author: Greek, V. C.

text:
    J. Montgomery Hare v. Albert O. Headley.
    After a decree of foreclosure and sale a fire occurred in the mortgaged' premises. The complainant mortgagee having received a certain amount from fire insurance effected by the mortgagor, the second mortgagee obtained an order that said amount should be credited on complainant’s decree, and the surplus, after paying the amount thus.due complainant and the costs, be paid into court. The decree provided that the proceeds of sale should be appropriated to the second after the payment of the first mortgage. On a bill filed by the assignee of the fire insurance companies against the second mortgagee, claiming, under an agreement with the first mortgagee for subrogation, to be entitled to the fund in court — Held, on demurrer for want of parties, that all parties to the original suit who had an interest not only in the money, but in the manner of its disposition, should be made parties to the suit.
    On demurrer to bill for want of parties.

      Mr. J. Frank Fort and Mr. Edward Q. Keasbey, for the demurrer.

      Mr. Edward A. Day, contra.

   Greek, V. C.

This bill, styled an original bill in the nature of -a supplemental bill, is the outcome of the proceedings in the case of Mutual Life Ins. Co. v. Schwab, 6 Dick. Ch. Rep. 204.

It was decided on the application under consideration in that proceeding, that the present complainant could not be made a party to the original suit and obtain relief by petition, and leave was granted under his prayer for other relief to file an original bill, or an original bill in the nature of a supplemental bill. The facts set out in this bill are substantially those alleged in the petition referred to, and will be found stated in the report of that case.

This bill is filed against Albert O. Headley alone, praying that the complainant may be decreed to be entitled to be subrogated to all the rights of the Mutual Life Insurance Company, in and to the decree and execution in the suit of foreclosure, and to the remainder of the moneys realized upon the said sale, over and above the amount paid to the said company, and to the fund in this court, and that the clerk of this court may be required to pay over the said fund to the complainant, and that the com-1 plainant may have the benefit of said suit and the proceedings therein, with such other and further relief as the case may require.

The final decree in the original suit was entered January 2-7th, 1892, adjudging, among other things, that there was due to the complainant therein, the Mutual Life Insurance Company, the sum of $44,672.74 of principal and interest on its mortgage, and taxes paid by it, with interest from the date last aforesaid; and that there was due to John H. Ease, under the second 'mortgage, the sum of $8,520; and that there was due to Albert O. Headley, on his judgment and mechanics’ lien, the sum of $4,199,27, and fixed the amount and order of priority of sundry subsequent encumbrances on the mortgaged premises, and directed that the whole of the premises should be sold to satisfy the amount due the complainant and defendants respectively.

Between the entry of the final decree and the sale under the execution a fire occurred in the buildings on the mortgaged premises. Policies of insurance against loss by fire had been issued to the Schwabs, the owners, who had appointed the loss, if any, to 'be paid to the mortgagee, the complainant in the original suit, and it received, July 15th, 1892, from the fire insurance companies the adjusted loss, amounting to $6,114.64. The sheriff of Essex county, under the fieri facias issued on the decree, sold the mortgaged premises August 23d, 1892, for the sum of $45,100, which sale was duly confirmed by this court. The purchaser afterwards completed his bid and the sheriff delivered to him a deed, receiving the amount of the bid, with interest, amounting to $45,257.85.

On the 8th of September, 1892, Albert O. Headley, who was one of the defendants in the original suit, filed a petition therein, showing that he was the holder by assignment of the Ease mortgage, which by the decree was payable next after the complainant’s mortgage, and claiming that he was entitled to receive the amount realized on the sale, over and above the amount due the complainant, after crediting the amount received from the insurance. On presenting this petition, an order was made in this Court directing the sheriff to pay into court the surplus moneys over and above the amount decreed to be due the complainant, with interest, costs and sheriff’s fees, after deducting therefrom the sum of $6,114.64 received on said insurance policies. In pursuance of this order the sheriff paid the complainant the amount due, after crediting it with the amount received from said fire insurance, to wit, $41,458.93, and after retaining sheriff’s fees &c., paid into court the sum of $3,484.02.

The original mortgage in this case was made March 31st, 1888, by John M. Riley and Joseph E. Osbourne, who were the owners of the mortgaged premises, and who also subsequently executed the Ease mortgage. Riley and Osbourne, by their deed dated January 25th, 1890, sold the premises to Gabriel' Schwab, Nathan Schwab and Leo L. Schwab, partners com-posing the firm of G. Schwab & Bros., who, as charged in the present bill, until the foreclosure suit, continued to be the owners of record of the lands and buildings thereon erected, notwithstanding the fact, also charged therein, that they,-by deed dated March 23d, 1891, conveyed all their right, title and interest in the mortgaged premises to Frederick Butterfield & Co. It was assumed on the argument that this deed was to be treated as a mortgage.

According to this bill the said fire insurance companies entered into an independent agreement with the mortgagee, the life insurance company, by which the interest of the latter was absolutely insured, notwithstanding default or forfeiture on the part of the insured owners, provided it paid any premium not paid by them; and in such case, on payment of any loss by the fire insurance companies to the mortgagee after any such default of or forfeiture by the insured owners, they .were to be subrogated to all rights of the mortgagee under the mortgage. This agreement was not referred to or attached to any of the policies, which contained nothing outside of the contract of insurance with the owners other than the appointment of the payment to the mortgagee ; nor was the fact that such an agreement had been made alleged or disclosed in the original bill filed by the mortgagee, the Mutual Life Insurance Company.

The present bill charges that so far as the Schwabs were concerned, the policies were forfeited on several grounds, among others, the non-payment by them of the premiums; but it appears by the bill that the mortgagee, after execution issued, applied to be allowed certain amounts paid for premiums for insurance, and an order was made directing the sheriff to raise said amounts in addition to the amount, named in the decree.

The fire insurance companies having assigned their claims to the complainant, he files this bill for the relief before referred to.

Several causes of demurrer were assigned, but it is unnecessary, at this time, to consider any other than those setting up a want of parties.

This is a bill to obtain a sum of money in court in pursuance •of the decree and order of the court made in a former suit. It is filed, not by a party to that suit or an assignee of or claimant to the share of a party entitled under the decree or order, but by an entire stranger to the fund, claiming the same by right of subrogation to the original security on which the former suit was based.

It is not simply a controversy between the parties to the suit, with the usual assertion, denial and contention of adverse rights and interests, but a contest over a sum of money in the possession of the court, of which it is the custodian for the rightful owner. In the former class of cases the province of the court is simply to adjust the rights and equities of the parties, and its decree cannot affect the rights of anyone not a party to the' suit in the subject-matter of the litigation. In the latter, the court has a duty imposed on it to pay to no one not entitled to the fund, and it should, for its own satisfaction, in order to rightly determine the ownership, see to it that every one who may have an interest therein is properly before the court with opportunity to establish his rights, and, if not otherwise concluded, contest those of other claimants. Nor should the inquiry in such cases be limited to those who have a direct interest in the money in court, but should also embrace those whose rights thereto are contingent. This bill is called an original bill in the nature of a supplemental bill, but it also partakes somewhat of the nature of a bill of review, for it seeks to give a direction to the surplus money different from that indicated in the original decree and the order made at the foot of the decree. When that is the purpose of the suit, not only every one who has an interest in the fund sought, but those who have an interest in the effect of the decree, should be made parties. Every One who was a party to the decree, and who still may have an interest therein, must be a party to a bill of review. Ludlow v. Macartney, 2 Bro. P. C. 107.

It is argued, on the other hand, that as the fund in this case is not large enough to satisfy the second mortgage and judgment controlled by Mr. Headley, to whom the whole fund will, by the decree and order, go if the complainant is not entitled to it, it is necessary to make only Mr. Headley a party, he being the only one other than the complainant who can have an interest in the fund in controversy. This is not, however, the rule; Chancellor Zabriskie, in Van Keuren v. McLaughlin, 6 C. E. Gr. 163, which case was overruled, but on another point, in 6 Stew. Eq. 287, says (at p. 165): “ The rule laid down by Story Eq. Pl. § 72, that ‘it is not all persons who have an interest in the subject-matter, but, in general, those only who have an interest in the object of the suit, who are ordinarily required to be made parties;’ and by Calvert, in his treatise on Parties to Suits in Equity p. 10, ‘ the propriety of a person being made a party depends upon his interest, not in the subject-matter, but in the object of the suit,’ has been the rule adopted and acted upon in this state.” And Lord Lyndhurst says, in his judgment upon the case of Small v. Aitwood: “The general rule is that all persons who are interested in the question must be parties to a suit instituted in a court of equity.” Calvert p. 9. And at p. 10, the word “ interest ” when used as a criterion of the proper ■ parties' to a suit, means interest in its object, and not interest in its subject-matter. Applying that rule it would seem clear that not only those who, under the decree and order would possibly get some part of the money, are necessary parties to a suit of this character, but also those whose interests as established by the decree or order would be affected by its modification. If the Schwabs, defendants in the original suit, are liable on the second mortgage or judgment held by Headley, as they may be, they have 4an undoubted interest in having this money appropriated to the payment of those encumbrances. It is no answer to say that it does not appear that they are liable if, as before stated, the court, for its own protection, will see to it that every ■ one whose interests may be affected is brought in. It should appear that in no event resulting from the suit can such interest' be jeopardized. Besides, the right of the complainant to the relief sought rests on the allegation that the policies of insurance were forfeited by the acts or neglect of the Schwabs. If. the policies were enforceable by the Schwabs, the complainant has no right to the fund in court. No such issues were presented in the foreclosure suit and its decree does not touch such questions. , How can those questions, with the possible interest of the Schwabs referred to, be litigated and determined unless they are made parties and have an opportunity to be heard ?

"What has been said as to the Schwabs as owners of the fee,, may also be said as to F. Butterfield & Co. Counsel, on the argument, treated their conveyance as a mortgage, but it is said in the bill to be an absolute deed on its face, and if so, that firm 'may be liable on the second mortgage and interested in having the fund applied to its payment.

I am unable to find and have not been referred to any case in point, but I am of opinion that in cases of this character involving the payment by the court of surplus moneys, all parties-to the former suit, except those who, it clearly appears, cannot be interested in the disposition of the fund, should be made parties to the proceeding.

I think it appears that the original complainant has been paid in full, and no disposition of the fund in court can possibly affect its interests.

The demurrer is sustained so far as relates to want of parties, with leave to complainant to bring in the parties indicated.


source: Caselaw Access Project

author: Green, W. C.

license: Public Domain

text:
    In re Sarah M. Devausney, alleged to be a lunatic.
    1. The court of chancery has jurisdiction to issue a commission de lunático inquirendo if the alleged lunatic, though non-resident, has real estate in this state, and if necessary appoint a receiver.
    2. The provisions of the statutes {Rev. p. 60S % $; P. L. of 1890 p. 507) are, however, so ample and the procedure so simple that recourse should be had to the remedy thereby provided, unless there are insurmountable reasons for not doing so.
    An inquisition has been returned into this court finding that Sarah H. Devausney was, at the time of taking the inquisition, a lunatic and of unsound mind, so that she is incapable of the-government of herself, her lands, tenements, goods and chattels, and that she has been in the same state of lunacy for the space-of twenty-five years last past, and that, at the time of the said inquisition, she was entitled to a one equal seventh part of the-personal estate of her father, Jacob S. Wanness, deceased, and also seized of and entitled to a one equal seventh part of two tracts of land in Hudson county, in this state.
    The petition on which the inquisition was issued was filed by Andrew Devausney, of the city of New York, State of New York, husband of the alleged lunatic. It states that, by the will of Mrs. Devausney’s father, she is entitled to an equal seventh part of real and personal estate in New Jersey, and that she was, at the time of filing the petition, an inmate of the Bloomingdale asylum for the insane, in the State of New York.
    The jurisdiction of the court is brought in question.

      Mr. Thomas S. Henry, for the petition.
   Green, W. C.

The jurisdiction of the court to institute the ‘proceedings de lunático inquirendo is challenged on the ground that, although the alleged lunatic is seized of and entitled to real and personal estate in New Jersey, she is not a citizen of or resident in this state, but is a citizen of and resident in New York.

In Matter of Perkins, 2 Johns. Ch. 124, Chancellor Kent directed a commission to issue to inquire into the alleged lunacy of Daniel Perldns, of Bridgewater, in the State of Massachusetts, who was stated in the petition to be the owner of lands in New York, the chancellor saying: “There is no doubt, from the case Ex parte Southcote, Amb. 109, that a commission of lunacy may issue against a person resident abroad.”

In Matter of Petit, 2 Paige 174, Chancellor Walworth directed a commission to issue in the case of an alleged lunatic, who was a resident of Wilton, in the State of Connecticut, and who was stated in the petition to be entitled to real and personal property in New York.

In Matter of Ganse, 9 Paige 416, the alleged lunatic had resided in Fishkill, New York state, whence, in a state of mental aberration, he had gone to some place unknown, leaving personal property in care of his brothers, in Dutchess county. Chancellor Walworth said that, “since the decision of Lord Hardwicke, in Southeote’s Case, there can be no doubt of the right of the chancellor to issue a commission where the lunatic has lands within his jurisdiction, although the lunatic is himself domiciled abroad.” It did not appear that Ganse had real estate in New York, but it did appear he had personal property therein ; that, as he had left his residence in Fishkill, in- a state of mental aberration, it was wholly improbable he could have established any legal residence out of the state since that time, and he must, therefore, be considered-still a citizen of the State of New York and a resident of Fishkill, and the chancellor directed a commission to issue to be executed in that town.

In Matter of Fowler, 2 Barb. Ch. 305, the alleged lunatic resided in Ohio. Chancellor Walworth held that it must appear by the petition, in case the alleged lunatic was non-resident, that he owned property in the state, saying “the court had no jurisdiction to issue a commission unless the alleged lunatic resided here or was the owner of property in this state.”

In In re Child, 1 C. E. Gr. 498, Chancellor Green (at p. 499) says: “A commission may issue when the alleged lunatic is a non-resident or temporarily absent from the state, and when it is impossible for the jury to see him,” referring to the cases before mentioned. It is true that the question before the chancellor was only in what place the commission should be executed, the alleged lunatic being actually in the state lunatic asylum in Trenton, and his former domicil being in Morris county, but his statement shows what he considered decided by Ex parte Southeote and the other cases.

The jurisdiction is recognized in Shelf. Lun. 86; 2 Barb. Ch. Pr. 230; 2 Hoffm. Ch. Pr. 251; Blake Ch. Pr. 444; Dick. Ch. Pr. 610, note.

It is urged that all the American authorities cited rest on the ease of Ex parte Southcote, Amb. 109; S. C., 2 Ves. Sr. 401, and that the lord-chancellor granted the commission in that case because the alleged lunatic was a subject of Great Britain, resident abroad, but having an estate in England. I do not think an examination of the case shows that this was the ratio decidendi. It is presumptively true that Southeote was a British ■subject, and Lord Hardwicke did say “there can be no good reason why, if any subject having an estate in England happens to be an idiot or lunatic, but is out of the kingdom, there can be no inquiry here,” but I do not understand that the fact that the alleged lunatic was a subject’was the sine qua non for instituting the inquiry. The jurisdiction, in granting the inquiry in cases of lunacy, was not at that time in the court of chancery or the lord-chancellor as chancellor, but in him as the person having, under the special warrant of the crown, the right to •exercise the duty of the crown in’ the care of the persons and estates of idiots and lunatics. Sherwood v. Sanderson, 19 Ves. 280. This care the crown had by virtue of its prerogative, but it was a right which was never exercised except upon a previous office (or inquisition) found, and for the purpose of its exercise, the crown, by sign manual, delegated its authority to its own great ■officer, not necessarily, but usually, the lord-chancellor. Elm. Pr. Ewn. 1. The duty was not only as to the person, but also as to the estate of the idiot or lunatic. As to the person, it was the ^ame as to each class, viz., to care and provide for safety and maintenance out of the estate of the idiot or lunatic; as to the ■estate, it was different in. this respect: in the case of a lunatic, the crown, as a trustee, had the duty only of taking charge of the person and property for the exclusive benefit of the lunatic and his estate, while in eases of idiocy it had both a trust and an interest, having the right to take, if it pleased, the profits of the estate after making adequate provision for the necessary comforts of the idiot and his family. Elm. Pr. Lun. 8; Re Fitzgerald, 2 Sch. & L. 432, 435; Shelf. Lun. 10, 11. An alien ■.could take a fee by purchase, but he could not hold it against the king (Cb. Litt. 8 a, 8 b), but the estate purchased by an alien did not vest in the king until office found, until which the alien was seized, and could sustain actions for injuries to his property. Page’s Case, 5 Coke 52 b; 2 Bl. Com. 293, ch. 19 § 5 p. 114. If an estate in England belonged to a lunatic who was a non-resident subject or alien, the care of it for the lunatic and its preservation was still the duty, so to speak, of the crown, which, however, was not to be exercised until such lunacy was ascertained by the finding of a jury under a commission de lunático. The finding-of a commission in another jurisdiction could not be made effective as to property not in that jurisdiction without statutory authority. In re Duchess of Chandios, 1 Sch. & L. 301; Re Houstoun, 1 Russ. 312; Re Perkins, 2 Johns. Ch. 124. So that^ if no commission could issue in the jurisdiction of the estate, the owner being non-resident, no lawfully-appointed care-taker of the property could be secured. The doubts as to the case which Lord Hardwicke expressed in In re Southcote, as stated in the report in Ambler, arose from matters of practice, and were whether he should issue the commission, first, because the comsioners and jury were entitled to inspect the alleged lunatic and examine him either before them or by a committee, which was-impossible, as Southcote was in a foreign country; and next, be- . cause the general rule was that the commission should be executed by a jury of the county of the residence of the alleged-lunatic, which was impracticable, as he was resident in a foreign country, bitt he resolved these doubts by directing the commission to be executed at the mansion-house, the former residence, saying, “No mischief can follow from the granting a commission, for if the jury are satisfied without inspection they will find so; if not, they will not make a return, or will return that it does not appear to them that he is an idiot or lunatic.”

This examination of the law and case, in my judgment, demonstrates that In re Southcote is an authority for issuing a com.mission when the alleged lunatic is non-resident, if he or she owns an estate within the jurisdiction.

The chancellor, in In re Farrell, 6 Dick. Ch. Rep. 353, gives the-origin and history of the jurisdiction formerly exercised by the lord-chancellor of England in respect of commissions de lunático■ inquirendo, and traces the legislation of this state from 1794 to-the present time. The result of that legislation is that the jurisdiction formerly exercised by the lord-chancellor under the-authority of the sign manual has been vested in the court of chancery.

The duty of the care and safe-keeping of the person and property of idiots and-lunatics imposed on the chancellor by the-act of 1794 (Pat. L. p. 185), was transferred by the act of 1804 (Bloomf. L.p. 117) to a guardian to be appointed by the orphans court of the county in which the lunatic resided. That act, as-well as the law as it now stands, required that on the return of the inquisition, if the party was found non compos mentis, a copy of all proceedings had thereon was to be transmitted to the orphans court of the county in which the lunatic resided, which court was authorized and directed to appoint such guardian. It is apparent that no,orphans court other than that of the domicil has jurisdiction to appoint a guardian for a person so found a lunatic, and that the statute in that regard is inoperative with-respect to a non-resident lunatic.

But the inquisition having been returned that the person is-non compos mentis, this court may still, if necessary, provide for the care and preservation of his or her estate by the appointment of a receiver on a proper application for that purpose.

The court has long exercised the power of appointing a receiver or temporary committee to care for the-estate of a lunatic. In re Dey, 1 Stock. 181. This has been done, generally, pending-judicial proceedings, on the ground that there is no person entitled to the property who is, at the same time, competent to hold and manage the estate. 3 Pom. Eq. Jur. § 1332. Kerr Bee. 135 says: “ The case of lunatics is the only exception to the rule that a receiver will not be appointed unless a suit is-pending.”

In Ex parte Whitfield, 2 Atk. 315, Lord Hardwicke, as to the-appointment of a receiver of an infant’s estate, no suit being pending, says: “ The cases of idiots and lunatics has been insisted on as a similar case, but the jurisdiction which the court exercises with respect to them is a particular one and therefore not like the present.” See, also, Ex parte Warren, 10 Ves. 622; Ex parte Radcliffe, 1 Jac. & W. 680; Kerr Rec. 113; Shelf. Lun. 186.

It is, however, a jurisdiction which the court seldom exercises, and only when it seems necessary for the protection and care of the estate of the lunatic.

The statutes of this state have made ample provision for the •care of the estates of non-resident lunatics by the appointment of a guardian by the orphans court of the county in which the property of the lunatic may be, or by the ordinary in certain ciases, on presenting and filing an exemplified copy of the proceedings upon an inquest or finding of idiocy or lunacy in the •domicil of the lunatic according to the laws of such residence. Rev. p. 602 § 2; P. L. of 1890 p. 507. In my judgment, these ■provisions are so full, and the procedure so simple, that recourse should be had thereto unless there are insurmountable reasons for not doing so. But these provisions of the statute do not •oust this court of its jurisdiction to issue the commission, and this return should be filed with the clerk, to be proceeded on as •occasion may require.


author: Green,. Y. C.

text:
    Sandford Hawkins, executor &c., v. William H. Young et al.
    Testatrix’s direction to her executor to sell her house and lot in N., and oht ■of the proceeds pay certain legacies, empowers him, in the light of evidence that she owned no realty except a house and lot-in B., a suburb, of N., to sell and make title to the B. property.
    On bill, answer, replication and proofs.

      Mr. Osear.. Naundorff, for the complainant.

      Mr. Charles F. Herr, for the defendant Young.
   Green,. Y. C.

This suit is brought by Sandford Hawkins,, sole executor of 'the last will and testament of Sophia Stiles, late of Milford, in the State of Connecticut, deceased, against William H. Young, for the specific performance of a contract in writing between them for the sale and purchase of a house aud lot in Bloomfield, Essex county, New Jersey.

The property belonged to the' testatrix. Mr. Young declined to accept the deed therefor executed by the complainant, on a question raised as to the power of the executor to convey the premises.

The testatrix, by her will, having given five pecuniary legacies, amounting in all to $2,000, provided by the eighth clause of the will as follows: “ I direct my executor to sell my house and lot in said Newark and to apjply the proceeds thereof in payment of the above pecuniary legacies.” By the ninth clause all the rest, residue and remainder of her estate she gave to four of the legatees or the survivor of them.

It is a rule that in order to discover the intention of the testator the court may put itself in the place of the party, and then see how the terms of the will affect the property or subject-matter, and for this purpose evidence outside the will is admissible to show the nature and extent of his property. Leigh v. Savidge, 1 McCart. 125.

Evidence was given that the testatrix had once lived in Newark, but at the time of executing her will she had for some time been a resident of Milford, Connecticut. Some eight years before her death she had purchased the house and lot in Bloomfield, which is a suburb of Newark; that she had no other real-estate and had never owned a house and lot in Newark. Her personal estate amounted to a little over $800.

It is clear from the will that it was the intention of testatrix—

1. That the pecuniary legacies were to be paid from the proceeds of the sale of her house and lot.

2. To empower her executor to sell her house and lot.

She had no house and lot in Newark, and in locating it there there -is a misdescription. But by striking out the words misdescribing it, viz., “in Newark,” we have left a power of sale of her house and lot. If she had had more than one house and lot,, the intention of the testatrix could not have been ascertained by ■eliminating the words “in Newark,” but as she had but the one, viz., the one in question, her intention to refer to it seems to me to be clear. In the case of Patch v. White, 117 U. S. 210, the testator had devised lot No. 6, in square 403, with the improvements thereon. He did not own that lot, but did own lot No. 3, in square 406. The latter was improved, the other not. He had disposed of all the rest of his estate, and the court, disregarding the misdescription, determined there was enough in the circumstances with the remaining words to show that it was his intention to devise the property he did own. See, also, Decker v. Decker, 121 Ill. 341, and cases in Brown Par. Ev. tit. Wills.”

I incline to the opinion that the other evidence offered is not ■admissible, under the authority of Miller v. Travers, 8 Bing. but it is unnecessary to decide the point.

I am of opinion that the executor has power under the eighth clause of the will to give a good title to the testatrix’s house and lot in Bloomfield.

Assuming that all parties in interest have been made parties to this suit, such deed will give the parties a merchantable title.


author: Gjkeen, y. C.

text:
    Lady Lincoln Lodge et al. v. William G. Faist et al.
    A subordinate lodge of an order, the aim of which is “to unite fraternally all acceptable persons,” may appropriate, for the support of a lodge to be organized under the same jurisdiction, part of a fund raised among its members by contribution, out of which its general expenses and sick benefits are payable, if such appropriation is not prohibited by its by-laws or the general laws of the order.

      Mr. William D. Daly and Mr. J. Frank Fort, for the complainants.

      Mr. Samuel Kaliseh, for the defendants.
   Gjkeen, y. C.

Lady Lincoln Lodge, No. 702, Knights and Ladies of Honor, Hoboken, New Jersey, is a voluntary association. It is organized under the jurisdiction of the Grand Lodge of the State of New Jersey. The order of fraternal societies known as the Knights and Ladies of Honor has its fountain-head in a Supreme Lodge which was incorporated under the laws of Kentucky, April 1st, 1878, a supplement to the act of incorporation being approved December 14th, 1881; also by act of incorporation under the laws of Missouri, in 1885, and under the laws of Indiana, in 1891.

The objects of the corporation, as stated in section 2 of its articles of association filed in the department of the State of Indiana, is to unite fraternally all acceptable white persons, male and female; to give all possible moral and material aid in its power to its members and those depending on its members by holding moral, instructive and scientific lectures, by encouraging each other in business and by assisting each other to obtain employment; to care for the sick and distressed and to promote benevolence and charity by establishing a relief fund by contributions from members of the Order of Knights and Ladies of Honor, from which, upon satisfactory evidence of the death of a member of said order who is a contributor to said fund at the time of his or her death, and who has complied with its lawful requirements, a sum not exceeding $5,000 shall be paid to such member or members of his or her family, person or persons dependent on or related to him or her, as he or she may have directed; to provide for creating a fund for the relief of sick and distressed members, and to ameliorate the condition of humanity in every possible manner.

The constitution provides for the establishment of Grand Lodges in the different states, and for the organization of subordinate lodges under the jurisdiction of the respective Grand Lodges. '

What is known as the relief fund is made-up of contributions of the members to the lodges, and is exclusively within the management and control of the Supreme Lodge, and is of the-nature of a classified insurance, to which the appointee of the member is entitled on the death of the member.

There is another fund, which, as I understand the constitution and laws of the order, is within the control and management of the respective lodges, being raised in each lodge by contributions from its members or donations made thereto. This fund is called the “ general fund ” of the particular lodge, and from it are paid the general expenses of the lodge and benefits-which the lodge may by its by-laws prescribe to be paid to members disabled by sickness or other disability from following their usual business or occupation.

Over this general fund of each lodge no one has any authority or power of disposition except the particular lodge to which it belongs, and such lodge is undoubtedly controlled in such disposition by any restrictions which may be prescribed in the bylaws of such lodge, and generally that it should be for some-purpose tending to carry out the general objects of the order, for it must be assumed that every contribution made by a member to the funds of the lodge has been made on the faith that it will be appropriated in no other way. Abels v. McKeen, 3 C. E. Gr. 462.

On January 13th, 1892, Lady Lincoln Lodge, at a regular meeting (five members, by the by-laws, being a quorum for business), by a vote of seventy-six in the affirmative and twenty-six in the negative, adopted a motion that $1,500 of the general fund be turned over to our trustees, H. Roehm, H. Siemer and William G. Faist, for the purpose of supporting and organizing a new lodge of Knights and Ladies of Honor,” and subsequently a motion to reconsider that vote was lost by a vote of-seventy-six to twenty-one, and on the same evening the officers-of said Lady Lincoln Lodge drew two warrants against the fund-of the lodge to the order of said trustees, one for $1,000 and the other for $500, and delivered the same to the said trustees.

Subsequently, certain members of Lady Lincoln Lodge took their withdrawal cards and organized a new lodge in Hoboken under the name of the De Forest P. Lozier Lodge, No.-, of the Knights and Ladies of Honor, it being a lodge of the same order and under the jurisdiction of the Grand Lodge of New Jersey, and the trustees above named, on the 24th of February, 1892, paid over the $1,500 to the secretary pro tem. of that lodge for the purpose of organizing and supporting it, taking a receipt specifying that as the object of such donation.

Some eighty-six of the three hundred and eighteen members of the Lady Lincoln Lodge withdrew from it and organized, or became members of, the De Forest P. Lozier Lodge.

After this steps were taken in the Lady Lincoln Lodge to annul its former action, and notice was given to Roehm, Siemer and Faist to return the money, but they claim that such notice was not served upon them until after they had paid it over to the representatives of the new lodge. Thereupon this suit was brought against Roehm, Siemer and Faist, and the De Forest P. Lozier Lodge, to recover the amount.

Before paying the $1,500 over to the new lodge there was in 'the bank account of the Lady Lincoln Lodge $3,200.

On the principle that trust funds, when they have been'diverted from the purposes of the trust, may be followed and recovered, so long as they may be identified, I think this action may be maintained if there has in fact been an improper disposition of the funds of Lady Lincoln Lodge. The money is still intact, and there is no dispute but that $1,500 of the general fund of the new lodge represents the amount of the donation which was made to it by the old lodge through Messrs. Roehm, Siemer and Faist.

This raises the question whether there has really been any improper diversion of the general fund of Lady Lincoln Lodge. In the first place, it has been appropriated for the organization and maintenance of another lodge of the same order, organized under the authority of the original charters and general constitution and laws of the Supreme Lodge, and under the jurisdiction of the Grand Lodge of the state. It is therefore appropriated to.carrying out and enforcing the general objects of the order. This, however, is not conclusive if it is an expenditure prohibited by the general laws of the order or the by-laws of the lodge. The general laws only require that part of this fund be devoted to the payment of the sick benefits to which members may be entitled. The by-laws of the Lady Lincoln Lodge provide (art. 3, par. 2) that the quarterly dues are fixed at $1.50 per quarter, of which the lodge physician is to receive $50 per quarter for the free treatment of the members. Art 4, par. 1. Members not in arrears for dues, fines &c., and being members of the lodge for six months previous, who shall become sick, shall receive the weekly sum of $5 per week; should, however, the funds of the lodge become less than $1,000, then the lodge shall say w'hat weekly amount shall be paid. Par. 2. If a member should draw sick benefits for twenty-six 'weeks, then the lodge shall determine what further, if any, benefits shall be paid. Art. 7, par. 1. As to the funeral of a deceased member —the lodge shall furnish two coaches, which shall be paid from the lodge funds; outside of Hoboken one coach will be furnished, and a suitable floral tribute by the lodge. Art. 10, par. 1. The two secretaries shall receive $100 per year for their work, payable quarterly.

These- are the only provisions of the by-laws which relate to the expenditure of the lodge funds. There is no provision of the by-laws that the general fund of the lodge shall be appropriated to these purposes and none other. The provisions are simply that these payments are to be made, without reference to the fund from which the money is to be drawn, with the exception of the salaries of the lodge physicians. If the by-laws had provided that the geueral fund, which I understand to include the funds of the lodge other than those which the lodge must contribute to the Grand and Supreme Lodges, should not be appropriated to other than certain specified purposes, the case would then come within the rule laid down by the chancellor in the case of Abels v. McKeen. In that case the fund had been •contributed for a specific purpose, and the purpose having been accomplished by the expenditure of a less amount than the sum raised, the court held that the trustees, in whose hands the money had been placed, had no right to expend it for any other than the specified purpose, and should repay the balance proportionately to the original contributors.

The by-laws, by pledging the lodge to certain payments, in •effect charged those payments on its general fund as the only one to which it had recourse, but this action does, not devote and appropriate all the general fund to such specified purposes, and prohibit its use for other objects.

If the general fund of Lady Lincoln Lodge had been so low that this donation seriously crippled the finances of the lodge, and rendered it unable to make the payments which were specifically charged upon the general fund, or if the money had been donated to an object not contemplated by the organization, such action would fall within the principle of the case referred to. But there.is no contention that, after this withdrawal of $1,500, there was not a sufficient amount in the general fund to meet all payments for the purposes specified in the by-laws, and, as before shown, the appropriation was for the furtherance of the objects of the order.

I am therefore of opinion that it cannot be held that the resolution of Lady Lincoln Lodge contributing $1,500 to the organization and maintenance of the new lodge, was a diversion of the fund to an improper or unwarranted purpose, and will advise That the bill be dismissed.


author: Green, V. C.

text:
    Catharine Collignon, executrix &c., v. Sarah Collignon.
    In an action to foreclose a mortgage executed- by complainant’s husband and-another, and assigned to complainant, complainant testified that her husband, mutilated it without' her consent, and by mistake. The mortgagors subsequently executed an agreement reciting that the mortgage had been mutilated through mistake, and declaring that no advantage would be taken of it, and" thereafter interest was regularly paid on it. — Held, that it was yalid as against a judgment creditor of a subsequent owner of the premises mortgaged, though. the agreement was not recorded, the mortgage never having been canceled of record.
    On bill, answer, replication and proofs in open court.

      Mr. William, M. Johnson, for the complainant.

      Mr. Sherrerd Depue, for the defendant.
   Green, V. C.

This bill is filed by Catharine Collignon, sole surviving, executrix of the last will and testament of Nicholas Collignon, deceased, late of the county of Bergen, to foreclose two mortgages, one dated November 22d, 1884, made by Claudius O.'. Collignon upon certain property in Bergen county to secure the payment of $17,710 on the 22d day of November, 1889, with interest at six per cent.

It is conceded that the complainant is entitled to a decree on this mortgage.

The second mortgage was given to secure the bond of Nicholas Collignon to one John J. Demarest, conditioned to pay $1,000' within one year from date, with interest at six -per cent. Both the mortgage and the bond were dated April 4th, 1862. This mortgage was made by Nicholas and Claudius O. Collignon to - John J. Demarest upon two tracts of land, the first of which - ■was included in the first tract described in complainant’s first-mentioned mortgage. The bond and mortgage were assigned ■by John J. Demarest to complainant by deed of assignment dated April 5th,. 1862, and recorded May 22d, 1862. It is to the enforcement of this mortgage that objection is raised by the Clinton bank, a judgment creditor of a subsequent owner of the .premises. The bill alleges that, by inadvertence and mistake, said bond and mortgage, although not paid or satisfied, were mutilated by tearing off the seals and part of the signatures.

The bond and mortgage were presented in evidence by the complainant. The bond is mutilated by having the lower right-hand portion of the first page torn off, which destroyed the seal and the signature except the letters “ Nicholas.”

The mortgage has been similarly mutilated by leaving off the ■signature the Christian name Nicholas, the letter “C” of the surname, and the letters “Clau” of the signature of Claudius. The signatures of Nicholas and Claudius O. Collignon and of Garret S. Demarest, the subscribing witness, all of whom are dead, were proven on the trial.

This mortgage is registered in' the clerk’s office of Bergen ■county, May 22d, 1862, in Book Q, of Mortgages, page 295.

The bond has endorsed upon it payments of interest “ in full to date” on May 1st, 1869, and on May 1st in every year from 1873 to 1884, when follows this endorsement, “Interest on this bond has been adjusted to the 22d of November, 1884,” signed “ Catharine Collignon.”

After this there are receipts of interest of $50 each, the rate •of interest apparently having been changed, under the date of November 22d in each year from 1885 to 1891.

The mortgage has not been canceled of record.

The complainant, who is the only living witness, says that she ■saw her husband tear the seals off these papers, but that she did not consent thereto, and has never received the amount of the bond and mortgage. She says, substantially, she does not know the date on which the seals were removed, but that he was looking over some papers at the house, she thinks, in the evening; •that,he kept his papers in the living-room in a safe; that he had just come back from Squire Demarest’s, and had been fixing-some other papers he had there in his hand. She does not know what he intended to tear. She was sitting beside him looking at the papers; that there were some papers that had to be tom off; that he had some papers from the squire’s, and that he said some papers had to be canceled and sent to Hackensack, and that he tore the wrong ones. The testimony of the complainant as to details of the transaction, it must be admitted, is somewhat confused, and her memory of all the incidents, in a measure,, misty, but it must be remembered that she is a lady of advanced years, not accustomed to attending tq business and that she is speaking of an event which happened from twenty-five to thirty years ago. But I think she is sufficiently corroborated by writings and subsequent actions of the parties.

An agreement was offered in evidence, dated January 18th,. 1868, executed under the signatures and seals of Nicholas and Claudius O. Collignon, their respective signatures and that of the subscribing witness being proved. It recites the making of the mortgage to John J. Demarest, and that the bond and mortgage, although not paid or satisfied, have been inadvertently, and through mistake, mutilated by tearing off the seals and part of the signatures; that said parts so torn off have been lost and cannot be found to be replaced ; that in order to have the said bond and mortgage remain in full force and effect,, and to have said mutilation explained and remedied; it witnesseth that the said Nicholas Collignon and Claudius O. Collignon do thereby covenant and agree to pay and fulfill the conditions and responsibilities mentioned and required to be done and performed by them according to the conditions and- requirements mentioned in said bond and mortgage; that no advantage will be taken of the mutilation above mentioned, and do thereby bind themselves and their heirs, executors and administrators, for the due performance of the agreements and the conditions stipulated to be done and performed by them in and by said bond and mortgage, notwithstanding said mutilation. This •document has the appearance of age, and bears- an- internal revenue stamp of the United States, canceled with the initials “N. C.,” under date of January 18th, 1868.

Nicholas Collignon, the husband of the complainant, died in June, 1879, leaving a last will and testament, which was proved by his widow Catharine and his brother Claudius, the executors. By an agreement, dated November 22d, 1884, between Claudius O. Collignon and the complainant, as executors of Nicholas Collignon, deceased, and the said Claudius O. Collignon, of the second part, it was agreed, as part of the settlement of the affairs of a partnership existing between Nicholas and Claudius, that the said executors should convey to said Claudius certain lands therein described, being the lands mentioned in the mortgage first mentioned, and which include the property embraced in the mortgage made to John J. Demarest, and that part of the consideration thereof was that Claudius O. Collignon was to assume and pay the said mortgage for $1,000 given by himself and Nicholas Collignon to John J. Demarest, and then held by Catharine Collignon. It is not disputed that, in pursuance of that agreement, the executors, by deed dated November 22d, 1884, conveyed to Claudius all the interest and estate of said Nicholas in the lands, subject to the said mortgage, payment whereof was assumed by Claudius.

Claudius O. Collignon departed this life April 17th, 1891, leaving complainant sole surviving executrix of the estate of Nicholas. Claudius left a will by which he gave and devised the whole of his estate, after certain specific legacies, to his wife, Sarah Collignon, and appointed her sole executrix. . Sarah Collignon, by deeds dated April 1st, 1892, conveyed part of the premises to Peter C. Collignon, such deeds being made expressly subject to the lien of both of said mortgages, payment whereof was assumed by the grantee.

The bill makes the Clinton bank a defendant on the allegation that the Clinton bank, on March 21st, 1893, recovered a judgment in the New Jersey supreme court against Sarah Collignon for $4,227.92, and that, on April 17th, 1893 another judgment was recovered by it against her in said court for $6,433.66, and that, subsequently, said bank exhibited two bills of complaint in this court against the said Sarah Colliguon and Peter C. Collignon, alleging that the aforesaid conveyances from Sarah to Peter were fraudulent and void as against the creditors of said Sarah, and praying to set the same aside; that notice of the pendency of the first of these suits was filed in the office of the clerk of Bergen county March 29th, 1893, and notice of the second on May 19th, 1893.

The Clinton bank resists the allowance of the one-thousand-dollar bond and mortgage on the ground that, by their mutilation, they were destroyed as valid and existing encumbrances on the property; that the subsequent paper .did not revive them as against a judgment creditor because it was not acknowledged and recorded; that there is no clear evidence that the mutilation was by mistake, but if so, that it was an act of complainant’s agent of such gross negligence that a court of equity will not relieve against it.

I think the evidence does establish that the mutilation of the bond and mortgage was a mistake on the part of Nicholas Collignon ; that he intended to cancel some other papers, and by mistake tore the seals and part of the signatures off those in controversy. The testimony of the complainant, the subsequent agreement of the two mortgagors, reciting the mistake and attempting to rectify it, the assumption of the payment of this mortgage by Claudius and the payment regularly of the interest, in m-y judgment leave no room for doubt on this point.

There are many cases in which the court has said that equity will not relieve against a mistake resulting from the complaining party’s own negligence. In most of the cases this was a declaration not subject to criticism with reference to the facts under determination, but it is not to be accepted as a canon of universal application. Professor Pomeroy, in 2 Pom. Eq. Jur. § 856 and notes, vigorously disputes the correctness of any such contention. Chancellor Green, in Banta v. Vreeland, 2 McCart. 103, which was a suit brought to foreclose two mortgages, one of which had been, by mistake, surrendered by the complainant to the defendant and canceled of record, says (at p. 107) of the rule referred to: “The principle is usually applied in relieving against contracts entered into under a mistake, although it is doubtless susceptible of a wider application. The present case, however, does not fall within the operation of the principle. The complainant received no consideration for the act, and defendant gave none. The complainant entered into no engagement from which he asks relief. Under a mistaken impression that the mortgage was satisfied, he consented to its cancellation. It is clearly against conscience that the defendant should avail himself of the mistake to escape the payment of an honest debt.”

If Nicholas or Claudius Collignon had sought to take advantage of the cancellation of this bond and mortgage under the circumstances proved, without its having been paid and satisfied, then the attempt would have been a fraud, on their part, upon the mortgagee, which this court would not have lent its aid to perpetrate. But they did no such thing. They attempted, as far as was in their power, to rectify the mistake. The document which they signed is not to be regarded as a mortgage requiring .acknowledgment and record to make it effective against judgment creditors and subsequent mortgagees and purchasers. They already had notice of the mortgage by its record, which was not canceled. The agreement was a solemn admission by them, under seal, that the mutilation of the bond and mortgage was • done through a mistake of fact as well as a promise to pay the amount intended to be secured thereby. It was an attempt to rehabilitate the former instrument. Tearing off the seals and part of the signatures by mistake, however, did not, in equity, •destroy the enforceability of the instruments. It is in the power of the court, even when the record has been canceled, to annul the cancellation and enforce the debt by the foreclosure and sale of the mortgaged premises. Banta v. Vreeland, supra. In this • case the bond was afterwards recognized by the payment of inter-. est, and when Claudius O. Collignon, after the death of his brother and partner, Nicholas Collignon, bought the property, he expressly recognized the mortgage as an existing encumbrance and assumed its payment as part of the consideration of the purchase. Claudius, in his lifetime, in the face of these facts, •could not have successfully insisted on the annulment of thesé instruments from their accidental cancellation. Catharine, hisdevisee and legatee, stood in his place. She had no other or-greater rights than her source of title, and her estate was subject to all equities existing against it or him through whom she-claimed. The judgments of the Clinton bank give it no standing in a position which, she would not be entitled to hold.

I will advise a decree for the complainant on both mortgages,.


author: Green, Y. C.

text:
    Sarah M. Hall v. Andrew Otterson et al.
    1. Where a wife and her husband, who was a lawyer-, executed a deed of trust-of her separate property by which he acquired an advantage, the burden is on him to show that she thoroughly understood its 'effect, and where it does not appear that she had independent advice, and the deed was complicated, and a cursox-y reading of it would disclose the scheme of the wife to have been that if neither wife nor husband disposed of the property by will, it should go to the-heirs-at-law of the wife; and such reading would not give the unprofessional mind an idea that, by the words “ or the survivor of them” in the power of revocation, it gave the husband powex', on the wife’s death, to have the fee-vested in him and diverted from her heirs; it is not to be presumed that slxeunderstood its effect from the fact tlxat the acknowledging officer has certified that he made known its contents to hex-. When a power of revocation in such deed is limited in its exercise to the joint action of the husband and wife, the infex-ence is strengthened that the deed was executed by tlxe wife without thoroughly understanding its effect and under a mistake. When these elements-exist such a deed will not be allowed to stand against the heirs of the wife, both she and her husband having died without disposing of the property by • will, and he having after her death revoked the trusts and had the fee vested ¡ in him.
    2. A suit to set aside a deed of trust by reason of mistake, being purely of equitable cogxxizance, is not affected by the statute of limitations.
    3. A suit by the heir of a mai'ried woman to set aside a deed of tnist of her - sepai'ate property by reason of a mistake, which gave the husband power after ■ her death to have the fee vested in him and divei'ted from her heirs, is not barred by acquiescence and laches, except as to such part of the property as. he has sold to bona fide purchasers, where the husband was entitled to the possession of the property for life by the curtesy, and the heir lived with and trusted the husband, and he told her that his wife had given him the property, and promised her that, if she outlived him, she would see that he had done her no wrong, and she brought the suit three months after his death.
    On bill, answer, replication and proofs in open court.

      Mr. Barker Gummere and Mr. William. 8. Gummere, for the complainant.

      Mr. Peter V. Voorhees and Mr. Frank T. Lloyd (of the Philadelphia' bar), for the defendants.
   Green, Y. C.

Samuel Haines, late of the county of Burlington, in this-state, who departed this life about the year 1835, was seized in his lifetime and at his death of a considerable estate, including a farm at Moorestown, N. J., being the lands and premises in controversy in this suit. He left him surviving his widow, since-deceased, and two daughters, Rebecca B. and Sarah M., his only children and heirs-at-law. Sarah M. Haines, on or about the 9th of June, 1849, conveyed all her undivided one-half part in the premises in controversy to one John M. Kaighn, his heirs and assigns, in trust, among other things, to convey all or any part thereof whenever the said Sarah M. Haines, whether feme covert or feme sole, should, in a specified manner, direct-.

Sarah M. Haines, on or about the 27th day of June, 1849, intermarried with one Samuel W. Hall, and on August 31st, 1852, together with her husband, conveyed all her equal undivided one-half part of the premises to her sister, Rebecca B„ Haines, and afterwards, on or about the 5th of December, 1857, John M. Kaighn, trustee as aforesaid, by direction of the said. Sarah M. Haines, granted, ratified and confirmed the aforesaid conveyance of the said undivided half in and to the said Rebecca B. Haines, who, by reason of the said conveyances and! her inheritance from her father, became the sole owner in fee of the premises.

On or about the 1st of October, 1856, Rebecca B. Haines intermarried with one James Otterson, Jr., and on March 2d, 1858, a child was born of the marriage. It lived only twenty-seven days. James Otterson, Jr., was a lawyer of prominence in Philadelphia, and, as the evidence shows, was entrusted by his wife with the entire management of her property and affairs.

February 25th, 1856 — that is, six days before the birth of the child — Otterson and his wife, for a nominal consideration, executed a deed conveying the premises in controversy to James E. Gowen on various trusts.

Mrs. Otterson had considerable other property, real and persona], and I do not think the provisions of the trust deed, other than the clause claimed to contain a power of revocation, are justly open to severe criticism as unreasonable or improvident. It is true that by them the husband acquired control of the wife’s estate during his life, but that is no more than would be expected from a loving and devoted wife to an affectionate and áttentive husband. By the insertion, however, in the clause referred to of the words “ or survivor of them,” he was- enabled to defeat what I think appears to have been the intention of his wife, namely, that the property should, in the event which has happened, descend to those in whose behalf this suit is brought. After the trust, as to the property during the lives of both husband and wife, there follow provisions, which, stripped of their technical phraseology, substantially provide that the wife, at any time during her life, might appoint to whom all or any part of the premises should go after her decease and the decease of her husband ; that if she should not by will so appoint, then he, at'any time during his natural life, might by will dispose of the premises to whomsoever he might choose,* and if neither of them should dispose of the premises by will, then the trustee should hold the farm for the right heirs-at-law of Rebecca, and by good conveyance convey the premises to the said right heirs of Rebecca in fee, in such shares and proportions as the said heirs would have been entitled to had Rebecca died intestate.

Then follows the clause providing for the revocation of the uses and trusts declared in the deed and for reconveyance, but which revocation could only be made by James Otterson, Jr., and Rebecca jointly, during their lives, and by the survivor of them, with the proviso that Otterson, in the event of his surviving his wife, was not to have power to defeat any testamentary devise or appointment which Rebecca might make in her lifetime.

Mrs. Otterson died March 10th, 1863, intestate, leaving her husband, but no issue, her surviving, and the complainant,. Sarah M. Hall, her only sister and sole heir-at-law.

James Otterson, Jr., the husband, took possession of the farm- and continued to occupy it until his death, September 24th, 1890. The deed of trust was not recorded until January 22d, 1864, six years after its date and one year after Mrs. Otterson’s death. Between the time of Mrs. Otterson’s death and the-record of the deed, Gowen, the trustee, on Otterson’s revocation of the trust and demand therefor, made a deed in fee of the premises to James Otterson, Jr., and on February 16th, 1885,. Gowen died. The deed from Gowen to Otterson was also-recorded January 22d, 1864.

Otterson, in his lifetime, conveyed several portions of the property to various individuals, many of whom erected buildings on the parcels so conveyed.

On Otterson’s death a paper was found, signed by him, but not in the presence of witnesses, so as to be effectual as a will-under the statute, by which he attempted to devise the farm in question to the children of the complainant. In consequence of its - defective execution, he died intestate as to the real estate,, leaving no issue, but several brothers and sisters his only heirs-at-law, who thereupon took possession of t-he property, and afterwards, by deed dated November l'3th, 1890, conveyed the premises to Charles H. Otterson in trust, which deed, it seems to be admitted, was made for convenience in making title to the-lands.

Sarah M. Hall, the complainant and sole heir-at-law of Rebecca B. Otterson, brought an action of ejectment three months-after Otterson’s death, and on the 10th of January, 1891, filed, the bill in this cause to set aside the deed of trust.

Otterson died insolvent, so much so that the value of this land 5s necessary to pay his debts, and the contest in the case is therefore practically between the complainant, as the heir-at-law of Mrs. Otterson, and the creditors of James Otterson, Jr.

The deed in question was made prior to the birth of the child •and subsequent to the Married Woman’s act of 1852. Nix. Dig. (4th ed.) 547.

This deed was a voluntary conveyance on the part of Mrs. 'Otterson. She had inherited the property in question from her father, who died in 1835, when she was three years of age. She held it and the rents, issues and profits thereof after her marriage ¡in 1856, under the act of 1852, “ as her sole and separate property, as if she was a single female.” At the time of the conveyance attacked her husband had no present estate in her lands.

He was not tenant by the curtesy initiate, not only because the act of 1852 prevented his acquisition of that estate (Porch v. Fries, 3 C. E. Gr. 204), but also because no issue of .the marriage had yet been born alive, nor, for the same reason, had he “ obtained an inchoate right which, on his wife’s death, he surviving, would bloom into a freehold.” Insurance Co. v. Bartracliff, 16 Vr. 543, 550.

In Shurmur v. Sedgwick, 24 Ch. Div. 597, Vice-Chancellor Bacon held that the relinquishment of a possible estate by the •curtesy did not render a deed of settlement voluntary and void as against a mortgage under 37 Eliz. c. J § A

Speakman v. Tatem, 3 Dick. Ch. Rep. 136; affirmed on appeal, 5 Nick. Ch. Rep. 484, recognizes that the husband has some inherent marital rights in his wife’s estate, which are not defined, which he may relinquish in a deed of settlement, of sufficient moment to give him the right to hold the trustee to the discharge of his duty.

But in this case any such interests were not given np.by Mr. •Otterson, who, by the terms of the trusts, secured for his life every right in his wife’s property which he could possibly have ■exercised over it as her husband.

The rule of equity that “he who bargains in a matter of advantage with a person placing confidence in him, is bound to •show that a reasonable use has been made of that confidence ” (Gibson v. Jeyes, 6 Ves. 266), applies with peculiar force to a transaction by which a husband secures from his wife a portion •of her estate. The most dominant of all relations is that of the husband over the wife. There are, of course, exceptional cases when the will of the woman may control. The relation is so close, the trust of the wife so absolute, her dependence so entire, it may be her fear so abject, while the dominion of the husband is so complete, his influence so insidious yet so controlling, that equity regards all such transactions with a jealous care, and subjects them to the severest scrutiny. The greater the affection the more submissive the dependence, the stronger the trust the more liable is the wife to be subject to the control of the husband, and the more vigilant should the court be in protecting the weak. Farmer, Executor, v. Farmer, 12 Stew. Eq. 211, 216; May Fraud. Conv. (T. B. S.) 483; Black v. Black, 3 Stew. Eq. 215, 219; Boyd v. De La Montagnie, 73 N. Y. 502; Weeks v. Haas, 3 Wils. & S. 520; Campbell’s Appeal, 80 Pa. St. 298; Darlington’s Appeal, 86 Pa. St. 512; McRae v. Battle, 69 N. C. 98; Witbeck v. Witbeck, 25 Mich. 439; Smyley v. Rees, 53 Ala. 89; Shaffer v. Kugler, 107 Mo. 58. Chief-Justice Gibson says, in Watson v. Mercer, 6 Serg. & R. 49, with reference to transfers obtained from the wife for the purpose of vesting the estate in the husband : “ What honest mind would feel regret that, in the hurry of accomplishment, some circumstance, merely formal, was omitted by which the wife and her family were rescued from his rapacity?”

This deed was executed at a critical period of Mrs. Otterson’s life; she was in extremely delicate health; it was doubtful if she would survive the peril of her approaching confinement. She was a refined lady, unacquainted with business, relying for its care first on her agents and then on her husband, who, after their marriage, became her agent and was entrusted by her with the entire management of her estate and exclusively of the property in question; in short, she was most dependent on him and devoted to his interests; her affection for and attention to him were marked, as was her anxiety to please him. He was a prominent lawyer; so was the selected trustee, who was the husband’s intimate friend, and was also the officer 'who took the acknowledgment. So far as the evidence shows, this inexperienced lady, without any competent independent adviser, was surrounded by these gentlemen, of whose legal ability she must have been aware, and in one-of whom she reposed the most implicit confidence. It is a case in which the court should be alert to require the observance of all the technical- rules applicable.

In all transactions between persons occupying relations, whether legal, natural or conventional in their origin, in which confidence is naturally inspired, is presumed, or in fact reasonably exists, the burden of proof is thrown upon the person in whom the confidence is reposed and who has acquired an advantage, to show affirmatively, riot only that no deception was practiced therein, no undue influence used, and that all was fair, open and voluntary, but that it was well understood. Mott v. Mott, 4 Dick. Ch. Rep. 192; Gibson v. Jeves, supra; Hoghton v. Hoghton, 15 Beav. 278; Simeon v. Wilson, 3 Edw. Ch. 36; Coutts v. Acworth, L. R. 8 Eq. 558; Boyd v. De La Montagnie, supra; Darlington’s Appeal, supra; Hugenin v. Baseley, 2 White & T. Lead. Cas. (T. B. S.) 597 and notes.

It is essential to the maintenance of a deed of gift that the donor comprehends the full force and effect of his acts, as Sir George Jessel .puts it, “thoroughly understands what he is about” (Dutton v. Thompson, 23 Ch. Div. 278, 281); or, in the words of Lord Eldon, in Hugenin v. Baseley, 14 Ves. 273, “with that knowledge of all their effect, nature and consequences, which the defendants and the attorney were bound by their duty to communicate to her, before .she was suffered to exeeuté them.” See, also, Mulock v. Mulock, 4 Stew. Eq. 594, 602. It is to establish this thorough understanding that the burden of proof is thrown on the donee in cases of gifts between persons standing in fiduciary relations.

The state, in its careful protection of the rights of a married woman in the transfer of her real estate, requires by statute that a public officer shall make known to her the contents of the instrument, and take her acknowledgment, when she is separate and apart from her husband, that her execution thereof is her voluntary act and deed, freely done and without any fear, threats or compulsion of her husband. This law is to secure to her, through an officer, knowledge of the contents of the paper and. an opportunity, when not in the actual presence of her husband, of exercising her own will and purpose. The certificate of the officer, in compliance with the statute, completes the formality and makes it a legal conveyance. It is evidence that the contents of the deed have been made known to the wife, and that she has acknowledged that its execution is free and voluntary. Yet, while it may be true that the deed has been read to her, she may be as far from thoroughly understanding the effect of the act as she may be unconscious of the dominant influence of her husband’s will inducing her action.

While, in the case of an ordinary transfer of title, it may be safely assumed that, any man or woman of intelligence would entirely comprehend the effect of a deed whose contents have been made known to them, that presumption cannot, I think, be indulged in with reference to a deed of trust -with its complicated provisions; something more than having the contents made known would be required in order that a man or woman of ordinary information should fully understand the force and effect of such a deed drawn in the technical verbiage of the professional conveyancer. Hoghton v. Hoghton, supra.

It is to secure this thorough understanding that courts of equity require, in cases of this kind, except those involving mere trifling gifts, that the donor shall have independent advice. Sir G. J. Turner, L. J., in Rhodes v. Bate, L. R. 1 Ch. App. 252 (at p. 257), says: “I take it to be a well-established principle of this court that persons standing in a confidential relation towards others cannot entitle themselves to hold benefits which those others may have conferred upon them, unless they can show, to the satisfaction of the court, that the person by whom the benefits have been conferred had competent and independent advice in conferring them. This, in my opinion,, is a settled general principle of the court, and I do not think that either the age or capacity of the person conferring the benefit, or the nature of the benefit conferred, affects this principle.” Kekewich, J., in Allcard v. Skinner, 86 Ch. Div. 145 (at p. 158), says: “ Where the paramount influence presumably exists, it [the law] casts on the possessor of such influence the burthen of proving that the gift was .free, and it holds an essential part of that proof to be that the donor had ‘competent independent advice;’” and Lindley, L. J., (at p. 181): “ In this class of cases it has been considered necessary to show that the donor had independent advice, and was removed from the influence of the donee when the gift to him was made.” See, also, Prideaux v. Lonsdale, 1 De G., J. & S. 433; Savery v. King, 5 H. L. Cas. 627; In re Garnett; 31 Ch. Div. 1; Dolliver v. Dolliver, 94 Cal. 642; Leech v. Fare, cited in 13 Am. L. Reg. (N. S.) 350.

Not only does it not appear that Mrs. Otterson had independent advice to explain the effect of the deed, but I think the present condition of affairs, considered in the light of the provisions of the deed of trust, demonstrates that Mrs. Otterson did not thoroughly understand it. It is undoubtedly true that, in construing an instrument, it is to be assumed that the parties intended its terms in the sense established by the courts in their interpretation, but in ascertaining whether the parties really understood the terms of the instrument, we have a right to judge from its plain provisions whether one or more of its possible effects was intended. No question is raised as to the validity, under the trusts, of the conveyance from James E. Growen, the trustee, to James Otterson, Jr., by which the fee was vested in him and diverted from the heirs-at-law of Mrs. Otterson. I think a cursory reading of the trusts would never have given the unprofessional mind the idea that any such,power was given. The scheme such examination would disclose to such person is that during the lives of James and Rebecca they may jointly do what they wish with the property, even to the revocation of the trusts; that Rebecca might at any time during her life appoint to whom all or any part of the premises should go after the death of herself and husband; that in the event of her failure to so appoint, James, he surviving her, at any time during his life might by will dispose of the premises to whomsoever he might choose; that if neither James nor Eebecca did dispose thereof by will, then the trustee should hold for the right heirs of Eebecca, to whom the premises should be conveyed. It is ■clear from these provisions that she intended to secure to herself •the right to appoint by will the persons to whom she wished the property ultimately to go, and if she failed so to do, that her husband by will might do the same, and in the event of their both dying intestate or without making such appointment, the premises should go to her heirs-at-law. She died without a will, he made an unfinished attempt to leave one. The event contemplated, by which the heirs were to have acquired the estate, happened, but the insertion of the words “ or the survivor of them,” in the clause of revocation, nullified this clearly-expressed intention and tends to divert the property to the creditors of the husband.

The effect of the absence of a power of revocation in a voluntary conveyance has been the subject of much fluctuation of opinion.

Chancellor McGrill, in Van Houghten v. Van Winkle, 1 Dick. Ch. Rep. 380 (at p. 385), thus states the present condition of the law: “As to such an instrument, the authorities appear to hold that where the intent to make it irrevocable does not appear, and no motive for an irrevocable settlement is shown, the absence of the power of revocation is prima fade evidence of mistake.” Garnsey v. Mundy, 9 C. E. Gr. 243; S. C., 13 Am. L. Reg. (N. S.) 345, with note.

The deed in question did contain a certain power of revocation, but it could only be exercised by Mrs. Otterson in the lifetime of her husband by his joint co-operation. She was the donor and he was the beneficiary in this deed. Is the reservation of a power to be jointly exercised by the donor and donee such a power of revocation as is contemplated by the authorities ? I do not think it is.

Lord Eldon, in Hugenin v. Baseley, 14 Ves. 296, referring to a decision of Lord Hardwicke, says: “ There was in that deed a power of revocation, but it was a power to revoke in presence of three persons who perhaps never could be got together, which was therefore considered as if there had been no power of revocation, and the want of such power was considered strong evidence that the parties did not understand the transaction, whence arose a strong inference of an undue purpose.”

In this case the reservation of the power of revocation to the donor, to be exercised only jointly with the donee, cannot certainly be considered as reserving to her the right to revoke the deed. The absence of such power under the above statement of the law, then, is prima fade evidence of mistake, unless the intent appears to make it irrevocable. So far from this being the' case, the insertion of the clause demonstrates that it was the intention to make it revocable, and no motive for an irrevocable settlement is shown.

The evidence shows that this deed by which Mr. Otterson, the agent, secured to himself the opportunity to control and dispose of the property, subject to the single contingency of Mrs. Otter-son’s power of appointment by will, was entirely voluntary on her part, and that it was made at a time when she was completely under his influence. So far as appears, it was executed by her without any information as to its contents and effect other than what the perfunctory duty of the acknowledging officer required, and without the benefit of independent advice. It would seem from her intention, as gathered from the provisions of the deed, that she did not fully understand its force and effect, and it is to be presumed that it was executed under a mistake, as it is without power of revocation reserved so far as she individually was concerned, although it, on its face, develops the intention that it should be revocable. All these conclusions unite in the result that this deed cannot stand in a court of equity.

It was, however1, made in 1858, Mrs. Otterson died in 1863, and the bill was not filed until 1891, twenty-eight years after the execution of the deed, and the defendants set up the statute of limitations and also claim that the complainant, by delay, has lost any right she might otherwise have to attack the conveyances; and further, that by her inaction, with the knowledge that James Otterson, Jr., was exercising acts of ownership by the sale and conveyance of portions of the estate, and its improvement by the purchasers, she has so far given her acquiescence to the original transaction that she cannot now dissent therefrom in a court of equity.

The sections of the statute of limitations which the defendants rely on are 16 and 17. Rev. p. 597. The first limits entry on lands to twenty years next after the right of entry accrued; the other limits the bringing of any real, possessory, ancestral or other action for lands to the same period, after the right or title thereto, or the cause of such action accrues. The latter relates to actions for the recovery of lands and necessarily involves the possession thereof; the time limited therein cannot commence to run until the right of entry has accrued. Time, under .either section, does not run against a remainderman until the death of the tenant for. life. This was held in Pinckney v. Burrage, 2 Vr. 21, with reference to the thirty years’ section of the statute. Rev. p. 598 pl. 24. James Otterson, Jr., after the death of his wife, was entitled to the possession of these premises for life as tenant by the curtesy, irrespective of the conveyances. His possession was as referable to the one right as the other. While he lived, therefore, Mrs. Hall had neither the right of entry nor of possession. Until his death in 1890 she could not maintain a suit at law for the recovery of the land, and the statute has not, therefore, run against her at law. Duke of Leeds v. Amherst, 2 Phil. 117; Kirwin v. Kennedy, 3 Ir. Eq. 472; Thompson v. Simpson, 1 Dru. & W. 459. The principle is also recognized by Lord-Justice Turner in Life Association v. Siddal, 3 De G., F. & J. 58, 72, saying: “A cestui que trust whose interest is reversionary is not bound to assert his title until it comes into possession.”

The present suit is one purely of equitable cognizance. It is founded on that branch of equity jurisdiction which relieves against mistake. As to its subject-matter, she would be remediless at law. The case does not fall within the principle that equity applies the bar of the statute to cases where there is both a legal and equitable remedy for the same cause of action. Kane v. Bloodgood, 7 Johns. Ch. 90, 118; Smith, Administra tor, v. Wood, 15 Stew. Eq. 569; Kirkpatrick v. McElroy, 14 Stew. Eq. 555; 13 Am. & Eng. Encycl. L. tit. “Limitation of Actions” p. 675 and notes.

This defence must rest, therefore, solely on the application of those rules relating to acquiescence and laches, which the court has always recognized, altogether outside and independent of the statute of limitations. They are the fruit of the maxi in that “ equity aids the vigilant, not those who slumber on their rights.” The chancellor has forcibly stated the rule, its reason and the consequences attendant on its disregard in Van Houten v. Van Winkle, supra.

The defences of laches and acquiescence are cognate but not correlative; they both spring from the cardinal rule that “ he-who seeks equity must do equity.” Acquiescence, however, properly speaking, relates to inaction during the performance of an act. Laches relates to delay after the act is done.

Lord Cottenham, in Duke of Leeds v. Amherst, supra, says of the use of the term acquiescence: “ If a party, having a' right, stands by and sees another dealing with property in a manner inconsistent with that right, and makes no objection while the act is in progress, he cannot afterwards complain. That is the proper sense of the word acquiescence.” A.nd thus it is that in such a case an equitable estoppel is raised. Acquiescence here might properly be applied in favor of purchasers, to the inaction of the complainant while James Otterson, Jr., was selling portions of the property and those purchasers were spending money in its improvement.

“But,” says Lord-Justice Thesiger, in De Buesche v. Alt, 8 Ch. D. 286, 314, “ when once the act is completed, without any knowledge or assent upon the part of the person -whose right is infringed, the matter is to be determined on very different legal considerations. A right of action has then vested in him, which, at all events, as a general rule, cannot be divested without accord and satisfaction or release under seal. Mere submission to the injuries for any time short of the period limited by statute for the enforcement of the right of action cannot take away such-right, although, under the name of laches, it may afford a ground for refusing relief under some peculiar circumstances.”

“ISTow, the doctrine of laches in courts of equity,” says Sir Barnes Peacock, in Lindsay Petroleum Co. v. Hurd, L. R. 5 P. C. 221 (at p. 293), “ is not an arbitrary or technical doctrine. -’When it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a. waiver of it, or when, by his conduct and neglect, he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were after-wards to be asserted : in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay, of course, not amounting to a bar by any statute of limitation, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance, of justice or injustice, in taking the one course or the other, so far as relates to the remedy.”

In the adjustment of these scales of justice, it is a controlling consideration whether the delay has been without valid excuse;— not an excuse in law, but one which would have led a person reasonably to act as the party charged with laches has. A person cannot be deprived of his remedy in equity on the ground of laches, unless it appears that he had knowledge of his rights. As one cannot acquiesce in the performance of an act of which he is ignorant, so one cannot be said to neglect the prosecution of a remedy when he has no knowledge that his rights have been invaded; excepting always that his want of knowledge is not the result of his own culpable negligence.

It is not a little difficult to determine what knowledge is necessary to place a party in the position of negligently delaying his action.

The chancellor, in Van Houghten v. Van Winkle, supra, says: “After he has been informed of facts and circumstances which apprise him of the wrong.” The court, in O’Neill v. Hamil, Beat. 618: “Of her being fully apprised, of her rights.” In Lindsay v. Hurd, supra, it is described as “sufficient knowledge of the fact constituting the title to relief.” That it must be something more than knowledge of the mere facts which have transpired, or papers which may have been executed, is shown by In re Garnett, 31 Ch. D. 1, which was an action brought by two ladies who had themselves executed releases to their aunt. This was done in 1859; the aunt died in 1879; the action was not commenced until 1883 to set aside the releases. The act attacked was the act of themselves, and of course they were not ignorant of it. Lord-Justice Cotton says (at p. 316): “But here on the evidence, these ladies never knew until after the death of their aunt that they had any right which they were giving up, any rights beyond those which were stated on the face of that deed, in respect of which they had received those sums.”

In Savary v. King, 5 H. L. Cas. 666, the father had a life estate in certain lands, with remainder to his sons in tail male. He was indebted to S., his solicitor, more than ¿£9,000, which was secured by policies of insurance on his life. In 1835 it was arranged- between the father, the solicitor and the eldest son, who had only just come of age, and who was living with his father, that a disentailing deed should be executed, and that the father and son should then execute a mortgage for ¿£10,000, with a power of sale — the difference in the amount of the former encumbrances and mortgage being made up by further advances, there being also a reduction in the rate of interest, and the policies of insurance being assigned to the elder son for his use. The son had no other advice than from his father’s solicitor, who was also mortgagee. The father afterwards borrowed more money from the solicitor, repayment of which was secured by charges on the estate executed by both father and son. With part of that money other property was purchased for the son. The original property was afterwards put up for sale to discharge all the encumbrances, and was bought in and ultimately purchased by the solicitor, who was the mortgagee. The bill to set aside these transactions was not filed until 1847, fourteen years after the disentailing deed was made. It will be noted that in this case the son, who was the plaintiff, participated in the execution of the papers which he sought to set aside, and must therefore have had knowledge of the facts.

Lord-Chancellor Cranworth (at p. 666) says, on the question as to the plaintiff being barred by lapse of time: His bill was ■filed in March, 1847; that was about twelve years after the date of the mortgage and eight or nine years after the sale. I cannot think that this delay makes any difference in the case. There is no reason whatever to suppose that Eichard [the son] was guilty ■of any unreasonable delay, or indeed of any delay at all, after he had become aware of his right to question the validity of the -mortgage; and in those circumstances, even if the delay had been much greater than it was, there would have been nothing to impugn his title to relief. Savary, the solicitor, must be considered ■substantially to have represented to Eichard that the mortgage was valid, and so consequently that the sale was binding on him; he cannot therefore complain that Eichard acted on his representations till, after the lapse of several years, he discovered it •to be erroneous.”

We have here stated as an excuse for delay that the complain■ant has been misled by the defendant. See, also, Buckingham v. Ludlum, 10 Stew. Eq. 137, 148.

Mrs. Hall says that she first heard that her sister, Mrs. Otter-■son, had executed this deed of conveyance, after her death. That Mr. Otterson then told her that her sister had given him the farm, and that he immediately went on and said, whoever shall -outlive me will see that I have never done you or your children any injustice.” She was at the time a member of the Otterson family, making her home with them when her sister died, and -continuing to live there for some time thereafter. The same •diligence is not required between members of the same family as between strangers. Laver v. Fielder, 9 Jur. (N. S.) 190.

After the death of Mrs. Hall’s husband, Otterson became her legal adviser, attended to her business and continued, not only on ■ terms of friendship but of confidence with her, during his life. .She had every reason to and did put entire trust and reliance in him and his representations, and there is no reason to think from the facts as they appear, that her confidence was misplaced. The unwitnessed will, dated May 20th, 1887, twenty-four years after his wife’s death, demonstrated, I think, that he really intended to carry out Mrs. Ottersou’s purpose, that this property should go to the children of the complainant.

But it is urged that she had constructive, if not actual, notice from the record of the transfer of the Ottersons to Gowen and from Gowen to Mr. Otterson. The deed of trust, however, was-not put upon record until January, 1864, six years after its date,, and nearly one year after Mrs. Otterson’s death, and cotemporaneous with the conveyance from Gowen, trustee, to Otterson. It does not appear definitely when the statement that his wife had given him the property was made by Otterson to Mrs. Hall, but the fair construction of the evidence is thát it was soon after her sister’s death. But I do not think she was negligent in-failing to make an examination of the record. Not only is it probable that, at the time it was put oil record, she was acting under the promises of Otterson, but if she had any knowledge-whatever of legal rights she knew that, independent of the deed, Otterson was entitled as tenant by the curtesy to continue in-possession of the property.

These • defendants stand in Otterson’s shoes. They cannot urge, as a bar to the complainant’s right of action, a delay in commencing suit, if it has been occasioned by the acts or representations of him under whom they claim. They come into-court and insist that it is inequitable that the complainant should, after a delay of many years, prosecute her claim ; but if he whom they represent has been the cause of this procrastination, this appeal to the equitable denial of this court does not lie-in their mouths. With his announcement to Mrs. Hall that her sister had given him the farm, he makes her the promise that puts her vigilance to sleep, and it is in consequence of his representations that she has remained inactive; and herein this case-differs from Wilkinson v. Sherman, 18 Stew. Eq. 413.

It is said that it would be inequitable to permit this suit to be-maintained because during the-complainant’s delay in bringing; it, witnesses have died, and testimony has been lost. But it appears to me that Mr. Otterson has been himself guilty of lacliesin this regard. He, being a lawyer of distinction, must be assumed to have known that the law cast upon him the burden of proof hereinbefore indicated. It was within his power, by suit, to have perpetuated the testimony necessary to establish the deed as a valid gift, as well as within hers either to have perpetuated the testimony necessary or to have brought suit to annul it; and he cannot invoke her delay in that regard as a bar to her action because during the interval he has been deprived of testimony lost to him by his own neglect.

I am of opinion that these conveyances, so far as they relate to property not conveyed by James Otterson, Jr., in his lifetime,, should be set aside.