author: Baokes, V. O.

text:
    Henry D. Phillips v. Jennie F. Phillips.
    [Decided May 9th, 1913.]
    . 3. The burden of establishing a resulting trust is on the party asserting it. He must prove not only that the consideration for the conveyance was paid by him or out of his funds, but also that the money was paid as the purchase price and not as a loan. When there is evidence from which it may be inferred that the money was advanced as a loan, the burden is on him to overcome this inference by clear and satisfactory proof.
    2. A resulting trust arises by operation of law from contemporaneous circumstances which give' the legal and equitable titles different directions. It must, therefore, arise at the instant the deed is taken and the legal title is vested in the grantee, and the situation of the transaction when the title passes is to be looked to, and not the situation preceding or following that timé.
    3. After a review of the evidence — Held, the complainant has not sustained the burden of proof. The weight of the evidence is clearly with the defendant that the complainant advanced the purchase price as a loan.

      Messrs. Vroom, Dickinson & Bcammell, for the complainant.

      Mr. Linton Satterthwait, for the defendant.
   Baokes, V. O.

The bill is filed for the purpose of establishing a resulting trust in favor of the complainant in a farm of eighty-eight acres, situate near Trenton, in the county of Mercer, the legal title of which is in the defendant.

On March 14th, 1910, the defendant entered into the following agreement with -John L. Weber:

"Tbenton, N. J., Mch. 14th, 1910.
“This is to certify that I have this fourteenth day of March, 1910, sold to Jennie P. Phillips my farm in Lawrence Township, Mercer County and State of New Jersey, containing eighty-eight acres, more or less, for three thousand dollars, subject to a mortgage of one thousand dollars, and the said Jennie P. Phillips is to pay fifteen hunderd dollars in cash and note at 3 months, for five hundred dollars, with the privilege of renewal with the payment of one hundred and twenty-five each time until the amount of five hundred dollars and interest on same is paid; this agreement to he in force by the payment of five dollars to bind this agreement until Mch. 16th, 1910, or until the deed is delivered to said Jennie P. Phillips, as per this agreement.”

By deed dated March 16th, Weber and wife conveyed the premises to the defendant. The complainant paid the consideration price substantially in compliance with the terms of the contract. He claims that the defendant acted as his agent in effecting the purchase, and that because of this, and inasmuch as he had paid the purchase price, a trust resulted in his favor. On the other hand, the defendant’s contention is that the purchase-money was loaned, to her by the complainant and with it she bought the farm for her own use. The testimony of the parties is in irreconcilable conflict, each firmly maintaining his and her own and denying the other’s alleged status. Counsel contend that the burden of proof is upon his opponent, and because of the other’s failure to sustain it, claim a favorable decree.

The burden of establishing a resulting trust is on the party asserting it. He must prove not only that the consideration for the conveyance was paid by him or out of his funds, but also that the money was paid as the purchase price and not as a loan. When there is evidence from which it may be inferred that the money was advanced as a loan, the burden is on him to overcome this inference by clear and satisfactory proof. Cutler v. Tuttle, 19 N. J. Eq. (4 C. E. Gr.) 549, 560; Perry Trusts (6th ed.) 133.

The parties to this-transaction are strangers m the sense in which that term is used in eases of this kind, and from the mere payment of the purchase price by the complainant, a trust would ordinarily be implied, were it not for circumstances which rebut such an implication.

A resulting trust arises by operation of law from contemporaneous circumstances which give the legal and equitable titles different directions. It must, therefore, arise at the instant the deed is taken and the legal title is vested in the grantee, and the situation of the transaction when the title passes is to be looked to, and not the situation preceding or following that time. Krauth v. Thiele, 45 N. J. Eq. (18 Stew.) 407.

By this, of course, is not meant to exclude an investigation of preceding and subsequent events, which may throw light upon the situation when the title passed.

For two years next preceding the purchase, the defendant occupied the land as a tenant, using it for pasture in connection with her homestead farm. More than a year before the conveyance she treated with the owner for its purchase and obtained a refusal at $3,000. At the beginning of the year 1910 she sought an extension of her tenancy for another year, but the owner declined a renewal, and by representing that he had another likely purchaser, persuaded the defendant to buy. The defendant had made repeated visits to the owner to obtain a better figure, but he was obdurate and she closed the bargain at his price without con suiting, and apparently against the protest of, the complainant. The defendant handed the contract to the complainant, and later on Weber, the owner, delivered the deed to him and he had it recorded. Both are in the complainant’s possession. The defendant executed the $500 note and renewals mentioned in the agreement, until finally the amount was paid. At the instance of the complainant, the defendant executed two mortgages on the farm; one to secure her note of $1,100, the other to secure her bond for $1,750. Upon both the complainant realized. He redeemed the former and also the mortgage of $1,000 on the property when it was conveyed.

The parties are first cousins, and until this dispute arose were on veiy friendly terms. The defendant was engaged in agriculture on an extensive scale on her homestead farm, and other farms adjoining, which she rented. At the complainant’s solicitation she negotiated with him the possession of her homestead farm at a yearly sum of $1,700. Thereafter, she says, upon learning that she had an option on the Weber farm, the complainant offered to ¡orovide her with the money to bujr it, and after she concluded the agreement with Weber, the complainant carried out his promise of financial assistance; she aiding him in raising part of the purchase price by executing the securities already referred to. The details of transferring the title she left to the complainant, because he was her friend and she says her attorney in the matter. Her testimony upon the crux of the case is corroborated by two witnesses. Mr. Weber,, after verifying the defendant’s long-standing option, says that he had difficulty in getting the complainant, from whom he understood the defendant was to obtain it, to pay the purchase-money, and that upon one occasion when dunning the complainant, the latter told him he had nothing to do with the property; that it was Jennie Phillips’s; that he helped her with the money and he helped her buy it, and lent her the monejq and that every time he asked the complainant for the money he was met with the answer that it was Miss Phillips’s monejq and he was merely getting it for her. To an inquiry of a Mr. Applegate, as to whether he had bought the place, the complainant replied that Jennie Phillips was the owner; that it belonged to her.

That the complainant was not altogether altruistic in advancing the money to the defendant appears from the fact that in the course of the year he would become the defendant’s debtor to the sum of $1,700 for the rental of the homestead farm.

The reason he assigned in camera for putting the legal title to the land in the name of the defendant, and the prelude to a diabolical plot against his wife, which has for its prototype iSTapoleon’s outrage upon Josephine, is not calculated to inspire confidence in the complainant’s testimony, nor are any of the attending circumstances which the complainant enlists in the support of his claim of a resulting trust, out of harmony with the theory of a loan.

That "Weber demanded of him the purchase price is not in discord. Weber had been informed by the defendant that the complainant was to supply the means. This the complainant affirmed, and only after considerable effort was Weber able to obtain the money.

The absence of an understanding as to when the defendant was to repay the money is alluded to as favorable to the complainant’s position, but this is dissipated by the facts that the complainant had then bound himself to the defendant to pay her $1,-700 for one year’s use of the homestead farm, and that there was a tacit arrangement between them that their mutual accounts were to be adjusted from time to time, of which the complainant gives evidence when speaking of the use of his five cows by the defendant, for which he says she was to account. The complainant’s insistence that he had not arranged with the defendant for the homestead farm until after, he had taken possession of part of the Weber land, is challenged by his statement that he occupied the Weber farm in the month of February and long before the purchase by the defendant from- Weber, and this occupancy is consonant with the defendant’s version that the use of the fields on the'Weber farm was given by her to the complainant in exchange for a like acreage of the homestead farm, which the defendant then had under cultivation.

In February of 1910, during the latter period of the defendant’s tenancy (the property was purchased March 14th), the complainant went into and now holds possession of the tillable portion of the Weber farm; the defendant retaining the meadowland. The complainant repaired the fences, cleaned up the hedgerow, fertilized the land, and did the usual other things of husbandry. These acts are pointed, to by counsel as controlling factors in establishing the complainant’s ownership, but to my mind they are not inconsistent with the claim, of the defence. As already observed, the complainant, according to the defendant’s story, had hired the homestead farm and was let into possession of part of the Weber farm while the defendant was still a tenant and before the agreement of purchase had been made, in lieu of equal acreage under cultivation, retained by the defendant, on the homestead farm. While the complainant denies that there had been any negotiations for the homestead farm, his operations upon the Weber farm are explainable only upon the theory that he had at that time in some way interested himself in the larger tract of land, for it is not reasonable that he would have undertaken the tilling of part of the small farm, which was without house or buildings, unless it was in connection with a larger enterprise.

The complainant’s insinuation that he wanted to buy the Weber- farm to “hitch” it on the adjoining Scudder farm, is refuted by his admission on cross-examination that at that time he had.no hold on the latter.

The complainant further insists that he expended $421 in making repairs and improvements on the Weber farm, and that this evinces his ownership. It might have tended in that direction, if his story were true, but it was quite apparent at the hearing that his account making up this sum was padded. The repairs were none other than those which are customarily made by tenant-farmers.

The continued custody by the complainant of the contract of sale and the deed for the farm, in view of the financial, professional and blood relationship between the parties, raises no inference against the legal title of the defendant.

The complainant has not sustained the burden of proof. The weight of the evidence is clearly with the defence that the complainant advanced the purchase price as a loan.

The bill will be dismissed, with costs.


source: Caselaw Access Project

author: Bacices, V. C.

license: Public Domain

text:
    Albert J. Getz v. Mary Getz.
    [Decided April 5th, 1913.]
    1. In a suit for divorce on the ground of desertion this court is without jurisdiction, where it appears that the petitioner did not, nor did the defendant, reside in this state at the time the cause' of action arose, the charge being predicated upon the desertion which occurred in New York.
    2. The actionable period in causes for divorce on the ground of desertion is the two years immediately preceding the commencement of * the action.
    ' 3. The jurisdictional period in causes for divorce on the ground of desertion, i. e., hona fide residence in this state “at the time the cause of action arose,” terminates at the expiration of the two years next succeeding the separation.
    On petition for divorce. On exceptions to master’s report.

      Mr. William Hauler, fox the exceptant.
   Bacices, V. C.

The parties to this suit were married in the State of New York, where they resided until September 6th, 1906, when the defendant deserted. The petitioner became a resident of this state in August, 1909, and has resided here ever since. His petition for divorce was filed June 11th, 1912, in which he charges that the defendant, for more than two years last past, had willfully, continuedly and obstinately deserted him. The charge is predicated upon the desertion which occurred in New York. The master reported adversely to the prayer for relief, on the ground (inter alia) that this court had not jurisdiction, because the petitioner did not, nor did the defendant, reside in this state at the time the cause of action arose. The exceptions to the report raise the point, and it is urged that desertion being a continuing injury, a right of action accrued to the petitioner by reason of the willful, continued and obstinate desertion of the defendant during the two years next preceding the filing of the petition, and Myles v. Myles, 77 N. J. Eq. (7 Buch.) 265, and Koch v. Koch, 79 N. J. Eq. (9 Buch.) 24, are submitted als sustaining this contention.

The Myles Case treats of the actionable period in causes where jurisdiction has been acquired in the manner indicated by the statute. This, the court of errors and appeals-declares, is the two years immediately preceding the commencement of the action, and, illustrating, says (at p. 266) :

“That the period of desertion must be that immediately preceding the petition is plain from the fact that if the petition left a hiatus between such period and the date of filing of the petition, such hiatus might readily represent a complete reconciliation and íeunition of the parties that would entirely destroy any right to a divorce arising out of a previous desertion.”

The Koch Case deals with the jurisdictional essential of bona fide residence in this state “at the time the cause of action arose,” and it is plainly pointed out by Vice-Chancellor Emery that this period for the purpose, of vesting jurisdiction in this court, terminates at the expiration of the two years next succeeding the separation. He says (at p. SO) :

“As to adultery, one of the two causes for divorce,, residence at the time the cause of action arose by reason of a specified act, is necessarily referable to a certain time and place. Desertion, the second cause of divorce, on the other hand, being a continuous act, may or may not become a completed ‘cause .or ground for divorce’ in New Jersey, within the second section, and the cause of action or ground for divorce under the New Jersey statute — desertion for two years does not arise until the termination of two years. But in both cases, it is the intention of the statute to refer the question of residence to a certain and fixed instant of time, and this time, in desertion cases, must, I think, be taken to be the time when the cause or ground for divorce for desertion, under the second section, is terminated and a cause of action arises upon this Cause or ground for divorce. This time is the end of the two years continuous desertion, whether in this state or elsewhere, and cannot be taken to mean the commencement of the desertion, or any other time before the termination.”

Guided by the rule thus laid down, the cause of action arose in this ease on September 6th, 1908, at a time when neither ’of the parties was a resident of this state, so far as the evidence, necessary for a divorce, shows.

Subdivisions “a” and “b” of sections 6 and 7 of the Divorce act confer j urisdiction :

“(b) When, at the time the cause of action arose, either party was a bona fide resident of this state, and has continued to be down to the time of the commencement of the action, except that no action for absolute divorce shall be commenced for any cause other than adultery, unless one of the parties has been for the two years next preceding the commencement of the action a bona fide resident of this state.
“(b) When, since the cause of action arose, either party has become, and for at least two years next preceding the commencement of the action has continued to be, a bona fide resident of this state; provided, the cause of action alleged was recognized in the jurisdiction in which such party resided at the time the cause of action arose, as a ground for the same relief asked for in the action in this state.”

To accede to the proposition of the exceptant would be to regard the provisions of subdivision “b” a piece of legislative supererogation, as in instances where the parties were non-residents at the time the marital offence was committed. Sawtell v. Sawtell, 17 Conn. 284.

I agree with the master that the petitioner was not a bona fide resident of this state at the time the cause of action arose, and therefore the exceptions must he overruled.


author: Walker, Ordinary.

text:
    Carlotta Heath, petitioner-respondent, v. Frederick R. Maddock, respondent-appellant.
    [Decided March 27th, 1913.]
    1. A petition by an infant m propria persona is irregular. A next friend must be joined, as an infant always sues by next friend.
    2. The provisions of the Orphans Court act requiring guardians to file inventories and accounts within a prescribed time is merely directory. Non-compliance, unattended by fraud, gross neglect or indifference to duty, is not a cause for removal from office.
    3. The misconduct of a guardian in the management of another trust estate upon an application to remove him from office, is relevant only to show general unfitness for fiduciary duty, and such misbehavior in that respect may not be invoked as a substantive cause.for removal.
    4. A guardian will not be removed where hostility exists between him and his ward, occasioned by the misbehavior of the ward.

      On appeal from the Essex county orphans court.

      Messrs. Lum, Tamblyn & Golyer, for the appellant.

      Messrs. Edward A. & William T. Day, for the respondent.
   Walker, Ordinary.

This is an appeal from an order of the orphans court of Essex county revoking letters of guardianship granted to tire appellant of the person and properly of the respondent, a minor. The proceedings were instituted by the respondent m propria persona. They ought to be amended by introducing a next friend, as an infant always sues by next friend. See 1 Dan. Oh. PI. S. Pr. 69.

■ The ward, who will be twenty-one in June next, inherited' $20,000 from her grandfather, which came into the possession of her guardian. She is also the residuary beneficiary of her grandmother’s estate to the extent of $100,000 and upwards, which is to he enjoyed-by her, when she arrives at the age of twenty-five years. After the death of her grandfather, the grandmother was appointed her guardian, who was succeeded by the appellant in December, 1906. Numerous circumstances are adverted to in the opinion of the court below, as manifesting that the guardian “has abused the trust and confidence reposed in him,” some of which are unsupported by evidence, and others are not of a character sufficient to warrant a invocation. I have carefully read the testimony to discover, if possible, cause to justify removal, but without success.

At the time the appellant was appointed guardian, he was one of the executors and trustees of the estate of the grandmother of his ward. That this situation was concealed from the then presiding judge of the orphans court, and that consequently the letters were procured by fraud, is the opinion of the court below, but, as I view it, this conclusion is unsupported by the evidence. Indeed, a presumption, if permissible, prevails in favor of a full disclosure.

By the will of the grandmother, the appellant and his co-nominee were not only appointed executors and trustees, but were also constituted guardians of the respondent and enjoined

“that the greatest care be given to the moral training and education of my said granddaughter Carlotta C. Heath, and that she be brought up and instructed in the doctrines of the Methodist 'Episcopal Church.”

It may fairly be assumed tliat in fixing the penalty of the guardianship bond, the court was fully'apprised of the amount and source of the guardianship estate, the instrument by which it was brought into being, and the provisions thereof. And even though the court was in ignorance of the pending trust under the will, there is no reason for adversely criticising the appellant’s acceptance of the guardianship. If, from the fiducial duality a conflict of interest and obligation arose, which seems remote, it is a necessary sequence of the course of conduct prescribed by tire testatrix who created the trust estate, and of which the court would have taken heed and likely followed, had it been brought to its attention.

The appellant is further arraigned for having, as executor and trustee of the grandmother’s estate, invested funds upon slender security by the purchase of mortgages aggregating $21,500, covering premises of which he was the owner, and for which he had then recently paid only $28,500. These mortgages were of the grandfather’s investments and held by his widow and executrix as part of his estate. The purchase of the mortgages by the appellant and his co-executor was authorized by. an order of the orphans court, presumably after full investigation. In the petition praying leave to make the investment, it was stated that the appellant was the owner. There is no testimony that the court was not informed of the consideration price paid for the land. In support of the petition two real estate dealers of good standing testified that in their opinion the premises were of the market val ue of $45,000 and upwards. At the hearing in this controversy a witness testified that the property was worth $50,000, which was not controverted. It was also made to appear that the assessment value for taxing purposes was $36,500. In view of these estimates the purchase price is of little or no moment. Hone of the- circumstances attending the purchase are given, and no effort was made to challenge the appraisement, nor is there any contention that the estate suffered, nor proof offered that the fund at any time was in jeopardy.

The appellant as executor and trustee was charged with dereliction of duty in failing to file an inventory and to account for the estate, since his appointment in 1906. It is also alleged against him that as guardian he has not accounted since 1908. It does appear, however, that when the counsel for the minor made demand, shortly before these proceedings were commenced, the appellant promised an immediate compliance and promptly accounted in the orphans court in both of the estates. Uo attack is made upon the integrity of the accounts, nor is bad faith alleged as a motive und eriying the failure to account within the time prescribed by the statute. In explaining his omissions, the appellant says that he was prompted by a desire to protect the estate from litigation threatened by a sister of the minor, which came to his knowledge through a brother of the ward, shortly after the grandmother’s death. The grandmother’s estate was a large one, in which the ward fared.vastly better than her brother and sister. That his course was discreet and in the interest of the estate is obvious. That it did not accord strictly with the requirement of the statute is true, but it was not done in bad faith, and my attention has not been drawn to any authority, nor have I found one, in which a trustee, whether as guardian or in other capacity, was removed from office for the reason that he failed to account within the statutory period, -without any other attendant circumstances.

The provisions of the Orphans Court act requiring guardians to file inventories and accounts -within a prescribed time is merely directory. A non-compliance, unattended by fraud, gross neglect or indifference to duty is not a cause for removal from office. Pfefferle v. Herr, 75 N. J. Eq. (5 Buch.) 219; affirmed, 77 N. J. Eq. (7 Buch.) 271. The conduct of the appellant is free from any such imputation. Upon two occasions, when he cautioned her against extravagance, his ward asked him how much she was worth. This was evidently by way of answering his comments, and not in an effort to secure the information the querjr implied. A few months before tire present application, the appellant canvassed with Carlotta his record of securities, and of his administration, but, because of her inexperience, she says she was unable to comprehend him. When called upon by counsel to do so, he promptly filed Ms accounts, which, so far as the testimony shows, are in nowise assailed.

The appellant is charged with wasting the decedent’s estate. He had made his home with the grandmother of his ward for many years, and by her will the testátrix gave him the privilege of living in the homestead, with his ward, in the same manner, free of charge, until the latter attained her majority, provided he remained single. Two years before this action he married. His ward requested him to continue in, and to bring his wife into, the household. They lived together happily until about the time of the commencement of this litigation. The appellant contributed from $16 tó $20 per week, about what it would cost outside for board, as he says, and his wife took the place of housekeeper, during the last year. It is urged that the infant’s invitation is nugatory, and therefore its acceptance and enjoyment was a breach of the trust contained in the will. In a codicil to the will the testatrix gave the sole care and charge of the homestead, the hiring of servants, and the manner of living and of the education of her grandchild to the appellant, all of which was to be at the expense of the infant, and to last until she was twenty-four years of age. The discharge of this trust made it quite necessary that the appellant reside in, and be a part of, the household. Besides, this young girl, alone in the world, needed the protection which the appellant had extended to her for many years. Both parties realized this. The appellant consulted counsel as to his right, and the ward says that she had nothing else to do but to invite her guardian and his wife to live with her, because she was only seventeen years of age, and there was nobody else to direct her. The appellant acted with propriety. If, in the situation, he benefited at the expense of the estate, the remedy lies in an accounting, not in removal. Pfefferle v. Herr, supra.

These proceedings in a great measure deal with the manner in which the appellant administered the grandmother’s estate from which is derived the bulk of the guardianship fund. His conduct in that connection is relevant in this controversy only to show general unfitness for fiducial duty, but his misbehavior, if any, in that respect, may not here be invoked as a substantive cause for removal.

It is claimed that a feeling of hostility exists between the guardian and ward, of such intensity, dire to the former’s misbehavior, as to render his further continuance in' office inimical to a proper discharge of his trust. I cannot reconcile the evidence with this contention. The appellant, in early manhood, was adopted into the family of the ward’s grandparents. Tie was taken into partnership with her grandfather, and succeeded to his business at his death. Tie had her grandmother’s respect and confidence. Although of no relation, she in her will referred to him as her nephew. The love of the grandmother for her grandchild is expressed in her solicitude for her welfare, which, by her will, she, in an abundance of confidence, committed to the care of tire appellant, whom she fondly called Fritz; and in her exjuring moments she was consoled by a promise from him that he would never desert this grandchild until she was old enough to take care of herself. That he failed to fulfill this promise is not shown by the testimony.

.From the death of the grandmother, in 1906, until two weeks before this suit was begun, the guardian and his ward lived in peace and harmony. Figuratively speaking, from him she received a paternal watchfulness of her temporal affairs, and a maternal devotion as to her spiritual welfare. • The ward testifies that he was ever indulgent and generous towards her, and that she lived with him in hajojuness and comfort. This appears to have been interrupted by her imprudence and insolence. That her conduct was misguided and prompted by others is evident. When she instructed counsel to investigate her affairs, her guardian was forbearing, and, according to her testimony, told her that it was all right and that he did not mind. That his pride was wounded by the imputations and aspersions which attended her. action is quite natural. Tie offered to, and did, meet her counsel, and asked for time sufficient to solemnly account for his stewardship, and' tendered himself ready to resign in the event of a default being shown. He sought to ward off a reflection upon his honesty and a scandal to his name, hut this was denied him. The ward testified that during the week following the receipt of a peremptory demand from her counsel for an accounting he treated her coolly, just nodded to her wjien she came to the table. In an altercation which ensued she called him a liar, for which impertinence he reprimanded her, and his wife took her to task, which was followed by considerable asperity between the two women, but in which tire guardian took no part, except to command the respondent to refrain from further insolence. The misbehavior on this occasion was that of the ward and not of the guardian. The doctrine set up in Lister v. Weeks, 60 N. J. Eq. (15 Dick.) 215, is not in point. Peace was restored and harmony again reigned in the family circle. This is the testimony of the respondent, supported by that of the appellant. Upon this incident is based the charge of hostility, which it is claimed destroys that harmony which ought to exist between guardian and ward, the absence of which makes necessary a dissolution of the relationship. That the ward has lost confidence in the integrity of her guardian I do not believe. Her statement that she has formed a distrust for him because of his not filing his account, and because of his manner and actions towards her after she asked for an accounting, is disingenuous. At the time of the altercation just noted, she said to him that she did not feel that he was dishonest. Uothing occurred thereafter, so far as the testimony shows, save this legal strife, to cause her to change her view. The confidence in and respect for her guardian, born of a lifetime of intimate friendship, was not so readily destroyed. The guardian protests that he bears her no ill will. He is a business man of prominence whose probity stands unimpeached in the record, which bespeaks for him a fealty' to his trust to the end of his term. The ignominy of a removal ought not to be visited upon him.

The order revoking the letters is reversed, with costs, to be paid out of the estate.


author: Backes, Vice-Ordinary.

text:
    In the matter of the transfer tax upon the estate of Elizabeth S. Miller, a non-resident decedent.
    [Decided April 2d, 1913.]
    1. The jurisdiction of the Ordinary in matters arising under the Transfer Tax act, approved April 20th, 1909 (P. L. 1909 p. 325), is appellate only.
    2. The Ordinary is not vested with the power to compel the comptroller of the treasury to issue his consent to the transfer of corporate stock -of a non-resident decedent, even though the stock is not subject to a transfer tax.
    On petition to compel the comptroller of the treasury to issue his consent to the transfer of corporate stock of a non-resident decedent.

      Messrs. Vroom, Dickinson cfi Scammell, for the petitioners.

      Mr. Theodore Backes and Mr. Edmund Wilson, attorney-general, for the comptroller.
   Backes, Vice-Ordinary.

This matter is presented upon a petition by the executor of Elizabeth S. Miller, a non-resident decedent, praying:

“That an order may be made directing the comptroller of the treasury of the State of New Jersey to forthwith issue to your petitioner an unqualified consent to the transfer of the shares of stock of the New Jersey corporations above set out, of which the said Elizabeth S. Miller died seized, and for an order adjudging that there is no tax due the State of New Jersey from the estate of the said Anne F. Miller in respect to the shares of stock of said New Jersey corporations referred to, of which the said Elizabeth S. Miller died seized, or that if such tax is due upon the estate of the said Anne F. Miller, the payment thereof is not a condition precedent to the consent of the comptroller to the transfer of said corporate stocks of which the said Elizabeth S. Miller died seized.”

The petition sets forth that Elizabeth S. Miller, at the time of her death, was, the owner of capital stock of ten companies incorporated under the laws of the State of New Jersey. By her last will and testament, admitted to probate in the surrogate’s court of Ontario county, in the State of Yew York, she devised and bequeathed all of her residuary estate to her two children, Anne F. Miller and Gerrit S. Miller, in equal shares. The capital stock formed a part of the residue of the estate. The petitioner applied to the comptroller of the treasury to issue his consent to the transfers of these stocks upon the books of the corporations. The comptroller refused to consent to transfers to others than the residuary legatees, claiming that the transfers of the stocks are subject to a tax under the act entitled “An act to tax the transfer of property of resident and non-resident decedents, by devise, bequest, descent, distribution by statute, gift, deed, grant, bargain and sale, in certain cases,” approved April 20th, 1909 (P. L. 1809 p. 825), and basing his refusal upon the fact that Anne F. Miller, one of the residuary legatees, died ten months after her mother, and before distribution of the latter’s estate, leaving a last will and testament, admitted to probate in Ontario county, Yew York, where she lived, whereby she bequeathed and devised her estate to persons not within the exempt class of tire Transfer Tax act. The petitioner argues that the title to the stocks is in the personal representative of Elizabeth S. Miller; that there was no specific bequest thereof to the said Anne F. Miller, and that no property therein passed to her; that it is the petitioner’s duty, in the administration of the decedent’s estate, to convert the stocks into money and to distribute the money; that the only interest Anne F. Miller had in her mother’s estate was a chose in action against the petitioner for tire undivided one-half of the residuum; that there is no transfer of these stocks or any interest therein by the will of Anne-S. Miller to her legatees, and hence a transfer tax is not leviable. Upon this petition an order was made that the comptroller of the treasury show cause why the prayer of the petition should not be granted. Upon the argument, the comptroller challenged the jurisdiction of the Ordinary.

The twelfth section of the Transfer Tax act requires the payment of a tax to the treasury upon the transfer of any stock which may be liable to tax under the provisions of the act, and further that no corporation shall make such transfer until the comptroller shall consent thereto in writing. The eighteenth section furnishes the method for the levying of the tax, and provides for an appeal to the Ordinary. The twentieth section reads:

“The Ordinary of this state shall have jurisdiction to hear and determine all 'questions in relation to any tax levied under the provisions of this act,”

and by virtue of this, the petitioner contends that power is conferred upon the Ordinary to grant him the relief he asks. To this I cannot subscribe. The jurisdiction thus granted is purely appellate. The Ordinary may take cognizance only after the tax provided by the act has been levied in the manner prescribed by the statute. That stage has not been reached in this case. The effort of the petitioner is to have it declared that the provision of the twelfth section of the statute is not applicable to the situation he presents and to decree a public official to discharge a function of his office. The Ordinary has not the right to so adjudge, nor the power to issue the mandate. Under our system these are vested in another forum. They were not intended to be conferred upon this court. The legislative intent, as expressed in the act, is against an intrusion upon the common law jurisdiction of the supreme court in matters of this kind. In this view it would be inappropriate to express an opinion upon the merits of the petition.

The prayer of the petition is denied, with costs.


author: Walker, Chancellor.

text:
    Henry O. Rogers, appellant, v. Helen A. Rogers, respondent.
    [Submitted July 8th, 1913.
    Decided April 24th, 1913.]
    1. Under our statute desertion is justified only -when the deserting party has been so offended against as to authorize at his or her instance a decree of divorce or judicial separation, but the guilt of the offending party must appear by clear and satisfactory proof.
    2. When a defendant in a divorce case pleads a counter matrimonial offence against the petitioner in bar of the suit, the offence so pleaded is not made out unless supported by corroborating evidence the same as though it were made the basis of an application for divorce.
    3. While the support, of his wife and children by the petitioner was meagre and possibly not all that he could and should have provided out of such means as he had, nevertheless the mere fact of failure to provide sufficient support for a wife does not constitute desertion by the husband under our statute.

      4. When a wife deserts her husband it is his duty to make proper approaches to her and sincere efforts to induce her to return to him, unless it is apparent that such approaches and efforts would be entirely futile.
    5. Evidence examined and held to show a willful, continued and obstinate desertion. by a wife of her husband under such circumstances as excused him from making approaches to her and an effort to induce her to return to him, because it was apparent that any such inducement or effort would have been futile and unavailing.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevenson, whose opinion is reported ante p. 311.

    On final hearing on pleadings and proofs.

      Mr. Archibald G. Hart, for the appellant.

      Messrs. Eance & Miller, for the respondent.
   The opinion of the court was delivered by

Walker, Chancellor.

Mr. Rogers filed a petition for divorce in the court below alleging willful, continued and obstinate desertion by his wife for the statutory period of two years. She answered denying the desertion, and averred that she went to the home of her parents in New York City in the month of August, 1908, with their children, and that the petitioner refused to permit her to re-enter their home at Hasbrouck Heights, New Jersey, and barred, the house against her; that she had at all times been anxious and willing to return to the petitioner and so informed him, provided he would cease from cruel and inhuman treatment toward her and cease from treating her as a servant and permit her to be mistress of the household and rear her children as the wife of the petitioner; to all of which requests the petitioner refused to accede; that after August, 1908 (the time of the separation), the petitioner refused to provide her with money for the support of herself and children and that she commenced a suit in chancery for such support, which resulted in his agreeing to pay her the sum of $3 per week for the support of their two children, and that he has continued to pay such weekly sum.

■ The cause was referred to Vice-Chancellor Stevenson, who advised a decree dismissing the husband's petition. In the course of his oral opinion he remarked:

“When a man sues his wife for divorce for desertion and charges her with willful, continued and obstinate desertion, he must prove that the desertion had those three characteristics. The burden is upon the husband, the petitioner. He must show by a preponderance of the evidence that his wife was guilty of obstinate desertion and, in my judgment, in this case the husband entirely fails. As I have already indicated, the great weight of the evidence in this case tends to show that there was no such obstinacy on the part of the wife — that if proper approaches had been made to her — if an honest, sincere effort had been made by the husband for a reconciliation, it would have been successful.”

We are in accord with the proposition that a party to a suit for divorce who charges the other with willful, continued and obstinate desertion must prove that charge, and that the burden of proof is cast upon him or her who prefers it. This is axiomatic. It has been so often decided as not to need the citation of authorities to support it.

In this case the defendant left the petitioner and has remained away from him for more than the statutory period of two years. Was she justified? If not, was the husband obliged to make a proper effort to induce her to return? This, in turn, involves the question whether such inducement would have been futile, and was so understood by the husband.

First, the parties were living in a house owned by the petitioner at Hasbrouek Heights in this state, and on the morning of August 18th, 1908, the defendant went for a visit to her parents in New York City with their two children, the petitioner accom•panying them. Before starting and on the way to New York they quarreled about money matters. They had had repeated disputes about money, and the petitioner was shown to have been a miserly and penurious man. His income was small, to be sure, and that was a reason for economy, but not for the peuuriousness in which, he indulged and which amounted to considerable privation to his wife and children.

On cross-examination the defendant was asked what were her real reasons for deserting the petitioner, and she answered that it was because he refused to give her money that he should have given her to run the house with, and his general continued unkind treatment. At an interview with her husband, at her father’s house in New York, she agreed to return to him only upon condition that she should have $30 a month to run the house with, and that they were to occupy separate rooms. She asserted that from the time she made those conditions to the time of giving her testimony her mind on that subject had not changed. She only paid one visit to the Hashrouek Heights house after she went to her father’s in 1908, and that was not to live with her husband but to take her furniture and belongings away. On the occasion of the petitioner being at the defendant’s father’s house her father told the petitioner that if his wife returned to him they would have to occupy separate rooms, and the defendant in her testimony said that that was the first that was said about separate rooms.

The defendant testified that her husband would not agree to the conditions, and that her father then asked her to state her decision, and she asked the petitioner if he had changed his idea as to how she should run the house and he said “No.” She then asked him if he would continue to carry the money for the running of the house and he said “Yes,” and she asked if she was not to have any if she went hack, and if he was to continue to buy the things and pay the hills, and he said “Yes,” he thought he could do it more economically than she could, and she said she would not return under those conditions, and she added that if he changed and she went hack still they would occupy separate rooms.

It should he stated that the defendant’s refusal to occupy the same room with her husband was because she suspected him of having some sort of venereal disease, although she admits she did not accuse him of it while living with him. It was only brought to his attention by her father at the interview just adverted to, according to the husband’s testimony. The defendant’s father testified that he himself said nothing to Eogers about his alleged physical condition; that the subject was not brought up at the conversation in his (witness’) house, although his daughter had intimated to him such was the case. He did say that he exacted as a condition of his daughter’s going back to her husband that they should occupy separate rooms, and gave as a reason that he understood Mr. Eogers was entirely too passionate a man for his wife under the circumstances — whatever they were. The date of the interview with the father was September 8th, 1908, the husband having paid one visit to his wife at her parents between the date of her leaving, August 18th, 1908, and that visit was on August 31st, 1908. On the 10th of September, 1908, it was that Mrs. Eogers went to her former home and removed her things in the absence of her husband. The petitioner continued to occupy his house from the time of their separation until the filing of his petition in this cause. His wife never returned to him and he never made any overtures to her for a reconciliation or endeavored to persuade her to return to him.

It must be conceded that Mrs. Eogers left her husband and has remained away from- him. She does not deny it.- In her answer she seeks to justify it by alleging that her husband had been guilty of cruel and inhuman treatment toward her; that he treated her as a servant, and did not permit her to be mistress of the household and rear her children as his wife; that after the separation he refused to provide her with money for the support of herself and children.

Under our statute desertion is justified when the deserting party has been so offended against as to authorize at his or her instance a decree for divorce or judicial separation, but the guilt of the offending party must appear by clear and satisfactory proof. Drayton v. Drayton, 54 N. J. Eq. (9 Dick.) 298, 301; Suydam v. Suydam, 79 N. J. Eq. (9 Buch.) 144, 146.

Assuming that the charge of cruelty in the defendant’s answer is sufficiently pleaded and that the pleader intends to charge the extreme cruelty which is cause for divorce a mensa et thorn under our statute, still it is not proved, that is the facts testified in support of the allegation do not in and of themselves constitute extreme cruelty. But even if they did, being an affirmative defence, the burden of proving it would be upon the defendant, and, as it amounts to a matrimonial offence pleaded in bar of a suit for divorce, it would have to be supported by corroborating evidence, the same as though it were made the basis of an application for divorce. Letts v. Letts, 79 N. J. Eq. (9 Buch.) 630, 632. The same rule was applied in Garcin v. Garcin, 62 N. J. Eq. (17 Dick.) 189.

So far as the question of venereal disease is concerned, the wife only suspected it and did not accuse her husband of it, much less prove it. Therefore, no fact is presented which makes a case of extreme cruelty visited by the husband upon the wife through sexual intercourse while he was so afflicted, and the case does not fall within Cook v. Cook, 32 N. J. Eq. (5 Stew.) 475, 479, and Crane v. Crane, 62 N. J. Eq. (17 Dick.) 21, 26.

As to her father’s assertion of the reason for the imposition of the condition under which she might return, namely, that they were to occupy separate rooms because the petitioner was entirely too passionate for his wife, it is sufficient to say that the court is not given to be informed of any facts which might show extreme cruelty arising out of gross abuse of marital rights. The court of chancery in English v. English, 27 N. J. Eq. (12 C. E. Gr.) 71, granted a decree of divorce from bed and board forever on the ground of extreme cruelty, consisting mainly in gross abuse by the husband of his marital rights, rendering it unsafe for the wife to cohabit with him, or be under his command or control, which decree, however, was reversed in this court (Ibid. 579), but only because it was apprehended that further acts of the same abuse would not be attempted if the wife should return to him (at p. 585), and the divorce was refused and the bill dismissed, but without prejudice, so that the facts urged in the complaint before the court might be used if the ease should again be brought. But the case at bar does not come within this doctrine for want of proof of any gross abuse of marital rights such as would constitute extreme cruelty.

While the support of his wife and children by the petitioner was meagre and possibly not all that he could and should have provided out of such means as he had, nevertheless the mere fact. of failure to provide sufficient support for a wife does not constitute desertion by the husband under our statute. See Palmer v. Palmer, 22 N. J. Eq. (7 C. E. Gr.) 88; Skean v. Skean, 33 N. J. Eq. (6 Stew.) 148; Thomas v. Thomas, 74 Atl. Rep. 125, 127.

The learned vice-chancellor in the court below lays considerable stress upon the want of proper approaches by the husband to the wife and the absence of sincere effort on his part to induce a reconciliation and her return. We, however, think that this cause falls within.that class of adjudicated cases which excuse the husband from making an effort in the direction just mentioned, because it is apparent to us from the wife’s conduct — her actual desertion .of her husband, the imposition of unlawful and unreasonable conditions before she would return, her removing her furniture and belongings from his house in his absence, bringing á suit for alimony shortly after the separation — that any overtures or efforts made by her husband to induce her to return would have been entirely futile. See Hall v. Hall, 65 N. J. Eq. (20 Dick.) 709; Sterling v. Sterling, 71 N. J. Eq. (1 Buch.) 59; Purnell v. Purnell, 70 Atl. Rep. 187.

The above views lead to a reversal of the decree below and the granting of a final decree of divorce to the petitioner and appellant.

For affirmance — -Hone.

For reversal — The Chancellor, Chiee-Justice, Garrison, Swayze, Trenchard, Bergen, Yoorhees, Minturn, Kalisch, Bogert, Yredenburgh, Congdon, White — 13.


author: Gummere, Ghiee-Justice.

text:
    Commonwealth Roofing Company v. Michael Riccio.
    [Argued March 6th, 1913.
    Decided June 18th, 1913.]
    1. The court of chancery has no jurisdiction to entertain a suit for the enforcement of the claim of a laborer or materialman against the owner of a building under the third section of the Mechanics’ Lien law, that jurisdiction residing solely in the law courts.
    2. Where 'such a suit is commenced in the court of chancery, an order by that court is rightly made transferring the same to the proper law court under the Transfer of Causes act. P. L. 191% p. 417.

    On appeal from a decree of the court of chancery advised by Yice-Chancellor Garrison, whose opinion is reported mie p. SIS.

      Mr. Richard Board-man, for_the appellant.

      Mr. Horace L. Allen, for the respondent.
   The opinion of the court was delivered by

Gummere, Ghiee-Justice.

The complainant, having done work and furnished material in the construction of a building which was being erected under a contract in writing, and on file, made by the defendant with one Yallario, and payment for such work and materials not having been made to it by the contractor, served a stop-notice upon the defendant under the third section of the Mechanics’ Lien law. The defendant having refused to recognize the validity of the complainant’s claim by payment thereof, the present bill was filed for the purpose of foreclosing what is called a lien upon tire funds in the hands of the defendant, and due to the contractor at the time of the serving of the stop-notice. A motion having been made on behalf of the defendant to dismiss the bill for want of jurisdiction, upon the ground that the remedy given to the laborer and materialman by. the statutory provision referred to was only enforceable by an action at law, and not by bill in equity. The learned vice-chancellor who heard the application overruled it, holding that equity had concurrent jurisdiction in such matters. Having so held he thereupon, on his own motion, ordered that “the cause with the record thereof and all papers filed therein be transferred to the Hudson county circuit court for hearing and^determination pursuant to the provisions of 'the Transfer of Causes act (1912).’” The complainant now seeks a review of this order upon the single ground that as it claims the court of chancery should have retained jurisdiction of the cause and proceeded to final decree upon the merits.

The title of the act referred to by the vice-chancellor as the basis of his action is “An act to provide for the transfer of causes by and between the court of chancery and the supreme court or circuit courts or courts of common pleas.” P. L. 1912 p. 1/-17. The act itself provides that

“no civil cause or matter hereafter pending in any court mentioned in the above title which has not jurisdiction of. the subject-matter shall be dismissed for that cause only, but the cause or matter shall be transferred with the record thereof, and all papers filed in the cause, for hearing and determination to the proper court, which shall thereupon proceed therein as if the cause or matter had been originally commenced in that court. The record shall, when necessary, include a transcript of all entries and proceedings in the cause. Such transfer may be made at any stage of the proceedings, and upon, or without, application.”

A reading of this enactment discloses at once that if the court below was right in considering that it had jurisdiction of the subject-matter of this litigation, the order appealed from cannot be justified, for the statute permits the transfer of a cause from the court of chancery to a law court only when it “has not juris-, diction of the subject-matter.” The validity of the order must, therefore, depend upon the soundness of the conclusion of the vice-chancellor upon the question of jurisdiction.

Had, then, the court of chancery jurisdiction of the subject-matter of this litigation ? We think not. Under the Mechanics’ Lien law the right of the original contractor to recover the contract price of the building from the owner is a legal right, and is only enforceable in courts of law. It is expressly so provided in the act itself. The giving of the notice provided by the third section of the act “operates as an assignment pro tanto of the debt due from the owner to the contractor.” Carlisle v. Knapp, 51 N. J. Law (22 Vr.) 331. “The object of the provisions is to substitute a claim upon the funds belonging to the contractor for the lien of the laborers and materialmen upon the building and land in eases where that lien was taken away by the filing of the contract pursuant to section 2 of the act.” Gardner & Meeks Co. v. Herold, 76 N. J, Law (47 Vr.) 529, 530. “Upon the giving of the notice provided by it the workman or materialman, to the extent of his demand, takes the place of the contractor.” Reeves v. Elmendorf, 3 88 N. J. Law (9 Vr.) 130. That an action at law by the laborer or materialman against the owner is a proper method of enforcing the right given by this section has never been a matter of doubt since the decision by this court in Craig v. Smith, 37 N. J. Law (8 Vr.) 549, as elaborated by Chief-Justice Beasley in Reeves v. Elmendorf, supra. That it is the only method is clear, we think, from the extracts from the opinions cited; for, being the assignee pro tanto of the debt due from the owner to the contractor — taking the place of the contractor to the extent of his demand — the laborer or materialman is entitled to the same remedy for the collection of his-debt, for the enforcement of his demand, that the statute gives the contractor (except as otherwise provided in the statute), and to no other. If the matter of jurisdiction was one of doubt originally, the fact that, from the date of the enactment in 1853 down to the time of the filing of the present bill, every proceeding brought by a laborer or a materialman under the third section of the act for the collection from the owner of a debt due to him from the contractor has been by an action at law, and never by a bill in equity, would settle the construction to be given to the statute upon the question of the forum in which the laborer or material-man was required to prosecute his remedy; for whenever there is a debatable question as to the proper construction of a statutory provision, the contemporaneous and long continued exposition exhibited in the usage and practice under it requires the construction thus put upon it to be accepted by the courts as the true one. State v. Kelsey, 44 N. J. Law (15 Vr.) 1; Fritz v. Kuhl, 51 N. J. Law (22 Vr.) 191, 200; McNeal Pipe Co. v. Lippincott, 57 N. J. Law (28 Vr.) 540.

The finding of the court of chancery that it had jurisdiction to enforce the complainant’s claim against the defendant being erroneous, and that jurisdiction residing solely in the law courts, the order transferring the cause to the Hudson circuit court will be affirmed.

For affirmance — The Chief-Justice, Garrison, Swayze, Parker, Kalisci-i, Bogert, Yredenburgh, Congdon, White, 'Terhune, Heppenheimer — 11.

For reversal — Hone.


author: Swayze, J.

text:
    Adelia A. Leonard, appellant, v. Leonia Heights Land Company et al., respondents.
    [Argued March 11th, 1913.
    Decided June 18th, 1913.]
    Section 54 of the Conveyances act of 1898 (Comp. Stat. p. 1S5S) is not applicable to assignments of mortgage.
    On appeal from a decree of the court of chancery advised by Yice-Chancellor Stevenson, whose opinion is reported ante p. 43.

    Bill to foreclose. The mortgage was given by Edward T. Flood to Edward H. Eyan to secure $6,000. It is dated June 4th, 1904, was recorded June 17th, 1904, and conveyed six vacant lots worth only $3,000, part of -a tract of land which Ryan was developing for sale. Ryan assigned the mortgage to Adelia A: Leonard, the complainant, hy assignment dated September, 1904, but not recorded until December 3d, 1910. The complainant paid full value. On April 11th, 1905, Flood conveyed the premises to Ryan. On September 23d, 1905, Ryan and wife convej^ed to Margaret F. Cornell by deed recorded October 27th, 1905. Cornell conveyed to the Leonia Heights Land Companj'' by deed dated September 26th, 1905, recorded October 27th, 1905. Cornell was a “dummy,” as is said, of Ryan. The land company in exchange for the land issued to Ryan half its capital stock and gave him a mortgage for $4,375, covering the six lots and other lands. This mortgage came by assignments to the Hudson Finance Company, and has-been reduced by payments to $440. The Leonia Heights Land Company knew of the complainant’s mortgage when it took title, and made inquiries of Ryan who assured them that it was misplaced but he would find it; they assumed from the fact that the mortgage was so large, double the amount they were paying for the property, and was made by Flood, that it was a dummy mortgage.

      Mr. Louis A. Cowley (William W. Watson on the brief), for the appellant.

      Mr. Frederick P. Schench (J. Boyce Smith, Jr., on the brief), for the respondents.
   The opinion of the court was delivered by

Swayze, J.

The question presented is one of statutory construction. But for the recording acts the complainant’s position would be impregnable. She holds a duly recorded mortgage prior in time to any right of the land company or those claiming under it, and this priority* will be displaced if the'decree is affirmed. There was not only the constructive notice to the defendants by the record of the mortgage, but actual notice to the land! company. What was lacking was notice of the assignment from Eyan to the complainant. The proposition of the defendants, therefore, is that under the circumstances of this case the mortgage has become waste paper by reason of the failure to record the assignment, so that while in fact the complainant’s title is paramount, in law it is void. The logical process by which the learned vice-chancellor reached this result was twofold. In one part of the opinion he relies upon the theory that, by the failure to record, the assignment was made void by section 54 of the Conveyances act; that Eyan seemed on the face of the record to De the owner of the mortgage at the time Elood conveyed to him the equity of redemption, and-hence the land company had the right to assume that his estate as mortgagee merged in his ownership of the fee. In another part of the. opinion he relies upon the theory that, as the assignment was unrecorded, the land company might safely pay the mortgage to Eyan by virtue of section 34 of the Mortgage act. Comp. Stat. p 8419. It was necessary for the support of either theory to find that the land company was a bona fide purchaser for value without notice. We are not disposed to question this, although the giving of a purchase-money mortgage and the issue of stock in the company does not suffice to give the land company the protection accorded to' such a purchaser. Haughwout v. Murphy, 22 N. J. Eq. (7 C. E. Gr.) 531. The point is, however, not important since the subsequent mortgage given by the land company has been reduced by payments from $4,365 to $440, and to the extent of these payments, at least, the defendants may perhaps be bona fide purchasers for value. We need not pursue that subject, since we think the decree must be reversed on other grounds.

Section 54 of the Conveyances act (Rev. 1898; Comp. Stat. p. 1558) enacts that every instrument of the' nature or description set forth in the twenty-first section (among which are assignments of mortgage) shall until duly recorded or lodged for record, be void and of no effect against subsequent judgment creditors for valuable consideration, not having notice thereof, whose deed or mortgage shall have been first duly recorded. The vice-chancellor thought that this section applied to assign-meats of mortgage. The words are broad enough to include those instruments, but statutes are not to be construed with our eyes closed to the history that lies back of them. The act is a revision of pre-existing legislation, and the intent to change the law in a revision must be clear. State v. Lang, 75 N. J. Law (46 Vr.) 502, 511; Trenton v. Standard Fire Insurance Co., 77 N. J. Law (48 Vr.) 757, 760; Newark v. Tunis, 81 N. J. Law (52 Vr.) 45, 47; affirmed, 82 N. J. Law (53 Vr.) 461. Good illustrations of the practical application of the rule are to be found in In re Murphy, 23 N. J. Law (3 Zab.) 180; Campbell v. Hale, 25 N. J. Law (1 Dutch.) 324; Clement v. Kaighn, 15 N. J. Eq. (2 McCart.)47; Knight v. Freeholders of Ocean, 49 N. J. Law (20 Vr.) 485, 487, 488; O’Hara v. National Biscuit Co., 69 N. J. Law (40 Vr.) 198.

Section. 54 of the Conveyances act deals with the effect of failure to record, section 53 with the effect of recording, and the two must be dealt with as parts of the same statutory scheme. Prior to the revision of the Conveyances act in 1898 the law had protected persons making payments to or securing releases from the assignor of a mortgage whose assignment was not recorded. Comp. Slat. p. 3419 § 34. The persons protected by this section were the mortgagor and those claiming under him. The assignee, on the other hand, was protected by recording his assignment, for the record was made notice to all persons concerned that the mortgage had been assigned. Gomp. Slat, p. 8418 § 82. These provisions are necessary to the protection of persons who deal with the assignor as if he were still the holder of the mortgage, where the failure of the assignee to record his assignment has made it possible for them to be misled; and to the protection of the assignee where the mortgagor and those claiming under him continue to deal with the assignor in spite of the assignment. -The revisers could never have meant to deprive either class of the protection of sections 38 and 34 of the Mortgage act. They have done so, however,' if sections 53 and 54 of the Conveyances act cover the whole subject and operate as an implied repeal. Section 53 makes the record of instruments mentioned in section 81, notice to subsequent judgment creditors, purchasers and mortgagees. This differs from section 32 of the Mortgage act, which makes the record of the assignment notice to all persons concerned, and does not limit its effect to judgment creditors, purchasers and mortgagees. If section 53 of the Conveyances act has superseded section 32 of the Mortgage act, then an assignee of a mortgage who duly records Ms assignment is not protected by the record, and the mortgage may be paid to his assignor, unless actual notice is given, for the mortgagor is neither subsequent judgment creditor nor subsequent purchaser or mortgagee. The case has actually arisen. Mayer v. McLaughlin, 80 N. J. Eq. (10 Buch.) 342. In the same way if section 54 of the Conveyances act covers the whole subject and operates as an implied repeal of section 34 of the Mortgage act, the mortgagor is no longer protected in making payments and securing releases from the one who appears- on the record as holder of the mortgage; for section 54 makes the instruments void only as to subsequent judgment creditors, subsequent bona fide purchasers and mortgagees ; the' mortgagor’s title is necessarily antecedent and not subsequent to the assignment. The provisions of the Conveyances act are inconsistent with the provisions of the Mortgage act, and were not meant to supersede it. Since sections 32 and 34 of the Mortgage act are still in force, no useful purpose is served with reference to assignments of mortgage by section 54 of the Conveyances act unless it be the protection of a subsequent purchaser of the mortgage who might be misled into buying it of the assignor by reason of his seeming title arising out of the failure of the assignee to record the assignment. But even this purpose is not served. The word “purchaser” in section 54 means purchaser of the land, not purchaser of the mortgage. It is modeled after section 3 of an act respecting the record of transfer of real property. P. L. 1.888 ¶. 215; Gen. Stat. ¶. 882. The words “whose deed or mortgage shall have been first duly recorded” come from that act. This view is fortified by the collocation of the word “purchaser” with the word “mortgagees;” the latter word naturally applies to land; the corresponding word, if the holder of the mortgage had been meant, would have been pledgees. We ought not, of course, to attribute a double meaning to the word “purchaser” unless we are compelled so to do, and every purpose of section 54 will be served by holding that purchasers does not include purchasers of the mortgage but only purchasers of the land, as is meant in the act from which the language was taken.

We need not, however, rest on the absence of useful purpose alone. The subsequent language of section 54 shows that it does not apply to assignments of mortgage. By a proviso nothing in the act is to be construed to affect or impair the effect of any mortgage or the registry thereof which shall be registered as provided in section 17 of the Mortgage act, and the intent of the legislature to except registered mortgages is emphasized by the fact that in copying from the act of 1883 the clause above quoted, the words “or registered” were omitted. If section 54 applies to assignments of mortgage, it applies only to assignments of recorded mortgages. It is inconceivable that the legislature meant that an unrecorded assignment of a registered mortgage should be binding, but that an unrecorded assignment of a mortgage recorded in full should be void; that would be to handicap the more prudent and careful mortgagee. Moreover, if we read purchaser and mortgagee as meaning purchaser and mortgagee of the land, as we think we must, the language of section 54 is singularly inapt to protect such a purchaser or mortgagee in case of an unrecorded assignment. The statutory declaration is that the unrecorded instrument shall be void. The avoidance of the instrument when it is an assignment of mortgage does not help the purchaser of the land. What he is concerned with is the mortgage; the question who owns it is of no moment to him until he conies to make a payment thereon either of principal or interest; and when he comes to that point he is concerned with the question who really and in fact owns the mortgage, not with the question whether any particular instrument that evidences the ownership is void or not. If Mrs. Leonard’s instrument of assignment is void, her mortgage is still good; she has an equitable title thereto by the delivery from Ryan. Daly v. New York and Greenwood Lake Railway Co., 55 N. J. Eq. (10 Dick.) 595; affirmed on opinion, 57 N. J. Eq. (12 Dick.) 354.

Assignments of mortgage are not specifically mentioned by name in section 54. If included at all it must be because they are among the deeds or instruments mentioned specifically in section 21. Other deeds and instruments are mentioned in that section to which section 54 is as inapplicable as it is to assignments of mortgage. Among them are discharges and releases of mortgage and chattel mortgages. Discharges and releases could never be adverse to or have effect against subsequent judgment creditors, purchasers or mortgagees, but would always be to their advantage by getting out of their way antecedent liens; but if we- disregard, as we ought, the words “as against” and read them “as to” (their proper meaning here), we then have the statute making discharges and releases void as to subsequent judgment creditors, purchasers and mortgagees; that is to say, the prior liens which have been discharged or released will be restored by the failure to record the discharge or release, or in other words a discharge or release, unlike other deeds, must be recorded as well as delivered in order to become effective. This seems a sufficient reductio ad absurdwm, and demonstrates that the words of section 54 are not to be taken literally. They were mot taken literally in the supreme court when chattel mortgages were excluded from their operations. Brown v. Harris, 67 N. J. Law (38 Vr.) 207. If section 54 were construed broadly as it reads, it would apply to chattel mortgages and make them void as against subsequent judgment creditors without notice, and subsequent bona fide purchasers and mortgagees for valuable consideration, not having notice thereof whose deed or mortgage should have been first duly recorded. The Chattel Mortgage 'act of 1885 (Gen. Stat. p. 2112) as well as the present act of 1902 (Comp. Stat. p. 463) makes an unrecorded chattel mortgage void as against creditors (not merely subsequent judgment creditors) and subsequent purchasers and mortgagees in good faith (not merely those whose mortgage has been first duly recorded). The supreme court held that the Chattel .Mortgage act was not repealed by section 54 of the Conveyances act, and that an unrecorded chattel mortgage was void as to a landlord distraining for rent.

The learned vice-chancellor did not fail to observe that merely avoiding the instrument of assignment under which complainant claims, would not deprive her of her paramount title, and he held that the mortgage was avoided either by merging in the fee-simple or by payment. Both merger and payment were notional or constructive only. Neither existed in' fact. There was no merger in fact because the mortgage never belonged to' the owner of the fee. When Elood owned the fee, Ryan or the complainant owned the mortgage; when Ryan and those claiming under his deed to the land company owned the fee, che complainant still owned the mortgage.

There was never a time when the owner of the fee and the owner of the mortgage were the same person. Nor was there an apparent merger arising from the state of the record at the time the land company took title. The owner of the fee at that time was Cornell; the apparent owner of the mortgage according to the record was Ryan. It is true that prior to the deed to Cornell, Ryan appeared on the record as owner both of the mortgage and of the equity of redemption, but the land company was entitled to rely only on the apparent state of the title when Cornell convej^ed to them. If Cornell could otherwise have relied on the apparent state of the title when Ryan conveyed to her, she would have failed to secure that advantage by reason of the fact that she was not a bona fide purchaser for value without notice but only Ryan’s dummy. In fact the land company did not rely on the theory of a merger; what they relied on was Ryan’s promise to let them have the mortgage; they thought that the complainant’s mortgage for double the value of the vacant lots was a dummy mortgage created by Ryan to give a fictitious value to the land, and they relied on him to get rid of it. The case resembles Harrison v. New Jersey Railroad and Transportation Co., 19 N. J. Eq. (4 C. E. Gr.) 488. The very fact that they took their title from Cornell, and knew that the mortgage was in Ryan’s hands, shows that they did not rely on a merger. It malms no difference that Cornell was Ryan’s dummy. The title might have been put in her for the express purpose of preventing a merger.

Whether the theory of payment is consistent with the theory of merger, we do not stop to consider. There was no payment in fact. So far as the consideration was the issue of the land company stock to Ryan, payment was for him to make; it was an original issue of stock, not the transfer of stock already outstanding; Ryan must pay for it either in money or in property equal in value to the part of the stock; .the issue of the stock created an obligation on Ryan’s part which he discharged, if he discharged it at all, by causing Cornell to convey the land; it would be anomalous to hold that the creation of an obligation on his part was a payment to him. So far as the consideration was the purchase-money mortgage, neither party regarded that as a payment on account of the old mortgage. The whole position of the land company was inconsistent with the idea of payment; they thought the mortgage fictitious, and were not misled into the view that it was a valid lien to be paid. The doctrine of estoppel cannot be invoked. The land company did not assume to pay the apparent owner of the mortgage; they assumed to deal with Cornell and to treat Ryan as still holding the mortgage, not as having been paid the amount due thereon. For similar reasons we are unable to hold that the mortgage has been released. No one supposed that it was being released or that a fictitious mortgage needed to be released, but if the facts were different the alleged release- would have been from Ryan to Cornell, and Cornell is chargeable with notice, and there is no proof to overcome the presumption; section 34 of the Mortgage act applies only to releases “to a person not having actual notice of such assignment.”

For these reasons the decree must be reversed and the record remitted for further proceedings in accordance with this opinion.

For affirmance — Mintubh, Kalisch — 2.

For reversal — The Chief-Justice, Garrison, Swayze, Tbenchabd, Pabkeb, Voobhees, Bogebt, Vredenburgh, Congdon, White, Terhune, Hepbenheimer — 12.


author: Minturn, J.

text:
    James A. Filley et al., complainants, v. Edwin S. Fownes et al., defendants.
    [Argued March 12th, 1913.
    Decided June 18th, 1913.]
    In the absence of some recognized equitable ground for relief, a deed of trust, properly executed, and understood by the parties, in which the grantees have an interest, will be enforced.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning.

      Mr. John J. Crandall, for the complainants.

      Messrs. Vroom, Dickinson & Scammell, for the defendants.
   The opinion of the court was delivered by

Minturn, J.

The bill was filed to compel the defendants, the daughter and son-in-law of complainants, to account for a trust estate conveyed to them by complainants, and to compel a reconveyance of the properties so conveyed in trust.

Vice-Chancellor Learning dismissed the bill with certain qualifications and conditions, which he considered requisite to ensure to the complainants an intelligent understanding and protection of their rights, during the continuance of the trust. The trust was created by the complainants, an aged couple, and consisted of a conveyance of various properties in this state and in Pennsylvania, to their daughter, Caroline A. Fownes, for the purpose of protecting the complainants against their own improvidence, as well as for protecting certain interests of Mrs. Fownes therein.

The vice-chancellor, after hearing the testimony, found that the trust had been fairly administered, and except for the,purpose of assuring the complainants in the future administration of the estate, by substituting a trust company of this state, as trustee in the place of Mrs. Fownes, who was a resident of Pennsylvania, the deed of trust was upheld.

Our examination of the testimony and the record leads us to concur in the view of the learned vice-chancellor, that tlie trust created by these complainants was irrevocable; that the terms of the trust were declared in the written document creating it; that the trust thus created was sufficiently manifested to comply with the requirements of the statute of frauds; and that the complainants in creating it were fully cognizant of its purpose and effect; and were properly advised as to their legal rights under it.

"We find in the case no evidence of fraud or of undue influence, and under such circumstances, the equitable rule is clear that where a voluntary trust is created for the benefit wholly or partly of a person other than the grantor creating it, and the relation of trustee and cestui que trust is thus established, it'will be enforced. Perry on Trusts 130; Crue v. Caldwell, 52 N. J. Law (23 Vr.) 215.

The decree appealed from will be affirmed.

For affirmance — The Ci-iiee-Justice, Gaekison, Swat,ze, Trenchard, Parker, Yooriiees, Minturn, Kalisci-i, Bogert, Yredenburgi-i, Congdon, White, Terhune, PIeppenheimür —14.

For reversal — None.


author: Veedenbuegh, J.

text:
    William C. Supplee et al. v. Therese Cohen et al.
    [Submitted January 3d, 1913.
    Decided March 14th, 1913.]
    1. Where the owners of two lots of land lying contiguous to -each other agreed with their vendee that in consideration of his purchase of one of the lots, no building should be erected upon the other nearer than three feet from the party line between said lots, the court of chancery may entertain jurisdiction of a suit to enjoin the building of bay window and roof extensions by them which encroach nearer than three feet to such line.
    2. Where a person has acquired an incorporeal easement, without profit, in the land of another, to which land the former has no title, the latter may by open, peaceable, adverse, uninterrupted and undisturbed possession and user of such easement for a period of twenty years, acquire by prescription a superior right thereto against the former, and even evidence to dissent by him, short of actual interruption or obstruction to the enjoyment of the easement, will not suflice to defeat such superior prescriptive right.
    3. An appellant is not permitted to attack a decree in chancery upon grounds of appeal not contained in his petition of appeal.

      On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, whose opinion is reported in 80 N. J. ' Eq. (10 Buch.) 88.

      Mr. Charles C. Babcoch and Messrs. Bourgeois S-Coulomb, for the appellants.

      Mr. James II. Hayes, Jr., and Mr. Ulysses G. Styron, for the respondents.
   The opinion of the court was delivered by

Veedenbuegh, J.

For the purpose of dealing satisfactorily with certain features of this appeal it seems advisable to state the facts more at length than contained in the clear but condensed summary of them in the opinion supporting the decree below.

On March 22d, 1911, the appellants, in consideration of $20,-000, then agreed to be paid and secured to them by the respondent William C. Supplee, contracted with him in writing, under their hands and seals, to sell and convey by deed to him, his heirs and assigns, on or before April 22d, 1911, a certain specifically described lot of land and premises (having a dwelling-house thereon), situate at Atlantic City, blew Jersey, coupled with a certain incorporeal- easement, and exclusive right, upon and over a strip of adjoining land, retained by them, and next referred to. One of the inducements to the purchase of these premises was, that the vendors should not build upon said strip of their contiguous land. This restriction was expressed by their covenant in the agreement, in the following plain words,, viz.:

“The parties of the first part do hereby agree to and with the party of the second part that they shall so provide that no building shall be erected upon the lot adjoining said premises on the west nearer than three feet from the party line between said lots.” -

• The execution of this agreement was then duly acknowledged 4 by the appellants, and to preserve the evidence of the terms of the easement of restriction contracted to be granted by it, it was, on August 7th, 1911, caused to be duly recorded, as a deed, upon the records of the deeds of land in the clerk’s office in the county of Atlantic.

'On April 3d, 1911, the vendee, being prepared to consummate the agreement of pirrehase and close the transaction, made, what may be properly termed, a parol equitable assignment of his interest under the contract, to his wife (Helen Fanning Supplee), by directing the vendors to make their deed of conveyance of the . lot and premises so purchased by him, to his wife by substituting her name as grantee in the deed in place and stead of his own. To this directed assignment of interest the appellants assented, and having received a consideration with which they were fully Content, executed and delivered a deed of conveyance in fulfillment of the agreement (by the same particular description of the premises set forth therein) to the wife as their grantee. While in this deed, there was no repetition of the restrictive covenant in question, and while all the covenants in this deed were silent upon this subject, the proofs taken at the hearing disclose there was no release, op waiver either by parol or otherwise, on the part of the husband or wife, of the said covenant of restriction contained in the agreement. (

The respondents took immediate and actual possession of the conveyed premises, and proceeded with the active use and enjoyment of them.

In the following summer the appellants began the erection of a dwelling-house upon their adjoining lot. They erected the house so that its brick foundation wall and framed side were placéd exactly three feet away from the party line between said lots, but at its second story they caused to be built an addition and extension thereto, next to respondents’ line, so constructed as to project into and occupy seventeen inches of the ;said restricted three feet space, and also constructed a roof upon the house, the eaves of which projected into and occupied sixteen inches of the restricted space. To these extents, respectively, appellants’ building was erected nearer than three feet from the said party line between said lots.

Thereupon, on August 5th, 1911, the respondents, objecting, caused to be served upon appellants, and upon their builders and agents, a written notice, notifying them to desist from violating the covenant of restriction, specifying in the notice • that they desist from constructing or building such bay window and roof extensions within the three feet space adjoining the said party line; and that unless they desisted from thus violating the terms of said agreement an injunction would be applied for.

The present bill was filed praying, in effect, for the specific performance of the terms of the said covenant contract. The decree appealed from restrains the appellants from constructing and erecting on the premises adjoining that of the respondents the bay window, eaves or building nearer the west property line of respondents’ premises than three feet, and commands appellant to promptly remove so much of the bay window and eaves of their house on the premises adjoining the westerly line of respondents’ lot as are nearer their west property line than three feet.

The appellants, in their brief here, challenge the jurisdiction of the court, insisting that the respondents have an adequate remedy at law for any damages resulting to them from these building extensions. The bill is filed for the specific performance of the contract contained in the covenant made by the appellants, and no subject of equity jurisdiction is more thoroughly recognized, nor stands less in need of the citation of authority to support it. The facts peculiarly call for the exercise,of this jurisdiction and the interposition of the strong arm of the court of chancery.

The continued hostile occupation of this locus by the forbidden structure of the appellants would, if undisturbed by the respondents, grow into a right of prescription against them; and mere denials of the right, complaints, remonstrances or prohibitions of user unaccompanied by any act which in law would amount to a disturbance, and be actionable as such, would not prevent the acquisition by appellants of such prescriptive right. In the celebrated case of Lehigh Valley Railroad Co. v. Mc-Farlan, 43 N. J. law (14 Vr.) 606, this principle of law is most exhaustively treated by Chief-Justice Depue. In his opinion (at p. 638), in considering the nature of the evidence which shall-contradict, explain or rebut the presumption of right to an incorporeal hereditament arising from an uninterrupted possession of twenty y^ears, .he quoted, with approval, what was said by Lord-Justice Thesiger, in the case of Angus v. Dalton, 4 Q. B. D. 172, 186, that even evidence of dissent short of actual interruption or obstruction to the enjoyment would not be sufficient.

In the opinion of this court in Clement v. Bettle, 65 N. J. Law (36 Vr.) 675, it is said that “prescription is a title acquired by the use or possession had during the time and in the manner fixed by law, and in -the strictest sense applies only to incorporeal hereditaments, or such species of easements or liberties without profit which a person may enjoy in the soil of another without'obtaining an interest in the land itself.”

The brief also assails the decree upon a ground (not stated in the petition of appeal) that Helen Fanning Supplee, the owner oí the land conveyed, has no beneficial interest in the covenant in question.

This point is more technical than substantial, as has been already made manifest by the recitation of the uncontroverted facts evidencing the intent of the parties, and- leading to the acquisition of ownership of the premises by the wife; but if it possessed merit the appellants have not placed themselves in a position to avail themselves of it. The petition of. appeal avers that the decree appealed from was erroneous for certain specific grounds, eight in number, none of which present this point. It was settled, quite recently (1904) in this court, in the case of New Jersey Building and Investment Co. v. Lord, 66 N. J. Eq. (21 Dick.) 345, that an appellant cannot be permitted to attack a decree in chancery upon grounds of appeal which are nowhere stated in his petition of appeal.

The other subjects presented by the appellants, and not discussed in the present opinion, have, we think, been correctly resolved by the reasons given in the opinion of the learned vice-chancellor, and the decree should be affirmed.

For affirmance — The Ci-iief-Justioe, Garrison, Swayze, Trenci-iard, Parker, Bergen, Minturn, Kaliscit, Bogert, Yredenburgit, Congdon — 11.

For reversal — Hone.