"The Witness: I will have to ask him [indi- | money in this account came out of the macating the bankrupt]. "Mr. Durgan: See what he said. "The Bankrupt: I will tell you. "Mr. Boardman: Never mind. "The Witness: He said, in regard to when I paid the $18,000, I should have it should have been mentioned there that $1,000 was deposited, and that there was $17,000, instead of saying $18,000. Q. That is what your brother told you, is it? A. Yes, sir. Q. You had forQ. You had forgotten that? A. I had forgotten that. I supposed, in fact, you would take it for that." It is impossible to reconcile this evidence with any theory of a beneficial ownership of this property vested in Williams A. Hunt. Either he was in such darkness as to the transactions as to discredit any notion that he owned it, or he was engaged in a conspiracy with his brother to conceal the true facts concerning the purchase. The conclusion necessary to be drawn from that hypothesis is the same as the other, for if Williams was the true, beneficial owner, there was no reason for the concealment of the fact that the purchase price had been paid by his own checks. He went further in his examination before the referee. He stated that this $18,000 cash had been taken from a mahogany money box, which he owned, and in which he kept a portion of his wealth. This box had contained, according to his account, $80,000 on January 1, 1907. The origin of this fund, as accounted for, in the bankruptcy proceeding, was his honest toil for a period of a few years. He was cross-examined further as to this fund of $80,000 in the present case, and he testified that it had its origin in two very remarkable gambling transactions, each of which netted him the precise sum of $15,000. This fund of $80,000 has been used, if the Hunt brothers are to be believed, in paying for the property in question, and in the purchase from Fred of other portions of his estate, and for no other purpose. I am forced to the conclusion that the story of this fund of $80,000 is a fable. As has been said, the $10,683.86 actually paid to Mrs. Beecher was drawn from a bank account in the Bankers' Trust Company standing in the name of Williams A. Hunt. The body of these checks were, in each instance, written by Fred Hunt. They were merely signed by Williams, and Williams testified that Fred Hunt had full authority to sign checks on this account. Williams ignorance as to the facts in connection with this account is equal to his lack of information as to the facts relating to the purchase of the property. The account was originally opened with the Mercantile Trust Company, which company was afterwards merged with the Bankers' Trust Company. Williams has never been either to the Mercantile Trust Company nor to the Bankers' Trust Company. He does not know how long he has had the account. He never "bothered" with his bank deposit book. He does not know when the merger between the two trust companies took place. He says that part of the He hogany box, but he cannot tell how much of the money that came out of the box went into the bank account. When, in November, 1912, he was examined in the bankruptcy proceedings, he could not tell whether he then had a checkbook for this account or not. could not then recall the number of checks he had drawn on this account during the year 1912. He could not tell whether it would be more than 20 or less than 20. In fact, he had "no recollection whatsoever." The one definite assertion that he ventured to make was that his balance in this account on January 1, 1912, was about $10,000. A copy of this account was produced in this cause, and showed the balance on that day to have been $758.48. On the other hand, Fred M. Hunt had complete dominion over this account. He drew all the checks and could sign any check that he chose to sign. The check for $1,000 of November 20, 1911, mentioned above, was produced and offered in evidence before the referee in bankruptcy. It bore the serial number 7100. An examination of a copy of this account, furnished by the banks, shows this check as the sixth withdrawal. A later check in this same series is numbered 8. On the stand, Fred Hunt admitted that the number had been changed, but denied that any sinister purpose had prompted the alteration. A small pocket checkbook, purporting to show this account, was produced before the referee. From the cross-examination of Williams Hunt in this cause, it appears that the earlier stubs had been torn out from this book, and all the entries intended to show the dealing with the account in question were crowded upon two stubs. This book should have shown the three Beecher checks. But, if it did, counsel who examined the witness, apparently failed to detect it. This checkbook, though called for by the complainant, was not produced at the trial of this cause. Fred Hunt was examined as to the method employed in keeping this check account. stated that each check was entered upon a corresponding stub. It is evident, therefore, that the stub checkbook produced before the referee was not a genuine document. It is quite evident, therefore, that the money that went into the purchase of this property was the money of Fred M. Hunt, though drawn from an account carried in the name of his brother. The property was conveyed by Mrs. Beecher to Williams A. Hunt, subject to a second mortgage of $6,500. This mortgage was paid off on January 8, 1912, by three checks of Fred M. Hunt, drawn on the Battery Park National Bank, two of which were drawn to the order of one Katz. He After the election of Mr. Trask as trustee, Fred Hunt produced before the referee and delivered to Mr. Trask a bundle of about 300 checks, drawn on the Battery Park account, covering a period of several years. He also produced a bundle of checks drawn on an ac These are the checks that have been "lost" count that he carried in the Mechanics' & None of them did? A. No, sir. Q. Did any of Metals' National Bank of New York, and six them go to the Newark contract? A. No, sir. checks drawn on an account in the Bankers'. Did any go to Newark? A. No, sir; I don't think so." Trust Company, standing in his own name. He also produced what purported to be a stub checkbook on the Battery Park National Bank, another on the Mechanics' & Metals' Bank. He testified that his bank book and stub book on the Bankers' Trust Company account had been "lost in the shuffle." This last account, by the way, was by far the largest account carried by Fred Hunt, showing deposits during a period of 18 months of $89,344.99, and except for the months of January, February, and April, 1912, this account was the least active of all his numer ous accounts. The three so-called Katz checks were not among the large bundle of Battery Park checks delivered to Mr. Trask. It is quite apparent that they were withheld, and, further, that the stub checkbooks delivered to Mr. Trask at the same time were man ufactured for the occasion. There are many things that point to this conclusion. Only one need be referred to; that is, that the checks covering the period in question, all or practically all, bore the vignetted picture of a ship with an appropriate motto. The checks remaining in the stub book bore no such vignette. Yet Fred Hunt had testified before the referee, speaking of these checks and stub books: "I will not say they correspond in number, but they were taken from those books." In the face of this testimony, the story of these brothers, to the effect that Williams gave Fred $6,500 in cash with which to pay this mortgage, which money Fred gave out in driblets to his customers and friends, and gave in its place his own checks in payment of the mortgage, is entitled to little, if any, weight. The brothers contradicted each other as to the date of this payment by Williams to Fred, and the friend that they bring in to corroborate them contradicts them both. That this mortgage was paid by Fred M. Hunt with his own money is proved to my satisfaction. Since the purchase of this property, there has been erected upon it a stable and a garage. The stable was erected by William L. Blanchard, or, what seems to be the same thing, by the William L. Blanchard Company. There was paid to Blanchard on account of this work $17,250. Of this sum, $7,000 was paid by six checks drawn by Fred M. Hunt on his account in the Bankers' Trust Company. Fred Hunt now admits giving three of these checks, or $3,500, but the payment of the whole $7,000 is so completely proved by Blanchard's books and the records of the Federal Trust Company of Newark and the Bankers' Trust Company of New York that counsel for defendant did not attempt to dispute the fact. Before the referee, however, Fred had testified, speaking of the checks drawn on this very account, as follows: "Q. Do you want to swear that none of these went to William L. Blanchard? A. No, sir. Q. by Fred Hunt. Two thousand dollars of this $17,250, was paid by checks drawn on accounts standing in the name of Hunt Bros. But it is clear that Fred Hunt's signature alone was recognized by the banks. Two other checks were given to Blanchard, one for $750 and one for $500, drawn on the Newark Trust Company, on an account opened by Fred Hunt on May 8, 1912, in the name of Williams A. Hunt. When Fred opened this account, he filed with the bank a power of attorney from Williams, authorizing him, Fred, to sign Williams' name to checks and notes. At the time Fred opened this account, he had broken with the complainant, he was heavily indebted to the Mechanics' & Metals' National Bank, and his balance in $105.97. He had made every preparation to the Bankers' Trust Company was reduced to fail. During the preceding two weeks, he had given notes to five of his creditors. There had been recorded a deed of his home property to his friend, Fred Brown, an assignment to Blanchard of a mortgage of $4,500, an assignment to his sister of an interest in another mortgage, and on the same day, an assignment of his interest in his uncle, Samuel I. Hunt's estate to Williams A. Hunt, for a stated consideration of $12,000. These two payments to Blanchard, made by checks on this account, were clearly made with Fred's money. The mortgage of $4,500 assigned to Blanchard as above mentioned, was assigned without consideration, and when redeemed by. two payments of $2,000 and $2,500, respectively, credits for those sums were given by Blanchard on account of this construction work. The balance of the payments to Blanchard were made in cash by Fred Hunt, who took receipts therefor in the name of his brother. Other and smaller sums were paid to other contractors, while the evidence in connection with these payments is not as clear and satisfactory as in respect to the payments of Blanchard, yet the preponderance of evidence is in favor of their having been made by Fred Hunt. There is no satisfactory proof of their having been made by Williams Hunt. It is therefore clear that Fred M. Hunt was, at the time of the filing of the bill in this cause, and at the time of the filing of the petition in bankruptcy, by virtue of a resulting trust, the sole beneficial owner of the premises described in the bill of complaint. [2] The cross-bill seeks further to set aside a conveyance of a one-half interest in a certain mortgage given by one Churchman to Fred and Williams Hunt. This half interest Fred assigned to Williams by assignment dated October 10, 1911, which assignment was not recorded, however, until April 27, 1912. On the last-mentioned day, Fred Hunt handed to Blanchard this assignment, together with a deed of his home, made out to Fred Brown, and an assignment of the $4,500 mortgage above mentioned. He asked Blanchard to have the deed and the assignment of the Churchman mortgage recorded in the Essex county register's office. Blanchard understood the errand and performed it through his own attorneys, as the records show. It is not necessary to rely upon the declarations of Fred Hunt made to Blanchard to find this assignment fraudulent. Fred had the custody of this unrecorded assignment six months after the date of its execution. There are no witnesses to the payment of the consideration for this assignment. Williams says that he got the money, $1,150, to pay Fred, out of his pocket. That seems to him a perfectly satisfactory explanation as to the source and origin of this fund. Williams Hunt's alleged reason for not recording the assignment is practically a confession of fraud. "Q. Was there any reason connected with your brother why you did not record these papers and these instruments at the time when they were given? A. I thought more than likely he would regain his feet again-come to the front-that, he being a brother of mine, I did not want to publish him all over. Q. Did you say anything to him about the hazardous character of his business, or anything like that? A. Nothing more than that I thought he was not doing extra good as he wanted to be borrowing all the time." * The foregoing was brought out by his own counsel upon direct examination. This admission has a double bearing on the case. It was argued by counsel for the Hunts that it was impossible to believe that Fred and Williams had begun as early as December, 1911, to make plans for the protection of Fred's property from his creditors. Yet here we have Williams testifying that that object was in his mind as early as October 10, 1911. My conclusion is that this assignment of the Churchman mortgage was given by Fred and accepted by Williams with the intent to hinder, delay, and defraud the creditors of Fred, and is therefore void. Williams is chargeable with one-half of the interest collected upon this mortgage since its assignment to him. I shall advise a decree in accordance with these views. LEWIS, V. C. This cause was brought to trial on the bill, answers, and replications and The complainants and trustee in bankruptcy cross-bill and answer to cross-bill and proofs. have only a common interest. The complainant makes no claim under its attachment to preference over the other creditors. the position that proofs in this cause are suffiplainant and the trustee in bankruptcy take cient to sustain their claim that Fred M. Hunt was the beneficial owner of the property described in the bill filed by the Battery Park National Bank of New York, and in this view I concur. The transactions of the Hunts exhibit an unusual, although not novel, attempt of a debtor to put his property beyond the reach of his creditors. It is quite apparent, however, that had it not been for the manifest lack of information regarding them shown by Williams Hunt, no such light would have been shed upon them as we now have. This to my mind forces one to the belief that Williams Hunt was not handling his own funds. And supporting this opinion there is, of course, this fact substantiated Hunt has not satisfactorily shown any source from a sifting of the testimony-that Williams from which he obtained the money to make the substantial investment in Washington street, Newark. The tale of the betting events and the wealth held in the mahogany money box are unconvincing. On the other hand, the bank accounts, checks, check stubs, construction and mortgage payments, dealings with contractors and mortgagees, the darkness of Williams Hunt about all these matters, the detail knowledge shown by his brother of them all, and his dominion and control, lead me unfailingly to the conclusion that the ownership of the property is in Fred M. Hunt, and that he is the sole beneficial owner of the premises described in the bill of complaint by virtue of a resulting trust. The relief sought by the cross-bill must be also granted. I am not satisfied from the testimony that there has been a bona fide assignment of Fred's interest in the Churchman mortgage to Williams. Neither is the latter's account of the source from which he derived the money to pay Fred, or his reason for not recording the instrument, convincing. And then, too, Fred had the custody of this unrecorded assignment some months after the date of its execution. The whole affair looks like part of the plan to I shall advise a decree accordingly. shelter Fred until the rainy season was over. (83 N. J. Eq. 514) KAROLY et al. v. HUNGARIAN REFORMED CHURCH OF NEW BRUNSWICK et al. (Court of Chancery of New Jersey. July 25, 1914.) 1. RELIGIOUS SOCIETIES (§ 25*)-CHURCHES AFFILIATION-EVIDENCE. In a suit to set aside a conveyance of church property, evidence held to require a finding that the grantor corporation and its adherents were affiliated with the Presbyterian Church of North America, and was not an independent body without ecclesiastical affiliation. [Ed. Note.-For other cases, see Religious Societies, Cent. Dig. §§ 154-167; Dec. Dig. § 25.*] 2. RELIGIOUS SOCIETIES (§ 23*)-CHURCHESSECESSION-NUMBERS-PROPERTY. Though one or any number of members of a church organization may secede at will, no number, however great the majority, may secede and take with them the church property to a new affiliation, so long as there remains a faction which abides by the doctrines and rules of the church government which the unit *For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes ed body professed when the property was acquired, in which case the property can be disposed of only in accordance with the method prescribed by the judicatory of the original body. [Ed. Note. For other cases, see Religious Societies, Cent. Dig. §§ 147-153; Dec. Dig. § 23.*] Suit by Nemeth Karoly and others against the Hungarian Reformed Church of New Brunswick, N. J., and others, to set aside certain deeds of church property. On final hearing on bill, answer, replication, and proofs. Decree for complainants. This is a controversy between two ecclesiastical bodies and their adherents over the ownership and possession of a church edifice and lands situated in New Brunswick. The claim on the part of the complainants is that the property in suit belongs to a corporation which is affiliated with the Presbyterian denomination. The defendants, on the contrary, claim that it now belongs to a corporation which is affiliated with an ecclesiastical body known as the Reformed Church of Hungary, having its situs and headquarters in the empire of Austria. this corporation the 170 odd Hungarians who likewise formed under the general laws of Prior to 1904 there were many of Hungarian birth and speech in New Brunswick who had formed a voluntary association for the purpose of having divine service held in their native language. Dr. Knox, then and now the pastor of the First Presbyterian Church of New Brunswick, took an oversight of these people, performed their marriages, attended at their funerals, and administered such spiritual comfort as he was able to, and it gradually came to be looked upon as and it gradually came to be looked upon as a sort of Hungarian annex to the First Presbyterian Church. As early as the spring of 1903 the Standing Committee on Synodical Home Missions of the Presbytery of New Brunswick made a report to the Presbytery concerning this voluntary association, and introduced to it Mr. Paul F. B. Hamborszky, then a student in the Princeton Theological Seminary, who had been devoting his time and attention to this Hungarian body; and thereupon in April of 1903 Mr. Hamborszky presented a request from 160 Hungarians belonging to that body asking to be taken under the care of the Presbytery. Such proceedings were had in the session of the First Presbyterian Church and in the Presbytery of New Brunswick; that shortly thereafter 171 persons were admitted to membership in that church from the Hungarian voluntary association above mentioned. In the early part of Hutchinson & Hutchinson, of Trenton (Con1904 the Committee on Synodical Home Mis-over English, of Newark, on the brief), for sions, to whose care the Hungarian body complainants. Alfred F. Skinner, of Newhad been committed, recommended that they ark, and Morris Cukor, of New York City, should be dismissed from the First Church for defendants. Walter C. Sedam, of New of New Brunswick and should constitute a Brunswick, for Rev. Paul F. B. Hamborszky. separate mission congregation, in pursuance It will thus be seen that if the conveyances in question shall stand the property in suit is irrevocably taken from the Presbyterian connection and is irrevocably transferred to a connection with a foreign ecclesiastical dominion. of which recommendation there was organiz- HOWELL, V. C. (after stating the facts ed on August 5, 1904, under the laws relat- as above). [1] The principal question of ing to religious societies, a corporation hav- fact is whether the old corporation and its ing the name The Hungarian Presbyterian adherents were affiliated with the PresbyteChurch Evangelic Reformated Church. Ofrian denomination, or whether they were an *For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes independent body without ecclesiastical affili- | and its Session of the First Church, exercised ation with any other body of Christians. If they were so affiliated with and had so become a part of the Presbyterian denomination, then their secular affairs are governed by plain rules of law relating to the ownership of ecclesiastical property, and if they shall be found to be an independent body they are then governed by other rules which are quite as plain. I have no doubt but that the old corporation and its adherents were Presbyterians and were affiliated with the Presbyterian denomination in every sense of the word, and that they broke the tie of brotherhood in an irregular and disorderly manner. Nor do I think it can be said that any fraud or imposition was practiced upon these non-English-speaking people, as has been suggested, because the things that they did and saw and took part in could not fail to impress the most ignorant and careless a fostering care over the spiritual welfare of this body of Hungarians, and gave them material aid in maintaining their organization. During the whole period of its existence they furnished money for its support and in every way possible encouraged them by contributions and by advice to continue in their work. On April 9, 1907, the Rev. Mr. Hamborszky was installed as pastor of the church; he was a Presbyterian in fact and in name; he was a graduate of a Presbyterian theological seminary, he had been a member of Presbytery of Lackawanna, and later became a member of the Presbytery of New Brunswick. His call from the congregation was presented to the Presbytery in full session in his presence, and then and there acted upon by the Presbytery, and accepted by him. stallation ceremony took place in their own persons that they were connecting themselves and took place in open meeting; church building. It was widely advertised with and were a part of the old corporation crowd was in attendance, the church being a large with all its Presbyterial formalities. I may full. There was a sermon in the Hungarian pause at this point for a moment to explain the government of the Presbyterian Church. language containing a charge to the pastor, There is first the congregation or worship- and likewise a charge to the people in the ping unit, consisting of individual members same language by one of the clergymen presin every walk of life, who stand on an equali-ent, and the assent of the whole congregation ty with each other so far as their ecclesiasti- to the whole proceeding was manifested by cal relations are concerned. These are governed spiritually by a body called the Session, chosen from their own number. The Session is governed by the Presbytery, a body consisting of delegates elected from each individual church within a certain prescribed geographical area. The Presbyteries in turn are spiritually controlled by the Synod, a representative body, meeting for each state, and the Synod by the General Assembly of the Presbyterian Church. Thus is formed a compact and strongly knit ecclesiastical body having a common purpose, with common objects, and bound together by valid promises and agreements, which promises and agreements may not be lightly broken, but so far as property rights are concerned, are as binding and cogent as are agreements made concerning other rights of property. The in a vote of approval, in which there were no negatives. On one occasion the Presbytery met in the church building of the Magyar Church on Hale street, and the women of the congregation furnished a noonday meal to its members. They made a mortgage in 1905 on the Hale street property to the Board of Church Erection Fund of the Presbyterian Church, which by the terms of the mortgage ran without interest so long as the property remained in the Presbyterian connection. They contributed to the funds of the Presbytery; they sent delegates to its regular meetings, made to it reports of their progress, and submitted the minutes of the meetings of the Session of the church to it for examination and approval. All these proceedings point in but one direction. They indicate beyond question that the Hungarians who belonged to the old cor Presbyterians and were bound by their Presbyterian connection. Least of all can Rev. Mr. Hamborszky find any excuse whatever for his unseemly and disorderly conduct in his endeavor to release himself from the Presbyterian control. It cannot be said that he did not understand what he was doing; he is an educated man, perfectly familiar with the English language, and he fully understood every step which he was taking and which he was advising his congregation to take. We have seen what interest the Presbyterians of New Brunswick took in this strug-poration fully understood that they were gling association prior to .its organization into a corporation. We have seen that this corporation carried as part of its name the word "Presbyterian," and that when its name was changed in the following year the word "Presbyterian" was retained. After its incorporation and its segregation from the First Presbyterian Church of New Brunswick other things were done which still more strongly indicate to my mind the intention of these people to form and retain the Presbyterian connection. The 170 odd Hungarians who became members of the First Church [2] There is no doubt about the right of were dismissed to the new congregation after individual members of a church organizaits formation, and until the final attempt at tion to secede therefrom at will. The same separation in 1912 the Presbyterian Church, is true of any number of members of such by its Presbytery, its Synodical Committee, organizations; but no number, however great |