in Trenton under the name of McGinley & Co. While still in business under the name of McGinley & Co., that firm gave a chattel mortgage to Hood, Foulk rode & Co., to secure the sum of $4,200. It gave another chattel mortgage to Crissman Bros., to secure $13,530.26; still another chattel mortgage to Mr. Vroome, to secure $500; still another to Mr. Holt, to secure $600; and

another to Cook Bros., to secure $2,000, which they owed for rent of the business premises. Besides these mortgages, there were two judgments against McGinley & Co.,-one for $363.72, and another for $93.30.. On March 18, 1895, the Capital Dry-Goods Company was organized. This company was formed by Edward Kelly, Patrick McGinley, and Peter Kane. Mr. Kelly, for his interest in the new company, took 118 of the 120 shares; 1 each of the 2 remaining shares being held by McGinley and Kane. The capital stock of the company was stated in its certificate of incorporation to be $25,000, and the amount with which they would commence business was stated to be $6,000. The property with which they actually commenced busiпess had its origin in this way: Besides the mortgages upon the stock of McGinley & Co., as I have already remarked, there were two judgments, amounting to about $457. Executions were issued upon these judgments, and under these writs the equity of redemption of McGinley & Co. in the stock of goods was sold, and was bought in by Mr. Holt, who was at that time the attorney of McGinley & Co., for the sum of $50. Mr. Holt sold this right to Edward Kelly, the father of Mrs. Kane (the wife of Peter Kane), for the sum of $200. Then, as already remarked, the Capital Dry-Goods Company was organized; and Edward Kelly sold his interest to the company for the expressed consideration of $1, and other good and valuable considerations. What he got was the 118 shares of stock in the new company. So, when the Capital Dry-Goods Company commenced business, its capital really consisted of the equity in the goods covered by the various mortgages, which equity had been bought for $50, and conveyed to the newfledged corporation. After the organization of the corporation, it substituted its own mortgages for the mortgages made by McGinley & Co. It gave on August 19, 1895, a mortgage for $4,000 to Hood, Foulkrode & Co., one for $600 to Mr. Vroome, and one for $600 to Mr. Holt. Before the close of the year the Capital Dry-Goods Company was transformed into the Trenton Dry-Goods Company, the insolvent corporation whose receiver is the present defendant. The certificate of incorporation of the last company is dated September 30, 1895. Its capital stock is stated to be $50,000; the number of shares, $2,000, of the par value of $25 each; and the amount with which the company would commence business was stated to be $3,000. The stockholders were: Patrick McGinley, 1 share; Peter Kane, 1 share; Patrick Mohan, 20 shares; Elizabeth Kane, 49 shares; and Margaret Dorian, 49 shares. The shares of Mrs. Kane and Miss Dorian appear to have been paid for in the following manner: On October 19, 1895, the Capital Dry-Goods Company, the previous company, executed a bill of sale of its goods and chattels to these ladies for the consider

ation of $3,000. On the same day, these ladies, for the same expressed consideration, sold the same chattels to the Trenton DryGoods Company. Patrick Mohan paid for his in this way: He had loaned about $800 to the Capital Dry-Goods Company, and in payment had received a lot of goods, which he stored. After the Trenton Dry-Goods Company was formed, he let the company have those goods, and received 20 shares of stock. The new corporation was practically a continuation of the business of the old company, with the same stock of goods, except so far as it had been changed by purchases and sales made during the period of time from March 18, 1895, to September 23, 1895. There was upon the property the $4,000 mortgage of Hood, Foulkrode & Co., and the Vroome and Holt mortgages; and on October 19, 1895, the company gave a mortgage to Edward G. Cook and others to secure $1,575 for rent due. The mortgage which the complainants are foreclosing is the $4,000 mortgage originally made to Hood, Foulkrode & Co. The complainants became possessed of it in this way: In the latter part of 1896, Mr. Kane approached Mr. Thomas R. Allen, and told him that Hood, Foulkrode & Co. were pressing for the payment of their mortgage, and insisted that Mr. Allen should take it; saying that he could buy it for $2,000, or a little less, and that the company would pay it off within a year. Allen bought it. On February 20, 1897, he assigned it to Elizabeth Kane and Margaret Dorian, taking seven houses,-four on Princeton avenue and three on South Broad street, subject to mortgage. The property in these houses originated, according to the testimony of Miss Dorian, in this way: McGinley, her uncle, gave her a house on Prospect street; that house was traded for stock in a shoe store; that stock was traded on August 16, 1895, for a farm; and the farm was traded for the houses conveyed to Mr. Allen.

Mr.

James L. Kelly and W. D. Holt, for complainants. J. L. Conard, for defendant.

REED, V. C. (after stating the facts). The defendant sets up, among other things, that the affidavit to the chattel mortgage is defective. But as against the receiver, who was the only party defendant, the mortgage is good without registry or affidavit. The mortgage, as against the mortgagor, was entirely efficacious as an incumbrance, and the re ceiver took his title to the property subject to all the equities to which it was subject in the hands of the debtor. This rule was asserted in respect to an assignment for the benefit of creditors in the case of Shaw v. Glen, 37 N. J. Eq. 32. A receiver, in this respect, stands upon the same footing as an assignee for the benefit of creditors. It is also set up that the complainants were indebted to the insolvent corporation in the sum of $3,000, cash, with which the corporation

was to commence business, when in fact it had nothing but the equity of redemption in the mortgaged goods, coupled with the fact that the complainants were the real stockholders, and that they did not make any cash payments. But this, if true, is no defense to the mortgage. If there is any right to assert a claim against the complainants upon this ground, it must be done by another suit. It is, again, asserted that this mortgage was executed without corporate authority and that those who executed it were not bona fide stockholders. They were, however, de facto stockholders, whose official acts were valid as to third persons. It is, again, asserted that this mortgage was delivered to the attorney of the landlord from whom it rented the premises in which it conducted its business, to be canceled. The evidence shows that the delivery was only for the purpose of putting the mortgage in pledge, to carry out an agreement by which the lien of this mortgage was to be subordinated to the lien of a new mortgage made to such landlord for rent. The transaction did not invalidate the mortgage, so far as it stood against the company or against other creditors. It is asserted that other mortgages have been made to other parties. This appears to be So. The evidence shows the existence of several other mortgages upon the property. The mortgagees are not parties to the bill, but the result of the existence of such other mortgages, if still unpaid, would be that a decree in favor of the complainants in this suit will settle nothing as against the lien of any other mortgagees. The question of priority will remain open, to be settled by another suit, or upon a proceeding taken to distribute the assets in the hands of the receiver resulting from a sale of the property already made by order of this court.

The troublesome questions in the case are two. The first rests upon the defense set up, that the goods sold by the receiver were purchased by the company after the execution of the mortgage, and are not subject to the lien of that instrument. The facts upon which this insistence rests are these: The mortgage was executed on August 19, 1895, at the time of the organization of the Capital Dry-Goods Company. The mortgage covered the goods then in possession of the company. That company went on using those goods in its business of retailing until September 30th following, when what was left of the goods passed to the Trenton Dry-Goods Company, the insolvent corporation. This corporation continued the business until December 26, 1896, when it went into the hands of a receiver. The lien of the mortgage, of course, rested at that time upon those goods only which had been in stock on August 19, 1895. Now, what remained of the original stock, after 16 months of retailing, is a question almost impossible to solve. The receiver had already sold a considerable portion of the

stock before any claim was put in by the mortgagee, and thereafter no effort was made to distinguish the old from the new stock. The stock, of course, was replenished from time to time, in the usual course of business. That some of the original stock remained at the time of the assumption of possession by the receiver, I have no doubt; but, in my judgment, the proportion in value of the oll stock to the whole stock was very small. The value of the entire stock, as shown by the inventory and by the receiver's sale, was at the time of the company's insolvency much less than the estimate put upon it by the officers of the company. In fixing upon any figure as the value of the old stock still remaining at the time of the company's insolvency, the effort would be a mere guess. Whether the complainants, who have upon them the burden of showing the extent of their lien, should have a decree at all, for any amount, is doubtful. I should be inclined, however, to make an estimate of the proportion of the proceeds to which, as against the receiver, a decree should go, if it were not for another feature of the case, which, in my judgment, precludes them from any decree. This feature consists of a collocation of facts as follows: In the bill of sale executed by the complainants to the Trenton Dry-Goods Company on October 19, 1895, there is this warranty: "We covenant and agree to warrant and defend the sale against all and every person whatsoever." This, it is perceived, was a general warranty of title. There was then outstanding this Hood. Foulkrode & Co. mortgage. On February 20, 1897, the complainants purchased this mortgage. The rule is entirely settled, in regard to sales of real estate, that, if the sale is ac companied by a general warranty of title. then any title afterwards acquired by the grantor passes directly to the grantee. The rule rests upon the doctrine of estoppel, which shuts off the vendor, who has warranted a clear title, from asserting a claim against the title which he conveyed and warranted. Gough v. Bell, 21 N. J. Law, 157; Moore v. Rake, 26 N. J. Law, 574; Brundred v. Walker, 12 N. J. Eq. 140; Vreeland v. Blauvelt, 23 N. J. Eq. 483; Matthiessen & Wiechers Sugar-Refining Co. v. Mayor, etc.. of Jersey City, 26 N. J. Eq. 247. In respect to sales of personal property, it has been held that, without any express warranty of title, the same result follows as in cases of the covenant of warranty in the sale of real estate. The sale of personalty by a person in possession and, in England, by any one, whether in possession or not-carries with it an implied warranty that the vendor has the right to sell. In this respect such sales differ from sales of real estate by a deed of bargain and sale; for such a deed includes no implied warranty of title. Phillips v. Mayor, etc., of Hudson, 31 N. J. Law, 143, Gano v. Vanderveer, 34 N. J. Law, 293. In