For this amount the new mortgage was given as above. It will be observed that in ascertaining the amount due on the first mortgage, for the purposes of the new mortgage, allowance was made for the payments both on account of the premium and on account of the stock subscriptions, but no such allowances were made by the master in the computation of the amount due on the present mortgage. The petitioner complains of this omission by the master. The complainant justifies it, and relies on the act under which it was incorporated, and says, and the secretary so swears, that the allowance so made in 1898 was a pure gratuity on the part of the complainant which it was under no legal or equitable obligation to make. But I cannot adopt that view. The original debt was $2,850. On this petitioner had paid in actual cash $1,747.79, leaving due a balance, not counting interest, of $602.21. Now, if the two items of allowance, $140.82, and $276.25, making, in all, $417.07, had not been made, the amount due on the mortgage, after running six years, according to complainant's interpretation, would have been $3,650, less payment of $1,747.79, leaving a balance of $1,902.21; that is, starting with a debt of $2,350, and paying thereon in monthly installments for nearly six years $1,747.79, we have remaining due, on complainant's theory, $1,902.21, a result entirely out of consonance with any notion of equity. It would have resulted, as already stated, to the enforcement of a penalty.

For reasons already stated, the petitioner would have been entitled to a rebate of interest; so that in equity, on a proper adjustment of the amount due on the mortgage of 1892, the petitioner would have been entitled to a liberal abatement, and the only question is whether the amount actually allowed

For

was in justice and equity sufficient. present purposes I shall consider it as sufficient, and shall take the amount, $1,672.11, agreed upon as due at the date of the mortgage here in question, as the proper basis for the adjustment of the amount due on it at the date of the master's report. In arriving at that amount I am of the opinion that a simple rebate of interest is not sufficient. I think the rebate should be at or near the rate which the loan has been carrying, viz., 9% per cent. For safety I shall consider it 9 per cent.

I work out the problem thus: The $750.79 paid covered a fraction more than 40 months, and liquidated all dues up to November 1, 1901. The balance due, of $1,900, covered a fraction over 103 months. Of those, 22 months elapsed before September 1, 1903, 11 days before the date of the master's report, so that on the day last named $405 was past due, and $1,495 was yet to accrue. Now the average time that those 22 monthly payments had been due was 11 months. I shall therefore add to the $405 interest thereon at 9 per cent. per annum for the average time it had been running, to wit, for 11 months; that is, the principal sum is $405, interest, $33.40. Now I shall add thereto $1,495, less rebate thereon at 9 per cent. per annum for half the time-that is, 103 months, less 22 months during which the 81 monthly pay. ments which compose it accrued, to wit, 401⁄2 months. To accomplish this I ascertain what sum of money put at interest at 9 per cent. per annum for 40% months will amount, with the interest, to $1,495. That sum is $1,146.69. Now to this sum of $1,146.69 add the $405, and the interest thereon, $33.40; the result is $1,584.09 as the amount due September 1, 1903. Add to this interest to September 12th, 11 days, at 9 per cent., $4.35, we have $1,588.44. This result is subject to a possible error of a few dollars in small fractions of time and sums which I have not taken into account. It takes no account of fines, which I think should not be included. (I find another source of possible error in the master's report which I shall mention here. An examination of the petitioner's passbook, in which the entries of the payments aggregating $750.79 are made, shows that the sum of $27.89 added to the debt of $1,672.11 of July 1, 1898, to make up the $1,700 was not included in the $750.79, and it further shows that those actual payments amounted to $780.30, and that $36.51 were deducted therefrom for three items the purport of which I cannot make out. No mention is made of these items by counsel.) The result is that, instead of finding her debt increased $200 in five years, notwithstanding a payment of $750.79, the debt is reduced $111.56, which certainly is more in consonance with equitable ideas than the other. Another way to look at it is this: The legal interest on $1,700 for five years and two months is $527. The petitioner has paid $750.79, or $223.79

more than the legal interest, and out of this $223.79 she has paid on account of principal of her debt $111.56, and the balance is for excess of legal interest.

I am aware that the statute requiring a rebate of interest in such cases provides for a rebate of "legal" interest, which ordinarily would be 6 per cent., but I have already remarked that the rebate of interest is strictly an equitable right independent of the statute. Further, I think that the statute in this court should have an equitable construction. Thus, if the rate of interest used by the parties in fixing the amount due on a mortgage payable in installments without interest was originally 4 per cent., it would be inequitable, in case the mortgagee were compelled to foreclose the mortgage, to be compelled to accept-and he is, in substance, so compelled-the principal with a rebate of 6 per cent. So here, where the deferred payments were made upon a basis of 9 per cent., it is unjust to the mortgagor to be given a rebate of only 6 per cent. In other words, it is within the equity of the statute to give a rebate at the rate which the mortgagee has declared has been rendered legal by the statute under which it is organized. For present purposes 9 per cent. must be held to be legal interest according to the language of the statute.

This result renders it unnecessary to deal with another argument advanced by counsel for petitioner, based on the admitted fact that in the case here in hand the new loan of $1,700 was not in fact put up at auction, and the amount of premium charged petitioner was arrived at by striking an average of the prices at which loans were being struck off. His argument is that by the language and spirit of the act, and by the constitution of complainant, all loans must be put up at auction.

I shall only add that I have carefully gone through all the authorities cited by counsel of complainant in support of the master's report, and find nothing in any of them inconsistent with the conclusions at which I have arrived. Counsel referred me to dicta of judges of this court declaring that, where a mortgage given under the old plan already mentioned, which covered not only the principal sum loaned, with interest thereon, but also the annual dues on stock subscriptions, in case of foreclosure in default of payment, the proper mode of computing the amount due was to include all such dues up to the date of the winding up of the then present series of the association. The difficulty with this doctrine is, and in practice was found to be, that there was usually no specific time fixed, or capable of being fixed, when all the dues would become payable. I think an examination of the adjudged cases will show this. The language above quoted from the opinion of Chief Justice Whelpley in the case in 29 N. J. Law, 231, is significant.

But if we can imagine a decree in one of

the old-fashioned cases, of which the Arkansas case was a sample, for the whole amount of the original debt, with interest to date, and for the aggregate of the monthly dues for stock subscriptions, and the amount of the decree should be collected by a sale of the mortgaged premises, we should have this strange result, viz.: The borrower would be compelled to pay to the association, not only the original amount loaned, but also, in advance, the whole of the fund which, by the scheme of the association, was intended to pay that debt; and, when the stock subscribed should have arrived at par value, the holder of the stock would be entitled to an immediate division of assets, on the score of the whole affair amounting to a partnership, and would get back the value of his stock in money. In other words, the court would decree the borrower's land to be sold to raise money which, the moment it was received by the complainant, would in equity become the borrower's money. I think the Arkansas case above cited might have been put upon that ground.

The leading case in New Jersey where this matter has been dealt with in practice is Mechanics' B. & L. Ass'n v. Conover et al., 14 N. J. Eq. 219 (decided by Chancellor Green). The decree in that case was appealed, and the decree made by him was modified in a matter but faintly mooted before him, but his disposition of the question arising out of the building loan laws was expressly affirmed. The bill was filed by the association to foreclose a mortgage, given to it under the old plan, which had run for four years, and a considerable sum of money had been paid on the stock subscriptions. The dispute was between a subsequent mortgagee and judgment creditors who had levied on the shares of stock. It was claimed by the second mortgagee that the payments for four years on account of the stock subscriptions should be applied to the reduction of the first mortgage. This was contested by the judgment creditors, who wished to have the privilege of selling that stock. The chancellor, after stating very clearly the plan on which the association was acting, and the practical workings thereof, declared that the second mortgagee was not entitled to have the amount so applied, or any other amount, until the association had been long enough in operation to make the value of the stock equal to the debt, which time was uncertain. This part of the decree and the reasoning thereon was affirmed by the Court of Appeals. But the chancellor further held that the judgment creditors had a right to sell the stock-which seemed to have a marketable value-and take the proceeds and apply them on their judgments. This part of the decree was reversed by the Court of Appeals, and it was held that the second mortgage had the superior equity to have the value of the shares, as contradistinguished from the actual amount paid in on account

of them, applied in reduction of the first mortgage. This principle was applied by Chancellor Runyon in the case of Red Bank Mut. B. & L. Ass'n v. Paterson, 27 N. J. Eq. 223, a case much like Chancellor Green's case, and the association was compelled to sell at auction the stock, which they held as collateral security, and apply the proceeds in reduction of the amount due on their mortgage, before having recourse to the mortgaged premises. This case was followed by Vice Chancellor Grey in the very recent case of Hoagland v. Saul (N. J. Ch.) 53 Atl. 704.

This mode seems to me much more equitable than the one suggested, of including in the decree the whole amount of monthly dues not yet due., But all this learning seems to me to have little application to the present case, where, as before observed, the existence of the stock is apparently a mere shell, and the subscriptions to it, and the bonus for the loan, and the interest thereon are all mingled together, and the amount divided up into installments without interest, on the payment of the last one of which the mortgage debt is paid, without regard to the value of the shares, and the borrower's interest in the association ceases. Such is the construction which I put upon the elaborate and complicated system contained in complainant's constitution.

I shall advise an order that the amount due at the date of the master's decree be reduced to the sum of $1,588.44, and that the sheriff be directed to levy that amount, with costs and interest, and that he shall give petitioner credit for the costs of her petition herein. The figures above mentioned are subject to be corrected by any suggestion which counsel on either side have to make.

Petitioner complains that the mortgage of 1892 remains unsatisfied of record. This must be corrected, and the mortgage either be satisfied or tendered to the purchaser for satisfaction at the sale.

1. An accident insurance policy, issued for the term of 1 year, contained a provision that the insurance should apply only to persons over 16 years of age and under 65 years of age. After the decision of this court that it was essential to recovery under the policy that the assured should be within the ages stated, at the time of the injury, the plaintiff filed an amended declaration averring that the assured, in a written application for the insurance, and in response to an inquiry of defendant, stated that his age was 64 years.

Held, that the count was demurrable, in the absence of an averment that the assured was under 65 years of age at the time of the accident. 2. An averment that the defendant, after the

death of the assured, and prior to the expiration of the year from the issue of the policy, waived the provisions that the insurance should apply only to persons over 16 years of age and under 65 years of age, and ratified and confirmed the policy as a contract of insurance for 1 year, sets forth a new contract with the present plaintiff, instead of with the assured, and, in the absence of any averment of a consideration for this new contract, is demurrable.

3. The policy provided that "no conditions or provisions shall be waived or altered by any one unless by written consent of an officer of the company at the home office." Held, that the provision that the insurance should apply only to persons over 16 years of age and under 65 years of age could only be waived or altered by written consent in accordance with the policy. (Syllabus by the Court.)

Action by Fannie B. Wheeler against the United States Casualty Company. Demurrer to amended declaration. Judgment for defendant.

Argued June term, 1904, before GARRISON and SWAYZE, JJ.

John M. Enright, for plaintiff. Somers & Adams, for defendant.

SWAYZE, J. A demurrer in this case was sustained (57 Atl. 124), and the declaration held to be defective. The plaintiff has amended her declaration, and the defendant has demurred to the first two counts. The first count now avers that the assured made a written application for the insurance, and, in response to an inquiry of the defendant, stated that his age was 64 years, and that after the death of the assured, and prior to the expiration of the year from the date of the issue of the policy, the defendant waived the provision that the insurance should apply only to persons over 16 years of age and under 65 years of age, and ratified and confirmed the policy as a contract of insurance for one year. The second count is identical with the first, except that it omits the averments as to waiver.

The fact that the defendant knew the assured to be 64 years of age when the policy was issued cannot change the construction heretofore adopted by this court, that the policy requires that the accident shall have happened while the person injured was over 16 and under 65 years of age. The averment meets one of the reasons urged by the court for the construction it adopted, but only one. The other reasons are as forceful now as when the case was formerly before us, and suffice of themselves to vindicate the conclusion we then reached. The fact that the policy was issued for a year does not lead to a different result. If the assured was, as he stated, 64 years old at the date of the application, the policy would continue for the full year from date of issue.

The averment of waiver does not make the count good. It is not a waiver of performance of conditions precedent by the assured, such as furnishing proof of loss. Hibernia Mutual Fire Insurance Co. v. Meyer, 39 N. J. Law, 482; Carson v. Jersey City In

surance Company, 43 N. J. Law, 300, 39 Am. Rep. 584; Merchants' Insurance Co. v. Gibbs, 56 N. J. Law, 679, 29 Atl. 485,44 Am. St. Rep. 413; Snyder v. Dwelling House Insurance Co., 59 N. J. Law, 544, 37 Atl. 1022, 59 Am. St. Rep. 625. Nor can the waiver be held good as an estoppel, for the declaration shows that the plaintiff could not have been led to any act or encouraged in any omission to her prejudice by the act relied on as a waiver, as in Fire Insurance Co. v. Building Association, 43 N. J. Law, 652, where a condition as to alienation was held to be waived; Martin v. Jersey City Insurance Co., 44 N. J. Law, 274, where a forfeiture due to increase of hazard was waived; Redstrake v. Cumberland Insurance Co., 44 N. J. Law, 294, where a provision avoiding the policy in case of effecting other insurance was waived, and the present chancellor called attention to the distinction between cases of waiver and cases of estoppel; Martin v. State Insurance Company, 44 N. J. Law, 485, 43 Am. Rep. 397, where delay in bringing suit was induced by the conduct of the defendant company.

The facts as averred in the present case do not show a ratification or a confirmation of a contract previously invalid. The decląration sets up an entirely new contract with the present plaintiff, instead of with the assured, with whom the contract was originally made, and for a term different from that of the original contract; but it fails to aver any consideration for this new agreement, and is therefore demurrable. The case resembles Ware v. Millville Mutual Marine & Fire Insurance Company, 45 N. J. Law, 177; N. J. Rubber Co. v. Commercial Union Assurance Co., 64 N. J. Law, 580, 46 Atl. 777.

There is another insuperable objection to the first count. It refers to the copy of the policy annexed to the declaration, and made part thereof. The policy provides that "no condition or provision shall be waived or altered by any one unless by written consent of an officer of the company at the home office." The term for which the policy was to run is one of these "conditions and provisions which relate to the formation and continuance" of the contract, and not a condition to be performed after the loss has occurred. It is only to the latter class of cases that such a provision has been held to be inapplicable. Snyder v. Insurance Co., 59 N. J. Law, 544, 37 Atl. 1022, 59 Am. St. Rep. 625, at page 548, 37 Atl. 1022, 59 Am. St. Rep. 625. The first count fails to aver a waiver by written consent, as the policy requires.

In support of the second count, it is urged that, for aught that appears therein, the assured may have been under the age of 65 years at the time of the accident. The court has already held (57 Atl. 124) that the provision of the policy as to age "was inserted as one of the terms defining the range of the risks assured, and requiring that the accident must occur during the stated period

of life, in order to charge responsibility for it upon the company." Since the declaration, by incorporating the policy, shows that the contract applied only in certain cases, it was incumbent upon the pleader to bring this case within the terms of the contract by proper averments. This he has failed to do.

The defendant is entitled to judgment on the demurrer.

(68 N. J. E. 198) ATTORNEY GENERAL et al. v. CENTRAL R. CO. OF NEW JERSEY et al. (Court of Chancery of New Jersey. Nov. 16, 1904.)

GRANT OF TIDE LANDS-TESTING VALIDITY-INFORMATION AND BILL-SEPARATE DECREESQUESTIONS OF LAW OR EQUITY-REVIEWING DECISIONS OF LAW COURT-RIPARIAN RIGHTS -LACHES BY STATE.

1. Where an information by the Attorney General in behalf of the state is filed in connec tion with a bill in equity by a city to declare void a grant by the riparian commissioners and for other relief, separate decrees on the information and bill may be rendered.

2. Where an action at law is pending between a city and a railroad company for the settlement of the question as to the existence of a public highway, on an information filed by the Attorney General in connection with a bill by the city to question the validity of the grant under which the railroad company claims the relief on the information, as well as on the bill, should only be auxiliary to the action at law, and questions of a legal character which may be decided in that action should not be reviewed.

3. The question as to the existence of a highway on the shore of navigable water prior to a grant of the locus in quo by the riparian commissioners is a question properly triable in pending action at law, rather than in a suit in equity to question the validity of such grant.

4. Whether a grant of tide lands by the riparian commissioners was ultra vires on the ground that neither of the grantees were ripa rian owners of the lands included within the lines of an alleged highway is a question triable in a pending action at law, rather than in a suit in equity questioning the validity of such grant.

5. Whether a grant by the riparian commissioners under the riparian acts (Acts March 27, 1874: P. L. p. 103; Gen. St. p. 2791, par. 26) operates to terminate the existence of a highway over the lands included in the grant below the line of the original high-water mark is purely a question of law on the construction of the riparian acts, applied to the facts proved in reference to the situation of the lands at the time of the grant; and, there being an action at law pending wherein the question may be determined, it will not be determined in a suit in equity to test the validity of the grant.

6. Under Wharf Act 1851 (Gen. St. p. 3753) § 1, providing that "it shall be lawful for the owners of lands situated along or on tide waters to build docks or wharfs on the shore in front of his lands, and in any other way to improve the same, and when so built on or improved, to appropriate the same to his own exclusive use, and section 11 (page 3756) defining "shore" as the lands between the limits of ordinary high and low water, the land between the high and low water mark reclaimed by the shore owner becomes vested in such owner as his land.

7. The legal title of a shore owner to lands between the high and low water mark, reclaimed by docks or wharf improvements, as authorized

by the wharf act of 1851 (Gen. St. p. 3753), is subject to the easement of an existing highway reaching to the high-water mark before the reclamation.

8. The decision of the Supreme Court, in an action at law, that the representations of an applicant for a grant of tide lands as to the ownership of lands fronting on the lands applied for are true, cannot be reviewed by the Court of Chancery in a suit to test the validity of such grant.

9. While the delay of the state in filing an information in equity to test the validity of a grant of tide land in front of a highway until all the officers who executed it are deceased will not be sufficient of itself to deprive the state of equitable relief, it is sufficient to prevent it from insisting on the application of a rule of evidence relating to the burden of proof as the basis for deciding that, in the absence of proof to the contrary, it must be conclusively presumed that the grant, so far as it affects the highway, was in fact induced by false representations as to the termination of the highway.

Information by the Attorney General, on behalf of the state, and a bill in equity by the city of Elizabeth against the Central Railroad Company of New Jersey and others, to test the validity of a grant of tide lands. Heard on information and bill, answer, replication, and proofs. Decree of dismissal.

Addison Swift and Frank Bergen, for informant and complainant. J. L. Conover and R. V. Lindabury, for defendants.

EMERY, V. C. A grant made by the Riparian Commissioners to the Central Railroad Company of New Jersey for a tract of land under and along the waters of Staten Island Sound, within the limits of the city of Elizabeth, is brought in question by this information and bill, the general object of which is to have the grant declared void as to a portion of the tract which is alleged to be within the lines of a public highway. On November 12, 1874, the Riparian Commissioners, together with the Governor of the state, granted and conveyed to the defendant the railroad company twelve tracts of land, seven of which were situated in Hudson county (four in the waters of New York Bay and two in the Kill Von Kull and one in Newark Bay), three in Union county (in the waters of New York Bay and Arthur's Kill), and two in Middlesex county (one in the Arthur's Kill and one in the Raritan river). For ten of the tracts (being all except the first and the ninth) the inner boundaries of the respective tracts were fixed by the grant at "high-water mark." In the case of two of the tracts (the first and the ninth) the tracts conveyed are described as being formerly under tide water, but now partly above tide water, and for the first tract the shore line is fixed as "the ordinary highwater mark of the Bay of New York or Communipaw Cove as the same existed in 1804." The ninth tract (which is the only one now in question) lies in the Arthur's Kill or Staten Island Sound on the north side of the outlet of Elizabeth river, and is described as a tract "part of which was

formerly under, but is now above, the tide waters of the Arthur Kill or Staten Island Sound." The shore line is described as "the original high-water mark on the westerly shore of said Sound" and "the original highwater mark on the northerly shore of the Elizabeth river," and the grant conveys by metes and bounds a tract beyond these original shore lines of the Sound and river, to the exterior wharf line fixed by the comThe missioners under the riparian acts. grant expressly conveyed "all the rights of the state in said lands."

The Attorney General, as informant, and the city of Elizabeth, allege that from time immemorial a common highway has existed across the state from the Delaware river, at Trenton, and, across this ninth tract, to a point on Staten Island Sound, in the city of Elizabeth, connecting with the navigable waters of the Sound at the original high-water mark of the Sound, which highway is now known as "Elizabeth Avenue"; that at the time of this grant the highway extended across this ninth tract to the shore line as it then existed, over land which had been filled in beyond the original high-water mark; that the grant of the ninth tract extended along the shore line of the Sound (measured on the exterior wharf line) for about 500 feet, and included the lands under water in front of the highway, and also the lands included within the lines of the highway lying below the original high-water mark of the Sound. The highway is alleged to be 94 feet wide. They now apply to set aside this grant of the ninth tract so far as it conveys or purports to convey any portion of the lands inIcluded within the lines of this highway below the original high-water mark, and for two reasons. The first is that the grant was made to the Central Railroad Company, not as riparian owner, but with the consent and at the request in writing of the Elizabethport & New York Ferry Company, and that neither the railroad nor the ferry company were riparian owners of the lands included within the lines of common highway. It is therefore claimed that under the riparian acts the grant was ultra vires and void as to lands under water in front of the highway. The second reason is that in making application in writing to the commissioners for a grant of this land, as required by the riparian acts, the railroad company gave a description of the ninth tract in their application, and that annexed to the part of the application containing the description was a map or diagram purporting to display the tract and the location of the highway in question in relation thereto, according to which Elizabeth avenue terminated at a point about 300 feet inland from the shore, and at the intersection of the avenue with South Front street, a street running in the same general direction as the original shore line referred to in the map, and about 300 feet distant from the shore line at that